Pfizer Pays $2.3 Billion to Settle Marketing Case

The pharmaceutical giant Pfizer agreed to pay $2.3 billion to settle civil and criminal allegations that it had illegally marketed its painkiller Bextra, which has been withdrawn.

It was the largest health care fraud settlement and the largest criminal fine of any kind ever.

Although the investigation began and largely ended during the Bush administration, top Obama administration officials held a news conference on Wednesday to celebrate the settlement, thank each other for resolving it and promise more crackdowns on health fraud.

“It’s another step in the administration’s ongoing effort to prosecute any individual or organization that tries to rip off health care consumers and the federal government,” said Kathleen Sebelius, secretary of health and human services.

Republicans and Democrats on Capitol Hill have accused the Obama administration of failing to crack down adequately on health care fraud, arguing that huge savings in government health programs could be found with better enforcement. The settlement had been expected. Pfizer, which is acquiring a rival, Wyeth, reported in January that it had taken a $2.3 billion charge to resolve claims involving Bextra and other drugs. It was Pfizer’s fourth settlement over illegal marketing activities since 2002.

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Lilly to Pay Biggest Fine Ever to End Zyprexa Probe (Update7)

Eli Lilly & Co. will plead guilty to a charge of promoting its antipsychotic drug Zyprexa for unapproved uses and pay $1.42 billion, including the largest criminal fine ever imposed by the U.S. on an individual company.

The company admitted its marketing of Zyprexa was illegal in a civil and criminal settlement announced jointly today in a statement by Acting U.S. Attorney Laurie Magid and Attorney General Michael Mukasey. Lilly will also submit to U.S. monitoring against future lawbreaking.

Lilly resolved federal and state probes into how it marketed the drug and will make its guilty plea in U.S. District Court in Philadelphia in the next few weeks, the Indianapolis- based drugmaker said in a statement. Lilly said it promoted Zyprexa in elderly people to treat dementia, a use not approved by the Food and Drug Administration, between September 1999 and March 2001, a criminal violation of the Food, Drug and Cosmetic Act.

“Eli Lilly completely ignored the law” and made “hundred of millions of dollars” from its illegal promotion of Zyprexa, Magid said at a press conference in Philadelphia today. “We’re holding a company responsible for putting thousands and thousands of patients at risk.”

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