Close on the heels of Lilly's $1.42 billion penalty for off-label marketing comes the news that Pfizer paid out $2.3 billion to settle similar allegations.
News of the Pfizer-Wyeth merger this morning drowned out some not so good news for the company. Just after announcing its $68 billion buyout of Wyeth, Pfizer published its 2008 fourth quarter earnings report. In it, Pfizer reveals a $2.3 billion charge to end investigations into allegations of off-label promotions of the company's COX-2 meds, including Bextra. That settlement caused a 90 percent reduction in Pfizer's 2008 net income, according to its financial report.
Update 9/3/09: This fine went public on Sept 2, 2009, when the Dept of Justice announced the full $2.3 billion and a settlement that included criminal convictions. Huge, unprecedented fine, the biggest criminal fine in DOJ history. But as I note in a post on Sept 2, at least one observer says, absurdly, that the fine (from an investigation four years in the making) is a money grab from Obama to curb medical costs and federalize healthcare.
Indeed, the settlement, which normally would be a pretty big story on its own, is showing up in many papers as just one piece of news within Pfizer's complicated acquisition and fourth-quarter data -- as in this Boston News-Herald story, for example. Some savvy news management, there. A fine that would ordinarily resonate has been swallowed up by an acquisition story that is getting mostly positive press; no mention in the News-Herald, for instance, of whether Pfizer admitted to criminal wrong-doing, as Lilly did.
This is big fine, though. It'll be interesting to see these billion-plus dollar fines bring drug companies to pull back the presumably profitable off-label marketing.