30 Jul (NY TIMES) – The drug maker Pfizer agreed to pay $491 million to settle criminal and civil charges over the illegal marketing of the kidney-transplant drug Rapamune, the Justice Department announced on Tuesday. The settlement is the latest in a string of big-money cases involving the sales practices of major pharmaceutical companies; four years ago, Pfizer paid $2.3 billion for improperly marketing several drugs. The recent case centers on the practices of Wyeth Pharmaceuticals, which Pfizer acquired in 2009.
Rapamune, which prevents the body’s immune system from rejecting a transplanted organ, was approved by the Food and Drug Administration in 1999 for use in patients receiving a kidney transplant. However, federal officials said Wyeth aggressively promoted the drug for use in patients receiving other organ transplants, even offering financial incentives to its sales force to do so.
Accusations of Wyeth’s practices became public in 2010 after a whistle-blower lawsuit filed by two former employees was unsealed. After lawmakers announced a Congressional inquiry, the Justice Department opted to join the lawsuit. The settlement announced Tuesday, which also resolves a second, similar whistle-blower suit, includes a criminal fine and forfeiture of $233.5 million, and a civil settlement of $257.4 million with the federal government, all 50 states and the District of Columbia.
Pfizer disclosed last fall that it was negotiating a settlement in the case, and took a $491 million charge in the third quarter of 2012. Reuben A. Guttman, a lawyer for two of the whistle-blowers, said the spate of pharmaceutical settlements in recent years had blunted reaction to what he said were shameful practices.
“Everybody’s been asking me why this case is different than any other,” he said. “We used to trust these companies. You can’t trust these companies anymore.”
In a statement, Pfizer noted that it was not a target of the Justice Department’s case, and said the company
“cooperated fully with the government from the time it learned of this investigation in October 2009. That cooperation was acknowledged today by the Justice Department.”
Also on Tuesday, Pfizer announced that its second-quarter revenues fell 7 percent, to $12.97 billion, from $13.97 billion in the same period last year as it continued to face competition from generic versions of its brand-name drugs. The company’s net income quadrupled to $14.01 billion, from $3.25 billion, partly because of the sale of its animal-health business.