Two subsidiaries of Pfizer Inc. have agreed to pay fines totaling $34.7 million for offering a kickback to recommend company drugs and for illegally promoting the human growth hormone product Genotropin for nonapproved uses, federal prosecutors said yesterday.
Prosecutors allege that Pharmacia & Upjohn Co. offered to overpay a subsidiary of a pharmacy benefit manager by $12.3 million in the hope the company would, in turn, recommend Pharmacia's drug products to its clients.
Pharmacy benefit managers act as middlemen between pharmaceutical companies and health insurers, often making product recommendations to health plans based on a drug's efficacy or cost-effectiveness.
Pharmacia hired the pharmacy benefit manager to distribute Genotropin. Prosecutors allege the company then offered to make excess payments on the distribution contract in an effort to improperly influence the unnamed pharmacy benefit manager's decision on which drugs to include on its list of product recommendations.
Under a plea agreement filed in US District Court yesterday, the company has agreed to plead guilty to one count of offering a kickback and to pay a criminal fine of $19.7 million.
Another Pfizer subsidiary, Pharmacia & Upjohn Co. LLC, has agreed to pay $15 million to settle allegations that it illegally promoted Genotropin for uses not approved by the Food & Drug Administration. Genotropin is approved by the FDA for treatment of children with growth failure and for other growth-related diseases, such as long-term replacement therapy in adults with growth hormone deficiency.
Prosecutors allege that Pharmacia & Upjohn promoted Genotropin for antiaging, cosmetic use, and athletic performance enhancement. Doctors are allowed to prescribe medications for so called "off-label" uses, but it is illegal for pharmaceutical companies to market drugs for unapproved uses.
Sullivan noted that New York-based Pfizer, which acquired Pharmacia in April 2003, acted responsibly when it disclosed Pharmacia's unlawful promotion of human growth hormone to various federal government agencies in May of that year.
Pfizer said both settlements cover activities that occurred at the Pharmacia subsidiaries, based in Bridgewater, N.J., before it was acquired by Pfizer.
"As the Department of Justice has acknowledged, Pfizer voluntarily and fully self-disclosed the off-label promotion of Genotropin by a Pharmacia subsidiary before Pharmacia was acquired by Pfizer," Pfizer general counsel Allen Waxman said in a prepared statement. "Pfizer's marketing and promotion practices are not involved in the settlement," he added.