The whistleblower is getting 50+ MILLION of it under some federal statute to encourage speaking out. Score a win for the little guy & the consumer today.

I'd be a bit less enthusiastic about this if I were some, do you really think Pfizer is just going to swallow this fine?

Expect the cost of their various products to increase, this is one of the reasons for prescription costs going up.

Like I said in thread for the Lexapro article; fines are nice, big fines are better, but we need JAIL TIME. I'd love to see the VP of marketing for Pfizer in an orange jumpsuit for this.

The CEO may be able to plead stupidity but the chief marketing douchebag should be walking the perp walk.

Sadly, this will get whittled down to $125M after years of drawn out appeals. And in the end, it'll probably be offset by some new tax relief for building a new facility or some such B.S.

@gjones77: Maybe the drug companies shouldn't be dicks?

@gjones77:
Do you think that society gets to house & lock up rapists for free? Please advise us of your free-market-let's-include-tort-reform-while-we're-at-it pearls of wisdom.

@wvFrugan: Only thing is, because of this, the consumer will be paying more for their medicine for years :( The executives will never notice that they were fined, just raise prices to make up for it.

@bitslammer: it's a corporation no one person did this and thus jail time is not a feasible act.

However, if corporations want to be treated like individuals then there needs to be a "jail" for corporations.

My guess is that this fine was calculated with the expectation that it would be reduced dramatically through appeals and delays, which is why it is the largest fine in history. Perhaps the intended amount of financial punishment is closer to what the final expense for all this will be.

@Skankingmike:

Bull$h1t!

It was a marketing scheme so the VP of marketing should be held accountable. It's not different than the execs who knowingly gave the green light to ship tainted peanut butter. Someone booked the resorts, made the arrangements etc. It's no different than Enron or any such similar instance.

Fines only hurt the stockholders, the customers (in higher prices), and the public in general. We need personal accountability.

I say if your a CEO then the buck stops there. YOU are accountable to see that nothing like this happens on your watch. We're not talking about a few bad apples and a highly secret scheme. This went on in full view of everyone in Pfizer.

@Skankingmike: Yes but the acts of a person within a corporation can result in jail time. Just ask the Enron gang.

Also, if it was only a simple matter of raising prices to cover the costs of this fine over the coming years, why would prices not have risen already? I find it unlikely that Pfizer could find no motivation to raise prices before this fine. Why would anyone charge any less than the maximum amount possible for a product (and by maximum, I mean the amount that would yield the best sales volume to price ratio).

@MikeF74: Which is one of the reasons I hate the appeals process. A guilty party should get ONE chance to appeal, if they are still unsuccessful they hay to pay for the full amount of the original judgment.

If you don't think this goes on with other drug makers you are deluding yourselves. Off label uses can be a huge cash cow for Pharma. I have a book from 2005 that details this practice with a drug called Neurontin.

@bitslammer: Odious as it may seem, Skankingmike is right; that's just how corporate jurisprudence has evolved

When are they going to start revoking doctors' licenses? Or would that be too much like enforcing the law?

@MikeF74:This is a civil settlement, no appeals as they agreed to the amount.

@wvFrugan: good point.

@Excited_Utterance: Again BS! Look at all of the past CEO's who have been given jailtime. L. Dennis Kozlowski & Mark H. Swartz from Tyco ring a bell? Look at Angelo Mozillo, he will hopefully be dressed in the finest orange jumpsuit and flip flops.

True it's a long haul and sometimes expensive to take these guys down, but if we just roll over and say that you get a free get out of jail card for anything you do as part of a company we're screwed.

@MikeF74: The appeals process is to protect the innocent. I trust our evolved judicial system, it is fairly good at fixing things that are broken within it. Slow, perhaps.

Hasn't Pfizer been hammered over off-label marketing before, concerning the drug Neurontin (generic: gabapentin)? If so, and they'd been caught doing that, why would they have thought they could get away with it again?

It occurs to me that, while it can certainly be very profitable, marketing drugs for off-label use is the sort of crime that almost inevitably leaves a trackable record ... in the form of marketing materials, if nothing else. That makes it a rather foolish thing to do, no?

Yes, I know, greed makes idiots out of everyone, especially corporations (and sometimes, the larger the corporation, the greater the idiocy) ... I'm just making an observation.

@K-Bo: $2.3 Billion is a heck of a lot of money. And I think consumers would rather know that they're paying for a medication that is their best option, rather than a medication that was chosen for them because their doctor fondly remembers that steak dinner.

@MikeF74: The article says it's a settlement which means Pfizer consented to the amount. Presumably, they knew they were caught red handed and would have been hit a lot harder after a trial. No appeals here.

