Dept of Justice Scores Largest “Health Care Fraud” Settlement in Its History
By Rady Ananda
Global drugmaker, Pfizer Inc., and its subsidiary, Pharmacia & Upjohn Company Inc., have agreed to pay $2.3 billion, the largest health care fraud settlement in the history of the Department of Justice, to resolve criminal and civil liability arising from the illegal promotion of certain pharmaceutical products, the Justice Department announced yesterday. The settlement covers criminal activity since at least 2005.
Pharmacia & Upjohn Company earned a felony conviction which it will pay off to the tune of $1.3 billion, “the largest criminal fine ever imposed in the United States for any matter.” Pfizer will pay the other billion dollars.
“This historic settlement will return nearly $1 billion to Medicare, Medicaid, and other government insurance programs, securing their future for the Americans who depend on these programs,” said Kathleen Sebelius, Secretary of Department of Health and Human Services.
Six whistleblowers will receive payments totaling more than $102 million from the federal share of the civil recovery, $669 million. State Medicaid will receive $331 million.
In 2008, Pfizer revenues reached $48.3 billion.
No one is doing jail time. (Can you imagine what would happen to you for selling drugs illegally?) Instead, Pfizer reps will undergo integrity training by the Office of Inspector General of the Department of Health and Human Services (OIG).
Pfizer will be expected to design a new self-regulating integrity check system, probably similar to HACCP that Big Meat observes. Instead of Hazard Analysis Critical Control Point, the OIG calls it a Corporate Integrity Agreement (CIA). With that as its moniker, Inspector General Daniel R. Levinson announced:
“This historic settlement emphasizes the government’s commitment to corporate and individual accountability and to transparency throughout the pharmaceutical industry.”
Levinson did not disclose which persons were held “individually accountable” or in what manner, nor did the DOJ in its press release.
Levinson did further explain that the Corporate Integrity Agreement “requires senior Pfizer executives and board members to complete annual compliance certifications and opens Pfizer to more public scrutiny by requiring it to make detailed disclosures on its Web site. We expect this agreement to increase integrity in the marketing of pharmaceuticals.”
Drug maker integrity would sharply increase if Pfizer and Upjohn lost their corporate charters, and their top executives served prison time.
Also see April 4, 2010 update, Dept of Justice snared in fraud over Pfizer prosecution: ‘Too big to nail!’