Pfizer's Warner-Lambert unit agreed to plead guilty to criminal behavior and pay more than $430 million in fines to resolve charges that its Parke-Davis subsidiary illegally encouraged doctors to prescribe the epilepsy drug Neurontin for unapproved uses. The settlement includes a $240 million criminal fine, the second-largest ever in criminal healthcare fraud prosecution, and $152 million in civil fines to be shared among state and federal Medicaid agencies. An additional $38 million will go to state consumer protection agencies. The Justice Department alleged that Parke-Davis concealed and misstated some clinical information about Neurontin's ability to treat several conditions not included in its Food and Drug Administration approval and paid physicians millions of dollars to promote the off-label uses. Pfizer said the claims concern activity that occurred before it acquired Parke-Davis as part of its purchase of Warner-Lambert in 2000.
The settlement was announced the same day as the Justice Department's No. 2 leader told an audience of healthcare fraud lawyers that the agency was strongly committed to pursuing and prosecuting companies and providers who hurt patients and defraud government healthcare programs. Speaking to more than 250 lawyers at the American Bar Association's National Institute on Healthcare Fraud in New Orleans, Deputy Attorney General James Comey said that the U.S. had launched a new investigation into prescription-drug fraud called the Pharma Initiative. He also outlined "illustrations of appalling behavior" in the healthcare industry, including allegedly unnecessary surgery at Redding (Calif.) Medical Center, kickback payments to physicians from drug companies and others, and inadequate care at nursing homes. A former U.S. attorney in New York City, Comey said the Justice Department had gathered U.S. attorneys from around the nation two weeks ago to reaffirm that healthcare fraud is a top priority. "It's always been on their list," he said. "But we thought it needed a shot in the arm." -- by Mark Taylor with the Associated Press