Pfizer And Feds Hold Talks Over Protonix Charges
3 CommentsBy Ed Silverman // March 22nd, 2011 // 7:28 am
Pfizer is holding talks with the US Department of Justice to settle charges the drugmaker committed fraud against government health programs by failing to report discounts and rebates for its Protonix heartburn med, according to a court document. A joint motion filed on March 11 in federal court in Boston asked for extended deadlines related to discovery, among other things, and noted the requests “are necessary to permit the parties to continue to engage in settlement discussions” (read this).
The development comes less than a year after 17 states joined a pair of whistleblower lawsuits alleging Wyeth, which is now owned by Pfizer, knowingly failed to report certain discounted prices as required by laws governing the Medicaid program. As a result, Wyeth allegedly avoided paying hundreds of millions in rebates due to state Medicaid programs for Protonix Oral and Protonix IV (back story). Two years ago, 16 other states filed suit alleging the same charges.
Wyeth was accused of offering steep discounts to thousands of hospitals nationwide for both forms of Protonix under a pricing arrangement known as the “Protonix Performance Agreement,” which required hospitals to buy the drugs in a “bundled” package in exchange for a steep discount. The idea, according to the lawsuit filed by the states, was that Wyeth wanted to gain access to the retail outpatient market, hoping that patients who used the intravenous version in the hospital would later purchase Protonix Oral once discharged from a hospital.
In a separate filing last month, Pfizer cited earlier estimates from the government that its liability could exceed more than $2 billion (look here). Although this might not come to fruition, the amount approaches the $2.3 billion settlement Pfizer reached in 2009 with the feds over civil and criminal charges for off-label marketing of its Bextra painkiller and three other meds - the Geodon antipsychotic; the Zyvox antibiotic, and the Lyrica epilepsy pill.
david egilman
This could not be the same Pfizer that is complying with a compliance agreement pursuant to the 2.3 billion penalty agreement.
If it were that company one might ask if the compliance off icier who is the CEO or general counsel reported these things. If it is the same company you would think the DOJ would put someone in JAIL for violating another compliance agreement since the actions resulted in that 2.3 billion occurred during & after the Neurontin compliance agreement.
If not then these compliance agreements are worse than nothing because they give the false impression that something is being done to remedy a problem when that is not the case.
Insider
I would think the proboem happened before the purchase of Wyeth. However, one would think Pfizer had a good idea what was going on. It sounds similar to what Merck did with Vioxx and use in the hospitals. I think Merck wa selling Vioxx for a dolar a tablet to get the retail business after the patient left the hospital. I believe the feds really nailed them for that practice. I think the feds will do the same on this issue with Wyeth. It is my belief tha the feds could have nailed Pfizer much harder than 2.3 billion if they wanted to because the fraud was so company wide and invovled huge dollars. There were all kinds of false advertising issues that were never touched with Celebrex.
I think Pfizer is in trouble again, this seems like a obvious huge violation by Wyeth. Pfizer should have looked into it before they bought the company. I am sure the feds had been asking questions before the purchase.
pharma gal
To David, you notice these penalties are never too punitive relative to the resources of Pfizer or Wyeth. I think the government does not really want to hurt the companies, rather just extract a “tax”. To the extent that the punishment is not too crippling the companies take these fines as the “cost of doing busines” and factor it in the price of the drugs just as they factor the cost of litigation. It is for this reason that executives will not be punished for tansgressions. This way there is a silent pressure to do whatever necessary to get the ridiculously high sales forcasts. So people push the envelope. The company pays the fine as the cost of doing business…if it gets caught.