Eleven years ago, on this day, the US healthcare industry was rocked by the largest criminal scandal it had ever seen. Pfizer, one of the world’s leading drug companies, was slapped with the largest criminal fine in American history as part of a $2.3 billion settlement with federal prosecutors. The charges - misrepresenting and promoting medicines without FDA approval along with paying kickbacks to doctors.
Pfizer pleaded guilty to illegally marketing its painkiller, Bextra for uses not approved by medical regulators. The company withdrew Bextra from the market in 2004.
The case was unprecedented in exposing rampant criminality in the health care sector. The case stood out also in its David and Goliath trope - where testimonies provided by six whistleblowers crippled a global pharmaceutical giant. Federal prosecutors heavily relied on evidence supplied by whistleblowers to build a solid case against Pfizer.
The case against Pfizer for fraudulently marketing drugs goes down in history as the most important health fraud settlement in US history, with the largest criminal fine of any kind.
Back to The Start
Pfizer’s woes began when John Kopchinski, a Pfizer sales rep in Florida, blew the whistle (and with it, the entire ceiling) on the company’s ethics or lack thereof.
Kopchinski, a Gulf War veteran, worked for Pfizer in South Florida until he was fired in 2003. He subsequently filed a lawsuit where he accused Pfizer of aggressively promoting Bextra for conditions beyond its approved uses, namely, arthritis and menstrual pain. He contended that Pfizer continued to market Bextra despite being aware of adverse sideeffects like heart attacks, strokes, and blood clots.
Kopchinski also spoke of sales reps receiving a $50 bounty if they convinced doctors to prescribe Bextra during standard pre and post-surgery care for patients. These protocols directed patients to take high doses of Bextra before and after a scheduled surgery.
Bextra had received approval to relieve arthritis pain (10 milligrams once a day) and menstrual pain (20 milligrams twice a day). The FDA rejected an application to market the drug for other uses since the risks were higher than the rewards. Regardless, Pfizer pushed sales reps to prescribe Bextra for other conditions and at higher doses.
A Settlement of Firsts
The six-year investigation contained a slew of civil and criminal allegations culminating in a $2.3 billion settlement in 2009. Pfizer's subsidiary, Pharmacia & Upjohn, paid a criminal fine of $1.3bn. The settlement was the first of its kind in American judicial history.
Pfizer also paid $1bn in civil settlements to Medicare, Medicaid, and other government health insurance schemes.
The Justice Department directed Pfizer to Pfizer pay a $1.3 billion criminal penalty associated with Bextra, along with civil fines amounting to $1 billion concerning other medicines.
The six whistleblowers collected a combined $102 million from federal shares of the settlement.
A growing number of drug makers remain under the scanner for giving kickbacks to doctors or fleecing federal programs. Since the Bextra scandal, prosecutors have exercised tighter controls through fines going into billions of dollars and prosecuting the doctors concerned.
Interestingly, Pfizer’s story today seems to be one of resurgence. While lessons from the Bextra scandal remain, the company is better known as the developer of one of the world’s first COVID-19 vaccines.