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Post date: May 13 2004

Pharmaceutical Giant Agrees To Historic Settlement

Attorney General Spitzer today announced a series of agreements with a leading pharmaceutical company to resolve allegations of illegal and deceptive promotions of one of its blockbuster drugs.

Warner-Lambert, a subsidiary of Pfizer, Inc. - the world's largest pharmaceutical company - entered into the unprecedented global settlement worth $430 million with federal and state agencies.

Specifically, Warner-Lambert today resolved investigations by Spitzer's Medicaid Fraud Control Unit and the National Association of Medicaid Fraud Control Units and will pay $152 million in damages and penalties to the various states' Medicaid programs. New York State's portion of this settlement, $12.8 million, amounts to almost ten percent of all proceeds from the national medicaid case.

In a related matter, the consumer fraud offices of all 50 states - led by New York, Vermont, Oregon, Texas, Florida and Ohio - resolved allegations against Warner-Lambert's Parke Davis division and will receive $38 million for educational programs, advertising campaigns, and to cover their costs of the investigation.

The states' settlements were reached in conjunction with a federal settlement negotiated by the United States Attorney's Office in Boston, in which Warner-Lambert pled guilty to violating the Food, Drug and Cosmetics Act and paid a fine of $240 million.

"It is critically important that physicians and their patients receive fair, balanced and accurate information about prescription drugs and the conditions these medications are approved to treat," Spitzer said. "Marketing strategies that deceptively and illegally promote drugs for unapproved purposes in order to increase a pharmaceutical company's bottom line will be aggressively investigated."

This case marks the first time that consumer protection staff of the offices of the attorneys general and the National Association of Medicaid Fraud Control Units jointly negotiated a case. The investigations revealed that Warner-Lambert engaged in numerous illegal and deceptive business practices to convince physicians to prescribe its blockbuster epilepsy drug, Neurontin, to treat ailments for which the drug was not approved.

Investigators focused on Warner-Lambert's efforts to promote Neurontin for other "off-label" indications such as bipolar disorder, attention deficit disorder, restless leg syndrome, pain after a herpes outbreak, and migraines. It is illegal for pharmaceutical manufacturers to promote the off-label use of their drugs, although doctors are permitted to prescribe for such uses.

The investigation revealed that Warner-Lambert engaged in promotion of Neurontin for off-label indications for which there is little or no scientific evidence of efficacy. It is estimated that Neurontin sales for 2003 reached $2.7 billion; however, approximately 90 percent of the drug's prescriptions were for off-label purposes.

Among the methods used by Warner-Lambert to promote Neurontin were:

  • Continuing medical education classes that lacked fair balance, misrepresented the nature of the class and provided expensive "perks" to attending physicians;
  • A "publication strategy" that subsidized the production and dissemination of anecdotal reports favorable to off-label use of Neurontin and were of no scientific value;
  • Payments to prescribers for "research" that were, in effect, kickbacks for off-label prescribing; and
  • Providing incomplete information about Neurontin to the drug reference compendium "Drugdex."

Under the terms of the consumer fraud settlement, Warner-Lambert's corporate parent Pfizer, Inc. will be prohibited from:

  • Making false, misleading or deceptive oral or written claims about Neurontin and from promoting its off-label uses in violation of federal law;
  • Misrepresenting the nature of scientific evidence relating to Neurontin;
  • Disseminating written materials that have not appeared in peer reviewed scientific journals;
  • Failing to make disclosures about funding of research and educational events related to Neurontin;
  • Misrepresenting the credentials of sales, medical and technical personnel;
  • Providing information that is misleading or lacking in fair balance to drug reference compendia; and
  • Violating federal anti-kickback laws.

In addition, pursuant to the states' settlement, Warner-Lambert agreed to require speakers at educational events related to Neurontin who have financial relationships with Warner-Lambert or Pfizer to disclose their relationship, including whether the speaker has been paid to promote Neurontin. Although they are considered voluntary industry guidelines, Pfizer will be required to comply with the Pharmaceutical Research and Manufacturers of America Code with respect to payments, gifts and remuneration to health care providers and the Accreditation Council for Continuing Medical Education Guidelines.

In resolving the consumer fraud investigation, Warner-Lambert agreed to pay $28 million for a remediation program, of which at least $21 million will be used to fund education programs, which will make grants available to governmental entities, academic institutions and not-for-profits organizations that provide physicians and/or consumers with fair and balanced information about drugs. Approximately $6 million will go toward a national advertising campaign to provide physicians and consumers with information about Neurontin and other similar drugs. Finally, $1 million will be utilized to evaluate the effectiveness of the remediation program.

In addition, Warner-Lambert will pay $10 million to the states to cover their costs of the investigation. New York State's share of this payment will be $678,000.

For New York State, the investigation was handled by Assistant Attorney General Shirley Stark of the Consumer Frauds and Protection Bureau and Special Assistant Attorney General Patrick Lupinetti, Director of the Medicaid Fraud Control Unit's Special Projects Unit.