Who paid the largest criminal fine in history and why?

The settlement resolved allegations that Pfizer marketed its painkiller Bextra for uses not approved by the FDA, and that the company paid kickbacks to healthcare providers to prescribe several of its drugs, including Bextra, Geodon, Zyvox, and Lyrica.

The settlement included a criminal fine of $1.3 billion, which was the largest criminal fine ever imposed in the United States at the time. Pfizer also agreed to pay $1 billion in civil penalties to settle claims under the False Claims Act and related state laws.

The settlement was the result of a four-year investigation by the U.S. Department of Justice, and it served as a warning to other pharmaceutical companies about the risks of promoting drugs for unapproved uses and paying kickbacks to doctors.

Details

In 2009, Pfizer Inc., one of the largest pharmaceutical companies in the world, was involved in a criminal investigation by the U.S. Department of Justice (DOJ) related to its marketing practices for several of its drugs. The investigation focused on allegations that Pfizer marketed its painkiller Bextra for uses not approved by the U.S. Food and Drug Administration (FDA), and that it paid illegal kickbacks to healthcare providers to prescribe several of its drugs, including Bextra, Geodon, Zyvox, and Lyrica.

Specifically, the DOJ alleged that Pfizer had engaged in off-label marketing of Bextra, which means promoting the drug for uses that were not approved by the FDA. Bextra had been approved by the FDA for the treatment of arthritis and menstrual pain, but Pfizer had allegedly marketed the drug for other uses, including acute pain and surgical pain. The DOJ also alleged that Pfizer had paid kickbacks to doctors to prescribe its drugs, including offering free trips, consulting contracts, and other incentives.

As a result of the investigation, Pfizer agreed to pay a total of $2.3 billion to resolve criminal and civil liability for its marketing practices. This settlement included a $1.3 billion criminal fine, which was the largest criminal fine ever imposed in the United States at the time. The remaining $1 billion was paid to settle claims under the False Claims Act and related state laws.

The settlement also included a corporate integrity agreement (CIA) with the U.S. Department of Health and Human Services, which required Pfizer to implement comprehensive compliance measures to ensure that its marketing practices were in compliance with all applicable laws and regulations. The CIA also required Pfizer to submit quarterly reports to the government for five years, detailing its compliance efforts.

The Pfizer settlement was one of the largest healthcare fraud settlements in U.S. history, and it served as a warning to other pharmaceutical companies about the risks of engaging in off-label marketing and illegal kickbacks.

Pfizer's criminal history

Pfizer, like many large corporations, has had a number of legal and regulatory issues over the years, some of which have resulted in criminal charges or fines. Here are some examples of Pfizer's criminal history:

1. 2009 Settlement: As mentioned earlier, in 2009, Pfizer agreed to pay $2.3 billion to resolve criminal and civil liability related to its marketing practices for several of its drugs, including the painkiller Bextra. This settlement included a $1.3 billion criminal fine, which was the largest criminal fine ever imposed in the United States at the time.

2. 2012 Settlement: In 2012, Pfizer agreed to pay $55 million to settle charges that it had bribed foreign officials to win business in several countries, including China, Russia, and Bulgaria. The company entered into a deferred prosecution agreement, in which it agreed to pay the fine and to implement enhanced compliance measures to prevent future violations.

3. 2016 Settlement: In 2016, Pfizer subsidiary Hospira agreed to pay $75 million to settle charges that it had overcharged Medicaid for a drug used to treat seizures. The settlement resolved allegations that Hospira had reported inflated prices for the drug, leading to inflated reimbursements from Medicaid.

4. 2020 Settlement: In 2020, Pfizer agreed to pay $2.3 billion to settle allegations that it had misled investors about the safety and efficacy of its arthritis drug, Celebrex, and its painkiller, Bextra. The settlement resolved a class-action lawsuit brought by investors who had purchased Pfizer stock between 2000 and 2006.

It's worth noting that these cases represent a small portion of Pfizer's overall business activities, and the company has also had many positive contributions to the healthcare industry, such as developing life-saving drugs and vaccines. However, like all companies, Pfizer is subject to legal and regulatory scrutiny, and it has faced consequences when it has violated laws and regulations.