Bloomberg News

Pfizer Unit Pleads Guilty to Pay $491 Million Over Drug

July 31, 2013

Pfizer Unit Pleads Guilty to Pay $491 Million Over Drug

A Pfizer Inc. unit will pay $491 million and plead guilty to a federal charge tied to its illegal marketing of the kidney transplant drug Rapamune for use in other organ transplants, U.S. prosecutors said. Photographer: Peter Foley/Bloomberg

A Pfizer Inc. (PFE:US) unit will pay $491 million and plead guilty to a federal charge tied to its illegal marketing of the kidney transplant drug Rapamune for use in other organ transplants, U.S. prosecutors said.

Pfizer’s Wyeth unit pleaded guilty to one count of misbranding the drug and agreed to pay a $157.5 million fine over its push to sell it for unapproved uses, the Justice Department said yesterday in a statement. Wyeth also will forfeit assets worth $76 million, government lawyers said.

“This was a systemic corporate effort to seek profit over safety,” Sanford Coats, the U.S. attorney in Oklahoma City, said in the statement. The investigation into Wyeth’s Rapamune marketing was handled by Coats’s office.

The drugmaker also will pay more than $257 million to resolve civil claims that it trained its sales force to sell Rapamune to doctors who performed heart, lung, liver and pancreas transplants. The U.S. Food and Drug Administration approved the drug in 1999 only for kidney transplant patients.

The settlement comes as New York-based Pfizer, the world’s biggest drugmaker, reported second-quarter profit that beat analysts’ estimates. Earnings were 56 cents a share, 1 cent more than the average of 15 analysts’ estimates compiled by Bloomberg. Net income rose more than fourfold from a year earlier to $14.1 billion, or $1.98 a share.

Wyeth Acquisition

Pfizer officials said yesterday the illegal Rapamune marketing occurred before the drugmaker’s $68 billion acquisition of Wyeth in 2009. Wyeth’s headquarters were in Madison, New Jersey, prior to the purchase.

“Pfizer was not a subject or target of this matter, and cooperated fully with the government from the time it learned of this investigation in October 2009,” Chris Loder, a Pfizer spokesman, said in an e-mailed statement.

Wyeth officials entered a guilty plea yesterday in federal court in Oklahoma City to a charge of misbranding a drug under the Food, Drug and Cosmetic Act, said Bob Troester, Coats’s spokesman. U.S. District Judge Vicki Miles-LaGrange sentenced the drugmaker to pay the fine and forfeit assets as laid out in the plea agreement, he said.

The investigation of Wyeth’s Rapamune marketing efforts was sparked in part by lawsuits filed by some of the company’s salespeople over the illegal sales, Reuben Guttman, a lawyer for the whistle-blowers, said.

Whistle-Blowers

Marlene Sanders and Scott Paris, Wyeth sales reps who handled Rapamune, alerted federal officials about the company’s efforts to train employees to sell it for unapproved uses and bonuses tied to such sales, Guttman said. Scott Campbell, a Wyeth sales manager, filed a separate federal False Claims Act case over the marketing campaign.

Campbell, who oversaw Rapamune marketing in Oklahoma, said in his suit that company officials pushed managers to train sales personnel to discuss off-label uses with doctors and paid speakers to tout Rapamune’s benefits at physician meetings.

Internal Wyeth files showed that 90 percent of Rapamune’s $200 million in annual sales in 2006 were generated by such off-label uses, Campbell said in court filings.

Prosecutors said Campbell and other whistle-blowers are entitled to recover a portion of Wyeth’s civil-claim settlement. Their share “has not been resolved,” the government’s lawyers said.

“This case is about marketing campaigns that harm thousands of patients seeking accurate information about whether a drug can help them,” Guttman said in an interview.

Wyeth’s Past

Pfizer has paid to settle other off-label marketing suits tied to Wyeth’s products. Last year, Pfizer officials agreed to pay $55 million to resolve a federal probe of Wyeth’s marketing of the heartburn drug Protonix.

The drugmaker also disclosed in securities filings last year that it paid almost $900 million to resolve about 60 percent of the more than 10,000 suits over claims that Wyeth’s menopause drugs caused breast cancer.

Lawyers for women who took the hormone-replacement drug Prempro and other menopause medicines made by Pfizer units such as Wyeth contend the company’s salespeople pushed the products for uses such as the prevention of cardiovascular disease and colorectal cancer.

The Rapamune whistle-blower case is U.S. ex. rel. Campbell v. Wyeth Inc., 07-00051, U.S. District Court, Western District of Oklahoma (Oklahoma City).

To contact the reporter on this story: Jef Feeley in Wilmington, Delaware, at jfeeley@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


Cash Is for Losers
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • PFE
    (Pfizer Inc)
    • $30.45 USD
    • 0.01
    • 0.03%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus