Video: Pfizer hit with staggering drug settlement

updated 9/4/2009 5:38:34 PM ET 2009-09-04T21:38:34

Pfizer Inc. was slapped this week with a record $2.3 billion in fines for illegally marketing some drugs, but critics say even that eye-popping total is unlikely to end the sometimes-dangerous practice of promoting drugs for unapproved uses.

The penalty pales compared to the billion dollars or more in annual revenue that blockbuster drugs generate, and new government guidelines stir worry that the marketing of medicines for unapproved uses will become easier.

"Drug companies will continue to market off-label unless the financial downside makes it unprofitable," said Dr. Adriane Fugh-Berman, a Georgetown University associate medical professor.

Off-label marketing is a tricky issue. Doctors say prescriptions for uses not noted on a drug's package label — the fine-print insert that comes with the prescription — play a crucial role in treating patients, especially those with deadly illnesses and few treatment options.

However, the Food and Drug Administration prohibits companies from promoting their drugs for uses it has not approved.

Slap on the wrist
Huge fines for those caught violating these rules usually just nibble at drug company sales totals.

Pfizer's fine is the largest health care fraud settlement in U.S. Justice Department history. But that $2.3 billion total stands small compared to the $44.2 billion in pharmaceutical sales the world's largest drugmaker rang up last year.

"$2.3 billion looks like a lot of money," Fugh-Berman said. "But these are highly profitable drugs. It will not take them very long to make up that deficit."

The Georgetown professor has served as a paid witness in court cases over drug marketing and founded the watchdog Web site pharmedout.org.

Pfizer accounted for the settlement in last year's fourth quarter. The charge dragged down its quarterly profit by 90 percent to $268 million.

Prosecutors said Pfizer promoted four prescription drugs, including the discontinued pain killer Bextra and the blockbuster Lyrica, for epilepsy and nerve pain such as fibromyalgia, as treatments for medical conditions not approved by federal regulators. Lyrica alone registered $2.6 billion in sales last year.

Authorities also accused the drugmaker of plying doctors with free golf, massages and resort junkets.

In 2004, Pfizer also paid $430 million to settle allegations it marketed the epilepsy drug Neurontin for pain and psychiatric illnesses. A plaintiff's attorney in a civil case over the drug has estimated that Pfizer made about $10 billion in Neurontin sales for unapproved uses from 1999 to 2004.

Not just Pfizer
But Pfizer by no means corners the market on off-label marketing fines.

Earlier this year, Indianapolis-based Eli Lilly & Co. agreed to pay $1.42 billion to settle a case over the marketing of its top seller Zyprexa, an anti-psychotic drug.

Court documents say Lilly made "hundreds of millions of dollars" through off-label Zyprexa promotions, but it's hard to pin down the exact impact of improper marketing.

Zyprexa's annual U.S. sales nearly doubled between 1999 and 2003, to $2.64 billion. But company officials note that regulators approved some additional uses for Zyprexa in that span, and that gave doctors more information about its safety and effectiveness.

The drug industry — and even some doctors — downplay the frequency of illegal promotions and their effect on off-label prescriptions, which give doctors treatment flexibility.

For example, the standard treatment for years for severe psoriatic arthritis was methotrexate, but the drug actually was approved to treat rheumatoid arthritis, said Dr. Eric Ruderman, a rheumatologist at the Northwestern University Feinberg School of Medicine.

"If you had to stick to labeling, you couldn't treat people," said Ruderman, who has done some consulting work for Abbott Laboratories and received research grants from several drugmakers.

Ruderman noted that common uses often are technically off-label because it's expensive — and often unprofitable — for companies to pursue FDA approval for every possible use of their drug.

Still, Ruderman said off-label marketing is never appropriate and noted that decisions about off-label use should be left to doctors weighing "published evidence" supporting it.

Potentially dangerous loophole
Under new rules established this year by the FDA, salespeople may distribute to doctors copies of scientific journal articles that discuss off-label uses. Industry critics see that as a potentially dangerous loophole.

The rules come with qualifiers. For instance, the articles should come from peer-reviewed journals, and the reports cannot be edited by the drugmaker.

Despite the precautions, Fugh-Berman calls the guidance "a horrible idea."

"When you go to the Volvo dealer, do you really expect an accurate comparison of their cars with other manufacturer's cars?" she said.

The drug industry says that it does a much better job policing against off-label marketing than it did 10 or 15 years ago and that most companies have mandatory training.

Fugh-Berman said fines alone will not end off-label marketing, but they can curb the practice when coupled with corporate integrity agreements like one the Justice Department imposed on Pfizer. These can force companies to disclose doctor payments or other information they'd rather keep under wraps.

"Our sense is that companies fear corporate integrity agreements more than fines," Fugh-Berman said. "We don't want fines to become just another line item in their budget."

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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