Is $2.3 billion enough to get the attention of the pharmaceutical industry? You would think, but the fact that Pfizer agreed to pay that much to settle things with government suggests the amount of money that is on the line in the industry. Pfizer will pay the money and go back to business.
Of course, Pfizer's assent also suggests the strength of the government's case and the potential it held for even more severe punishment. As it is, the company pleaded guilty to a felony relating to illegal marketing of the anti-inflammatory drug Bextra. The company was recommending uses other than those approved by the Food and Drug Administration and higher doses, as well. Two former sales managers also pleaded guilty.
The company ran a sophisticated scheme to push its products. Tactics included inviting doctors to consultant meetings at resort locations, paying their expenses and providing perks such as massages and golf. Sales representatives created phony doctor requests for medical information, thus allowing them to reply with unsolicited information about unapproved uses and dosages.
This is the fourth time in a decade the company has settled such charges. Indeed, a prosecutor said that even as Pfizer was negotiating deals on past misconduct, it was committing the same violations with other products. That's recidivism on steroids.
Pfizer's intractable behavior has been so egregious that, as part of the agreement, the Department of Health and Human Service's inspector general will monitor the company's conduct for the next five years. That's a good start, but with so many offenses, this is clearly a matter of corporate culture and without a commitment to change direction, five years may not be enough.
But perhaps it's enough to get the attention of the industry. Not only is criminal behavior undesirable in the pharmaceutical industry, it is counterproductive as the country tries to come to grips with the burgeoning costs of health care. With $2.3 billion out Pfizer's window -- $1.3 billion in fines and forfeiture plus another $1 billion to federal and state authorities to resolve civil allegations of improper marketing -- it should be clear that under the Obama administration, the Justice Department takes these offenses seriously.
Even still, Washington will be wise to watch Pfizer for many more years than five. Some people never learn.