Pfizer Inc agreed on Wednesday to plead guilty to a criminal charge relating to promotions of its now-withdrawn Bextra pain medicine and will pay a record $2.3 billion to settle allegations it improperly marketed 13 medicines.
The world's biggest drugmaker was slapped with the significant fines on Wednesday after being deemed a repeat offender in pitching drugs to patients and doctors for conditions not approved by healthcare regulators.
Pfizer had pleaded guilty in 2004 to an earlier criminal charge of improper sales tactics and its marketing practices have been under federal supervision since then.
The company, which is acquiring rival Wyeth, had warned in January that it had taken a $2.3 billion charge late last year to resolve allegations involving Bextra and other drugs, but did not provide details at the time.
The agreement was unveiled by the U.S. Department of Justice and Health and Human Services Department,
The size and seriousness of this resolution, including the huge criminal fine of $1.3 billion, reflect the seriousness and scope of Pfizer's crimes, said Mike Loucks, acting U.S. attorney for the District of Massachusetts.
The settlement announced on Wednesday by Pfizer includes a $1.3 billion criminal fine related to methods of selling Bextra, which was withdrawn from the market in 2005 on safety concerns.
It also includes $1 billion in civil payments related to so-called off-label sales of drugs -- meaning for uses not authorized by the U.S. Food and Drug Administration -- and payments to healthcare professionals.
We regret certain actions taken in the past, but are proud of the action we've taken to strengthen our internal controls, said Amy Schulman, Pfizer's general counsel.
It would be the largest settlement to date for improper marketing of prescription drugs, topping the $1.42 billion Eli Lilly and Co agreed to pay earlier this year for off-label sales of its Zyprexa schizophrenia drug.
Pfizer said it will pay $503 million to resolve practices involving Bextra, $301 million related to its schizophrenia drug Geodon, $98 million for antibiotic Zyvox and about $50 million for its blockbuster Lyrica used to treat nerve pain and seizures.
The company said most of the alleged improprieties took place during or before 2005. Company Chief Executive Jeffrey Kindler had been Pfizer's general counsel from 2002 until taking the helm in 2006.
Pfizer had pleaded guilty in 2004 to an unrelated criminal charge of improper sales tactics related to its Neurontin seizure drug and its marketing practices have been under federal supervision since then.
In the earlier case, Pfizer's Warner Lambert subsidiary had been accused of marketing Neurontin for unapproved uses. Pfizer acquired Neurontin through its merger in 2000 with Warner Lambert.
Pfizer agreed in 2004 to pay $430 million to federal and state governments and pleaded guilty to criminal charges of illegally marketing Neurontin for migraine headaches, pain and bipolar disorder.
Pfizer shares were little changed at $16.36 in morning trading on the New York Stock Exchange.
(Reporting by Jeremy Pelofsky in Washington and Ransdell Pierson, Bill Berkrot and Joan Gralla in New York, editing by Bill Trott and Maureen Bavdek)