Saturday, November 10, 2012

Pfizer to Plead Guilty to Misdemeanor in Rapamune Settlement | Fox Business


Pfizer Inc.'s (PFE) Wyeth unit plans to plead guilty to a misdemeanor "misbranding" offense under federal drug law as part of its $491 million settlement of a government investigation of the company's promotion of organ-transplant drug Rapamune.
The New York drug maker also said Friday that its Wyeth unit agreed in August to pay $55 million, plus interest, to settle a separate government investigation of promotional practices for the heartburn drug Protonix.
Pfizer disclosed the legal developments in its third-quarter report filed Friday with the Securities and Exchange Commission. The company had said last week that it had an agreement-in-principle for a $491 million resolution of the Rapamune case, but at that time didn't disclose the planned guilty plea.
The U.S. Justice Department has been investigating allegations that Wyeth promoted Rapamune for unauthorized uses and paid kickbacks to doctors.
Lawsuits filed by would-be whistleblowers also accused Wyeth of promoting the drug for use in African-American patients even though they are considered high-risk patients and there was limited clinical data to support such use.
Pfizer has previously said it is committed to providing information to doctors about Rapamune that is consistent with the prescribing label, and that the drug was never contraindicated for African Americans or other high-risk populations.
Pfizer acquired Wyeth in 2009 for $68 billion.
Under the agreement-in-principle with the Justice Department, Pfizer said it will pay about $257 million to resolve the civil allegations surrounding Rapamune and about $234 million to resolve the criminal allegations.
"Wyeth will plead guilty to a misdemeanor misbranding offense under the U.S. Federal Food, Drug and Cosmetic Act," Pfizer said in its SEC filing.
In the Protonix matter, Pfizer said Wyeth entered an agreement-in-principle with the Justice Department in mid-August to resolve a criminal investigation regarding Wyeth's promotional practices for the drug.
Wyeth will pay $55 million in civil disgorgement under the U.S. Federal Food, Drug and Cosmetic Act, plus interest, to resolve the allegations, which relate to the time period from February 2000 through June 2001. Wyeth will not admit to any wrongdoing, Pfizer said.
Both the Rapamune and Protonix agreements are subject to execution of final settlements by the parties, which is expected to occur in the coming months.
Pfizer also said it is exploring various ways to resolve a previously disclosed Justice Department civil probe of Wyeth's pricing practices for Protonix.
Pfizer and other drug makers have agreed in recent years to costly monetary settlements and, in some cases, criminal guilty pleas to resolve government investigations of their marketing practices.
A Pfizer spokesman declined to comment beyond the company's SEC filing.
Many of the cases involved allegations that companies promoted drugs for uses that weren't consistent with prescribing labels approved by the Food and Drug Administration, a practice known as off-label marketing. Companies are generally barred from actively promoting off-label, though doctors have discretion to prescribe off-label.
In 2009, Pfizer agreed to pay $2.3 billion to settle charges that it improperly promoted the painkiller Bextra and other drugs. This year, GlaxoSmithKline PLC (GSK) agreed to pay $3 billion to settle various government investigations of its marketing and regulatory practices.
Pfizer shares rose 12 cents to $24.28 in recent trading.
Write to Peter Loftus at

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