September 2, 2009
Jefferson City, Mo. -- Attorney General Chris Koster announced today that Missouri will receive $22 million as part of the largest nationwide Medicaid fraud settlement in history. This recovery adds to Missouri's record-breaking year for Medicaid fraud recovery. The Attorney General's Medicaid fraud unit has collected more than $75 million since January 1, 2009, on behalf of Missouri's Medicaid system.
Koster said today's nationwide settlement is with the pharmaceutical company, Pfizer, and its subsidiaries. Missouri, in conjunction with the United States Justice Department and other Attorneys General, alleged that Pfizer and its subsidiaries paid kickbacks and engaged in off-labeling marketing campaigns that improperly promoted numerous drugs that Pfizer manufactures.
"Pharmaceutical companies are a critical player in Missouri's health-care system, and like every other part of the system these companies must play by the rules," Koster said. "Today's collection of $22 million for Missouri shows why it is so important to our state to stay focused on Medicaid fraud."
So far in 2009, the Attorney General's office has collected more than $75 million in Medicaid fraud recovery, an all-time record for Missouri. The previous high total was $33,589,281.17 in calendar year 2008.
Koster said Pfizer will pay the states and the federal government a total of $1 billion in civil damages and penalties to compensate Medicaid, Medicare, and various federal healthcare programs for harm suffered as a result of its conduct.
In addition, Pharmacia & Upjohn Company, Inc., a Pfizer subsidiary, has agreed to plead guilty to a felony violation of the Food, Drug, and Cosmetic Act (FDCA) and to pay a criminal fine and forfeiture of $1.3 billion. The criminal component of the agreement centers on the illegal marketing and promotion of Bextra, an anti-inflammatory drug that Pfizer pulled from the market in 2005. Because of the illegal promotion, Pharmacia & Upjohn Company, Inc. has agreed to plead guilty to a felony violation of the FDCA for misbranding the drug with the intent to defraud or mislead.
The states and federal government alleged that Pfizer, the largest pharmaceutical manufacturer in the world, engaged in a pattern of unlawful marketing activity to promote multiple drugs for certain uses which the Food and Drug Administration (FDA) had not approved. While it is not illegal for a physician to prescribe a drug for an unapproved use, federal law prohibits a manufacturer from promoting a drug for uses not approved by the FDA. This promotional activity by Pfizer included:
In addition, Pfizer is alleged to have paid illegal remuneration to health care professionals to induce them to promote and prescribe Bextra, Geodon, Lyrica, Zyvox, Aricept, Celebrex, Lipitor, Norvasc, Relpax, Viagra, Zithromax, Zoloft and Zyrtec. These payments allegedly took many forms, including entertainment, cash, travel and meals. Federal law prohibits payment of anything of value in exchange for the prescribing of a product paid for by a federal health care program.
As a condition of the settlement, Pfizer will enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General, which will closely monitor the company's future marketing and sales practices.