Pfizer Agrees To Pay $491 Million Fine For Illegal Marketing Of Rapamune Kidney Transplant Drug
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Pfizer Inc. has admitted to illegal marketing of the kidney transplant drug Rapamune for off-label use in other organ transplant procedures.
U.S. prosecutors said Tuesday the drug maker would plead guilty to a federal charge and pay a $491 million fine for the misbranding of the drug.
The company's Wyeth unit pleaded guilty to one count of illegal marketing and will pay a $157.5 million fine, while another $257 million will go toward civil claims it trained its salesmen to sell the drug to doctors for heart, lung, and pancreas transplants. The unit will also forfeit assets worth $76 million in the agreement, the U.S. Justice Department told reporters.
"This was a systemic corporate effort to seek profit over safety," Sanford Coats, the U.S. attorney in Oklahoma City, said in a press statement.
The U.S. Food and Drug Administration (FDA) approved the drug for use in kidney transplants in 1999, but not for other uses. Although the regulator has no authority over physician use of "off-label" drugs, pharmaceutical companies are prohibited from marketing such uses.
Pfizer, the world's largest pharmaceutical company, reported strong second-quarter profits beating Wall Street estimates, earning 56 cents per share — 1 cent more than expected by an average of 15 analysts, compiled by Bloomberg. The New York-based company's net income rose by more than four times from the previous year to $14.1 billion.
Pfizer said the illegal marketing occurred before the company acquired the Wyeth unit in a $68 billion acquisition in 2009 — making for a slightly higher purchase price, in retrospect.
"Pfizer was not a subject or target of this matter, and cooperated fully with the government from the time it learned of this investigation in October 2009," Chris Loder, a Pfizer spokesman, told reporters.
Wyeth company officials entered the guilty plea today in Oklahoma City to a charge of misbranding the drug. The federal government began investigating Wyeth after some of the company's salesmen filed lawsuits over the illegal practice, according to Reuben Guttman, a lawyer for the money-seeking whistleblowers.
Marlene Sanders and Scott Paris, former salesmen for the company, told the federal government the company trained salesmen to market the drug for off-label uses and promised bonuses for such deals. ""This case is about marketing campaigns that harm thousands of patients seeking accurate information about whether a drug can help them," Guttman told reports.
However, the two salesmen are entitled to a share of the civil fine, although that matter has yet to be settled, the federal government said.