Justice Department Makes 2.3 Billion Dollar Example of Pfizer's Marketing Practices

Sep. 4.09 | About: Pfizer Inc. (PFE)

No sooner do I write another post about pharma marketing than Pfizer (NYSE:PFE) finds itself paying 3.2 billion dollars in fines for doing it improperly. 1.2 billion of that is a criminal penalty, and needless to say, they've set the current record.

The issues were off-label promotion of Bexxtra, Geodon, Zyvox, and Lyrica, with the largest penalties coming from the first two. Pfizer's had three other settlements of this kind in the last few years, and that record was definitely a factor this time, as the Justice Department looked for a figure that might get the company's attention. Also supposed to get the company's attention is a five-year "integrity agreement" with the Department of Health and Human Services, but it's worth noting that the company was already supposedly operating under an earlier such agreement when it was promoting Bexxtra. I think the money has a better chance of being noticed, myself.

I think that these kinds of penalties should be levied, in case anyone's wondering. Our current system almost makes sure that it will happen over and over, but that's because we're splitting the difference between two competing principles. The first one is that physicians should have the freedom to practice medicine as they best see fit, which means that they can write prescriptions for drug uses that have not (yet) been approved by the FDA. The second principle, though, is that drug companies should not be free to promote such uses. And I agree with both of those, but sticking to both of them simultaneously leaves open a constant temptation to break the law.

But there are a lot of industries that operate under such conditions, and in each case, they're supposed to control themselves (and get hammered on when they don't). Perhaps this latest fine will be enough of an example to keep the marketing people thinking ahead a bit. If that won't do it, then the way this whole case came up might - it's another example of whistleblower laws at work. John Kopchinski, a sales rep who left Pfizer in 2003, looks to get around $50 million of the settlement for bringing key information to the government's attention, and others are involved as well. I think that's a good thing, too, a useful counterbalance to the financial incentives on the other side.

But for now, we're left with another huge black mark on the industry's reputation. Thank you, Pfizer.