Colorado gets $3.5 million from drug settlement

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Colorado will receive $3.5 million as part of two settlements with drug manufacturer Pfizer, including $2.8 million as part of a $1 billion Medicaid multistate settlement and $705,000 as part of a $33 million non-Medicaid multistate settlement.

The larger of the two settlements – which is the largest Medicaid pharmaceutical settlement in history – settles allegations that Pfizer improperly marketed four drugs and paid kickbacks to persuade doctors to prescribe those drugs and nine others. The second settlement concerns the marketing of Geodon, an “atypical antipsychotic” medication.

“These settlements underline that Colorado and its peer states will not tolerate off-label marketing schemes that place a drain on the health care our states provide for the neediest of our residents and expose patients to potentially serious side effects from drugs that are not being prescribed as approved,” said Attorney General John Suthers.

Under the larger of the two settlements, Pfizer will be required to pay $1 billion in civil damages to the states’ Medicaid programs and other federal health care programs, including Medicare and the TriCare military health plan.

Pharmacia & Upjohn Co. Inc., a Pfizer subsidiary, also has agreed as part of the settlement to plead guilty to a criminal charge and pay criminal fines totaling $1.3 billion. Pharmacia & Upjohn Co.’s plea resolves allegations surrounding the marketing of the drug Bextra, which was pulled from the market in 2005.

The state’s Medicaid settlement agreement resolves allegations that Pfizer marketed and promoted Bextra, Lyrica, Zyvox and Geodon for uses not approved by the U.S. Food and Drug Administration. For example, Pfizer allegedly promoted Bextra for unapproved medical conditions and dosages, and promoted Geodon for pediatric and adolescent patients for whom the FDA had only approved the drug for the treatment of schizophrenia and manic or mixed episodes of bipolar disorder in adults.

It generally is not illegal for doctors to prescribe drugs for off-label uses, however, it is illegal for drug manufacturers to market drugs for off-label uses. State Medicaid programs usually do not pay for prescriptions for off-label purposes.

The agreement also resolves allegations that Pfizer paid kickbacks to physicians and other providers to induce them to prescribe not only the four drugs named above, but also Aricept, Celebrex, Lipitor, Norvasc, Relpax, Viagra, Zithromax, Zoloft and Zyrtec.*The kickbacks included the use of speaker programs, mentorships and improper gifts, such as entertainment and meals.

The $1 billion settlement resolves government health care program claims and is separate from Pfizer’s October 2008 settlement of 33 states’ consumer-protection marketing claims and the numerous individual lawsuits over the risks and effectiveness of Celebrex and Bextra.

Colorado’s Medicaid program pays out nearly $4 billion every year for the medical care of about 700,000 qualified recipients. The 14-member Medicaid Fraud Control Unit investigates and prosecutes providers suspected of defrauding the Colorado’s Medicaid program.

The Medicaid Fraud Control Unit also investigates and prosecutes cases involving the physical and financial abuse of seniors and other residents of federally funded long-term care facilities.

One Response to Colorado gets $3.5 million from drug settlement

  1. What I do not understand is how many of these companies spend so much money in education on corporate social responsibility yet constantly fail miserably. Is it to them just a cost of doing business write-off and just to show face as if doing good to the public but not? Hopefully the liabilites may serve as a future deterrant, however it does not take back how it affected the victims.

    Theresa Niel
    January 31, 2010 at 11:28 am