Pfizer really has put itself behind the eight ball in new drug development. Now Pfizer has added on coating of corruption as a settlement with the DOJ indicates appalling practices. When you read the indicting summary at WSJ’s Marketwatch – well “do no evil less than a weasel” and the Hypocritic Oath immediately come to mind:
Shares of Pfizer (PFE 16.21, -0.17, -1.03%) were down a fraction Wednesday morning, after the Justice Department announced what it said was the largest health-care-fraud settlement in the agency’s history. Pfizer has agreed to settle allegations that it illegally promoted four drugs: Bextra, an anti-inflammatory drug the company recalled from the market in 2005; Geodon, an anti-psychotic drug; Zyvox, an antibiotic; and Lyrica, an anti-epileptic drug, the DOJ said.
The company “caused false claims to be submitted to government health care programs for uses that were not medically accepted indications and therefore not covered by those programs,” the DOJ said in a statement.The agency said the settlement also “resolves allegations that Pfizer paid kickbacks to health care providers to induce them to prescribe these, as well as other, drugs.”Pharmacia & Upjohn agreed to plead guilty to “a felony violation of the Food, Drug and Cosmetic Act for misbranding Bextra with the intent to defraud or mislead,” the DOJ said. “Pfizer promoted the sale of Bextra for several uses and dosages that the FDA specifically declined to approve due to safety concerns,” the agency said.
Note that Pfizer and its subsidiary were not able to do the usual – pay the fine but make no admission of guilt. Now the markets seemed to take this all in stride perhaps because Pfizer elected to dump this charge into 2008 year results not the current 2009. And given the heavy battle on Healthcare Reform, one has to wonder about the timing of the announcement. But perhaps the biggest impact will be to the credibility of Pfizer in future drug developments as it a)seeks to bring new drugs through the FDA approval process and b)brings the approved drugs to market. The drug industry does not have an enviable history of no-fault drug introductions – and Pfizer seems to be out to capture the eightball title. And can you imagine the credibility of interest groups and lobbyists who have received funding from Pfizer and other drug companies while making their cases to Congress on Health Care Reform ? Truly Pfizer Pfizzles.