State Medicaid budget gets boost from Pfizer settlement

Connecticut’s Medicaid program will get a $4.3-million boost as part of a record fine levied on Pfizer Inc. as part of a settlement following allegations of illegal marketing tactics and kickbacks that defrauded state and federal health-care programs.

That is half of the state’s share of a $2.3-billion fine to the company, which used to own what is now the Specialty Minerals plant in North Canaan, for defrauding state and federal health-care programs.

Connecticut will split a total of $8.7 million with the federal government, to cover what it paid toward Medicaid costs here, according to a press release from the offices of state Attorney General Richard Blumenthal and Chief State’s Attorney Kevin Kane. The announcement was made Sept. 2.

Connecticut will also receive $614,000 from another settlement — a separate case involving the violation of consumer protection laws.

“This record-setting, multi-billion dollar health-care fraud settlement — the highest in history — sends the drug industry a commanding message:Heal thyself or be brought to heel,� Blumenthal said in the news release. “The criminal felony plea and huge penalty are a bitter pill for Pfizer, but a critical cure for its fraud against taxpayers. Sick, slick, deceptive drug marketing must be met with strong medicine.

“Overreaching, underhanded sales tactics betrayed Pfizer’s trust and heritage. The company aggressively promoted drugs for unapproved, off-label uses, bribed medical professionals with cash and gifts and used thinly disguised kickbacks to hawk its products. Its false and fraudulent claims to Connecticut’s Medicaid cost taxpayers millions — involving some of its popular products like Bextra, Lipitor, Zoloft and Viagra.

“Pfizer’s drug-pushing tactics put profits ahead of patients. The company’s kickbacks endangered patients rather than enhancing health care. Taxpayers, patients, medical professionals and consumers all should be outraged and appalled. Such illegal and unethical marketing is unworthy of a highly competent corporate citizen with dedicated staff and scientists.�

Federal and state authorities alleged that Pfizer:

• Marketed the anti-inflammatory medication Bextra for conditions and dosages other than those for which it was approved, a violation of FDA rules.

• Promoted the antipsychotic drug Geodon for unapproved uses, including to treat attention deficit disorder, autism, dementia and depression for patients that included children and adolescents.

• Sold the pain medication Lyrica for unapproved conditions.

• Made false representations about the safety and efficacy of Zyvox, an antibiotic only approved to treat certain drug resistant infections.

Federal law prohibits taking anything of value in exchange for prescribing a product paid for by a federal health-care program, such as Medicaid. According to the suit, health-care providers were given cash, as well as entertainment, travel and meals in exchange for promoting the company’s products.

Pfizer’s corporate office in New York City released a statement Sept. 2 saying, “In addition, the company has reached agreements with attorneys general in 42 states and the District of Columbia to settle state civil consumer protection allegations related to its past promotional practices concerning Geodon. The company will pay a total of $33 million to the settling states and will take a charge in that amount to third-quarter 2009 earnings.

The release quotes  Amy W. Schulman, senior vice president and general counsel of Pfizer, who said,  “These agreements bring final closure to significant legal matters and help to enhance our focus on what we do best — discovering, developing and delivering innovative medicines to treat patients dealing with some of the world’s most debilitating diseases.

“We regret certain actions taken in the past, but are proud of the action we’ve taken to strengthen our internal controls and pioneer new procedures so that we not only comply with state and federal laws, but also meet the high standards that patients, physicians and the public expect from a leading worldwide company dedicated to healing and better health. Corporate integrity is an absolute priority for Pfizer, and we will continue to take appropriate actions to further enhance our compliance practices and strengthen public trust in our company.�

As for the charges relating to illegal promoition of certain drugs, “Pfizer expressly denies all of these civil allegations, with the exception that Pfizer acknowledges certain improper actions related to the promotion of Zyvox.�

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