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Drugmaker Pfizer to Pay Record Penalty In Improper-Marketing Case
The four-year investigation of Pfizer was ignited by whistleblowers inside the company who quietly sounded alarms about questionable marketing practices, said Kevin Perkins, assistant director of the FBI's criminal investigative division.
Under the False Claims Act, which dates to the Civil War, the corporate insiders who helped expose the fraudulent schemes -- which were costly to Medicare and Medicaid -- will receive a portion of the financial recovery. John Kopchinski, a West Point graduate and Gulf War veteran who joined Pfizer as a salesman in Florida, is set to collect more than $51 million.
"In the Army, I was expected to protect people at all costs," Kopchinski said in a statement distributed by his attorneys at the Washington firm Phillips & Cohen. "At Pfizer I was expected to increase profits at all costs, even when sales meant endangering lives. I couldn't do that."
Pfizer officials said they already had reserved funds in the 2008 books for the settlement, the broad outlines of which were known to the company.
"These agreements bring final closure to significant legal matters and help to enhance our focus on what we do best," said Amy W. Schulman, Pfizer senior vice president and general counsel.
Sidney Wolfe, director of Public Citizen's Health Research Group, said the Pfizer settlement "may sound large, but it's not enough to ensure drug companies will curb their bad behavior." Wolfe pointed out that the Pfizer agreement topped a landmark settlement set by Eli Lilly in January, when that company paid more than $500 million in criminal penalties for improper marketing of the antipsychotic drug Zyprexa. Five other major drug manufacturers logged smaller settlements over the past decade.
"The U.S. pharmaceutical industry, long one of the most profitable in the country, with profits last year of close to $50 billion, has engaged in an unprecedented amount of criminal activity in the past decade," Wolfe said. "Unfortunately, the ever-escalating fines are unlikely to stop drug companies from continuing to bribe doctors because they represent just a fraction of drug company profits and no one has gone to jail."