The U.S. Justice Department said Tuesday that drugmaker Pfizer Inc. will pay almost $491 million to resolve an investigation into illegal marketing of the organ transplant drug Rapamune by a company Pfizer later acquired.
Pfizer, the world's second-biggest drugmaker, had taken a charge to cover the settlement late last year, when it reached a tentative settlement to resolve lawsuits three whistleblowers had filed back in 2005 and 2007. The Justice Department and numerous other government agencies eventually joined in the probe and the lawsuits.
On Tuesday, New York-based Pfizer agreed to pay $257.4 million in civil settlements with federal and state governments and a $157.6 million criminal fine. Pfizer also will forfeit $76 million in assets.
The Justice Department said the drugmaker Wyeth, which Pfizer bought in October 2009, trained sales representatives to encourage doctors to prescribe Rapamune for uses other than preventing rejection of transplanted kidneys, even giving them bonuses for doing so.
Rapamune was approved in 1999, only for use in kidney transplant patients. Federal laws bar drugmakers from promoting drugs for uses not specifically approved by the Food and Drug Administration.
But the practice has previously been so rampant that there's a term for it - off-label marketing - and multiple law firms specialize in pursuing lawsuits over it. Nearly every big drugmaker, including Pfizer, has been prosecuted for it and eventually agreed to big settlements with the government and whistleblowers, who usually are drug store pharmacists or former pharmaceutical sales reps. The record settlement is $3 billion, paid by British drugmaker GlaxoSmithKline PLC.
In the Rapamune case, whistleblower Mark Campbell, a Wyeth sales rep for 20 years until he resigned in 2009, alleged Wyeth promoted Rapamune for patients getting liver, lung, heart and other transplants - potentially dangerous uses.