The world’s largest drugmaker Pfizer (PFE) now leads the list of largest healthcare fraud settlement payers. The company yesterday announced that it finalized with the U.S. Department of Justice (DoJ) to pay a total of $2.3 billion in penalty. The penalty is related to its off-label promotional practices for Bextra, and other fraudulent marketing practices for the promotion of four drugs. Pfizer also entered into an integrity agreement with the Health and Human Services Department under which it has agreed to ensure proper checks for a period of five years in order to avoid such issues.

In 2005, Bextra was voluntarily withdrawn from the market as it was illegally promoted for several unapproved indications and dosages. In order to resolve the matter, Pfizer agreed to pay a criminal fine of $1.3 billion, which is the largest criminal fine ever imposed in the U.S. In addition, the company agreed to pay $1 billion to settle its illegal promotional allegations of Bextra, anti-psychotic drug Geodon, antibiotic Zyvox, and anti-epileptic drug Lyrica.

Bextra (valdecoxib) was used for inflammation management, stiffness and the pain of osteoarthritis, adult rheumatoid arthritis and painful menstruation. Some adverse events were witnessed by the long term users of the drug like cardiovascular problems and life-threatening skin reactions. Due to these adverse events, Pfizer had to withdraw Bextra from the market in 2005.

The huge settlement payment made by Pfizer is way ahead of Eli Lilly & Co.‘s (LLY) $1.42 billion payment to settle its off-label promotional expenses related to Zyprexa in the U.S. between 1999 and 2001 (announced Jan 15). Pfizer recorded the $2.3 billion charge in its fourth quarter and full-year 2008 results following the preliminary agreement reached (on Jan 26) with the U.S. Attorney for the District of Massachusetts.

Pfizer confirmed that no further charges related to this case will be recorded in future. The company will take a charge of $33 million in the current quarter under agreements reached with several state authorities to settle state civil consumer protection allegations related to its past promotional practices of Geodon.

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