Press Releases
MONDAY, APRIL 2, 2007
FOR IMMEDIATE RELEASE
CONTACT: SAMANTHA MARTIN
PHONE: (617) 748-3139
WWW.USDOJ.GOV/USAO/MA SAMANTHA.MARTIN@USDOJ.GOV
PRESS RELEASE
PFIZER SUBSIDIARY AGREES TO PLEAD GUILTY FOR OFFERING KICKBACK AND PAY $19.68 MILLION CRIMINAL FINE;
SECOND SUBSIDIARY AGREES TO PAY ADDITIONAL $15 MILLION PENALTY
TO RESOLVE ALLEGATIONS OF ILLEGAL PROMOTION OF
HUMAN GROWTH HORMONE
BOSTON, MA- PHARMACIA & UPJOHN COMPANY, INC., a subsidiary of Pfizer, Inc., was charged today in federal court with offering a kickback in connection with its outsourcing contract for the administration and distribution of its human growth hormone product, Genotropin. The company has agreed to plead guilty to the charge and pay a criminal fine. Additionally, another Pfizer subsidiary, PHARMACIA & UPJOHN COMPANY LLC, has entered into a Deferred Prosecution Agreement with the Government for its illegal promotion of Genotropin for such “off-label” uses as anti-aging, cosmetic use and athletic performance enhancement. As a result of the criminal plea and Deferred Prosecution Agreement, the companies will pay a total of $34.7 million.
United States Attorney Michael J. Sullivan; Joseph C. Moraski, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General in New England; and Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation in New England, announced today that PHARMACIA & UPJOHN COMPANY, INC. was charged in an Information with offering a kickback. In accordance with the plea agreement also filed today in federal court, PHARMACIA will plead guilty to a one count Information charging the offer of a kickback. To resolve this criminal charge, PHARMACIA will pay a criminal fine of $19.68 million. As a result of its criminal conviction, PHARMACIA will be excluded permanently from participation in all federal health care programs.
“The relationships between pharmaceutical companies and the pharmacy benefit managers who have so much influence over the drug choice of millions of Americans must be free of the taint of kickbacks or other illegal payments,” commented U.S. Attorney Sullivan. “It is my hope that the conduct exposed by this investigation will bring greater transparency and integrity to the dealings between pharmaceutical companies and pharmacy benefit managers.”
The Information alleges that PHARMACIA violated the Anti-Kickback Act by offering to make excess payments on a distribution contract, in the amount of $12.3 million, to a subsidiary of a pharmacy benefit manager, in the expectation of obtaining improved formulary positioning and improved formulary ancillary benefits from that pharmacy benefit manager for PHARMACIA’s drug products.
A pharmacy benefit manager, commonly referred to in the pharmaceutical industry as a “PBM,” often acts as a middleman between pharmaceutical companies and health insurers. PBMs often recommend pharmaceutical products to health plans. The list of pharmaceutical product recommendations is called a formulary. In this case, PHARMACIA offered to overpay a subsidiary of a PBM for work on a drug distribution contract in the expectation that the PBM would in turn recommend PHARMACIA’s drug products, including by means of formulary recommendations, to certain of the PBM’s clients.
In addition, the U.S. Attorney’s Office has also entered into a Deferred Prosecution Agreement with PHARMACIA & UPJOHN COMPANY LLC arising out of an investigation into the illegal promotion and distribution of PHARMACIA’s human growth hormone product Genotropin. At all times relevant to the agreement, Genotropin was FDA approved solely for treatment of children with growth failure due to inadequate secretion of endogenous growth hormone, and other growth-related diseases such as long-term replacement therapy in adults with growth hormone deficiency; treatment of pediatric patients with Prader-Willi Syndrome; and long term treatment of growth failure in children born small for gestational age who fail to manifest catch-up growth by two years of age.
According to the Deferred Prosecution Agreement, and as more fully set forth in the Information attached to that agreement as Appendix A, PHARMACIA engaged in the unlawful promotion of Genotropin for so-called “off-label” uses, (i.e. uses that had not been FDA approved). PHARMACIA promoted Genotropin for such off-label purposes as anti-aging, cosmetic use and athletic performance enhancement. Under the terms of the Agreement, PHARMACIA has accepted responsibility for its conduct, has instituted specific training mechanisms to prevent this conduct in the future, will pay a monetary penalty of $15 million, and will cooperate in ongoing growth hormone distribution and promotion investigations.
The Deferred Prosecution Agreement is for a term of 36 months, meaning that if PHARMACIA complies with its obligations under the agreement for its full term, the United States will not prosecute PHARMACIA in connection with the off-label promotion of Genotropin by filing the Information that is attached to the Agreement or bringing any other related charges.
“It is important for the public to recognize that growth hormone has not been shown to be safe and effective for anti-aging, cosmetic or athletic uses, and it must not be promoted for such uses,” remarked U.S. Attorney Sullivan. Sullivan noted that Pfizer, which acquired PHARMACIA in April 2003, acted responsibly when it self-disclosed to various federal government agencies, in May 2003, PHARMACIA’s unlawful promotion of human growth hormone.
The case was investigated by the U.S. Attorney’s Office for the District of Massachusetts, the Department of Health & Human Services, Office of the Inspector General, and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorneys Jeremy Sternberg and Susan Winkler of Sullivan’s Health Care Fraud Unit. Also assisting in this matter was Auditor Patrick Hegarty of the U.S. Attorney’s Office.
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