Pfizer said Thursday that it has agreed to pay $430 million to settle claims relating to the marketing and promotion of Neurontin by its Warner-Lambert unit, news sources report.
The settlement brings to a close a whistle-blower lawsuit in the U.S. that originated in 1996 alleging that Warner-Lambert's Parke-Davis unit promoted Neurontin for off-label use to treat conditions such as migraines and bipolar disorder. Pfizer said that the settlement "is a full and final resolution by Warner-Lambert of all outstanding federal and state governmental investigations ... related to Neurontin." The drugmaker also noted that the case began before its acquisition of the unit in 2000. Neurontin sales in 2003 were $2.7 billion, compared with $97.5 million in 1995.
"It really was on Warner-Lambert's watch -- it's unlikely to cast a black eye on Pfizer's marketing team," Oppenheimer's Scott Henry is quoted as saying. "$430 million dollars is a large number. Pfizer has a market cap of over $200 billion. Its all relative." Henry also said that it doesn't appear that the decision will have an effect on Pfizer's ability to do business with the government.
Friedman, Billings, Ramsey analyst David Moskowitz noted: "This is a big chunk of money, and sends a warning shot to the drug industry that companies and their sales representatives had better be careful not to promote unauthorised uses of their medicines to doctors."
Under the terms of the settlement, Pfizer will pay a $240 million criminal fine and $152 million in civil fines to be divided between state and federal Medicaid agencies and the whistleblower. An additional $38 million will be set aside for state agencies that investigate drugmaker wrongdoing. Pfizer said that it had already taken a $427 million pre-tax charge to fourth-quarter 2003 earnings, or $403 million after-tax charge, relating to the case, news sources report.
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