@bitslammer: It's a problem of evidence. Civil court has a much lower burden of proof and a regulatory body has even less. In a case like this it would be difficult to prove much more than people were offering doctors vague promises of kickbacks. You could probably get some lower level peons and a few mid level management put away but they need a lot to get the high ups. Now you are right that some CEOs do catch jail time, but most of the crooks in suits are still crooks in suits. And besides I know Pfisers skeletons and they have much more to answer for than this but I do not have proof so all I can do is sulk.

@K-Bo:
And conversely, since Pfizer's drugs will raise in price, hopefully people will buy less of them.

Not perfect, since I'm sure Pfizer makes some drugs that have no comparable alternatives, but it's the system we've got.

This will continue as long as there's no personal exposure. If the law was such that the officers involved personally had civil penalties and spent some time in jail, yes, there would be fewer settlements because the claims would be litigated, but all it would take is one good jail term for the company to take notice and supervise the sales people. That's one of the nice things about Sarbanes-Oxley. The CFO and the CEO take responsibility (albeit unwillingly) for the numbers they put out.

@Skankingmike: I vote we revoke their charter like they used to. Or at least suspend it. No making money, advertising or doing anything as a corporation should do the trick.

I agree. People should go to jail.

@gjones77: Yeah, you and I get to pay for this. The cost of drugs will go up for sure. Fines are important but this is obviously a conflict of interest when the government rules in favor of the government and get to keep the cash.

@wvFrugan: No, we pay for them to be locked up, and personally I believe we should be putting them to hard labor to save the states money in other areas, but that's neither here nor there.

The point I'm making is that yes, we should punish Pfizer for their illegal actions, but it needs to be in a reasonable manner.

I know allot of readers here enjoy beating up on big business, but keep in mind, the very computer you're typing on was created by "big business".

Yes, I do believe tort reform is needed, my fiance's uncle sells malpractice insurance here in Mass, and the average cost is $180,000 a year, and that's just for 1 doctor, so I really want you to put in perspective how all these costs are factored into health care costs, we have insurance costs, lawyer costs, settlement costs, etc...

Please, open your eyes here, our rising costs aren't just insurance related, insurance costs are a part of it, but there is also all the ambulance chasers suing at the drop of a hat for millions against a hospital, doctor, biotech company, medical device company, and "big pharma", and those costs are passed onto us, the Consumer.

So please, don't ignore a large portion of the problem since it doesn't fit your idyllic work view of the issue.

@wvFrugan: While I still think it's great Pfizer was fined for this, I don't think a monetary fine where the company can simply raise the price of their product to cover the loss now (especially when some of their products are medically necessary) can be equated to the punishment of prison time. Yes, the we end up paying for that too, but there is an actual punishment with that, as opposed to what might equate to a loan to the U.S. government/taxpayers that we'll just end up paying back over the next 5-10 years.

@willystyle: I think the best form of punishment against them would be loss of patent on the products that are involved, if the government was to make that part of the punishment of Pfizer, any any other company, that would truly deter them from breaking the law.

By taking away their patent, you're not only lowering the cost of the product by allowing competition, you're also hitting them where it hurts most, in the wallet in a way that they can't recoup by raising the cost of their product, since that they no longer hold the patent they have to compete on the open market price wise.

@gjones77: I'd rather pay for them to pay the fine than pay for them to take doctors on vacation and feed them Kobe beef and caviar in order to convince them to prescribe their pills to people for illnesses they were never intended to treat.

Or, do you not think that the costs of wining and dining the doctors was passed on to consumers?

@Nogard13: It was passed onto consumers in the higher cost of prescriptions.

Like I said previously, don't penalize them with a fine, simply take away the patent on all drugs involved, that way they can't hit us through higher cost of the drugs and will actually help lower the costs due to competition since anyone can then manufacture the drug.

@dragonfire81: yes but this isn't playing with numbers, this was a company wide policy to advertise unjustly. You cannot pinpoint a few people and most likely an outside firm did the advertising for them. So are you going to go after them too?

See how it becomes too large? Thus a fine is all they can levy against them.

@bitslammer: You do realize that a corporation as large as this will have more than a few people behind product advertising. We're talking Design Firms, freelancers, Marketing advisers, outside contractors. Their marketing budget was likely in the 100's of millions there is no way you can find a few guys who came up with this.

This isn't an inside 2 people embezzling funds.

When Pfizer launched Bextra, I was working for a party planner that did the launch. Pfizer bought out a MLB stadium for 2 nights, and turned it into a playground. It cost over $10 million.

All the marketing materials and information that was up about Bextra - all off label, nothing about what the FDA-approved use. (Not that anyone was looking at this, they were too busy recording their own CD, batting from home plate, and getting Whitey Ford to sign their baseballs.)

I posted this in a response, but I think a few may like the idea...

I think the best form of punishment against them would be loss of patent on the products that are involved, if the government was to make that part of the punishment of Pfizer, any any other company, that would truly deter them from breaking the law.

By taking away their patent, you're not only lowering the cost of the product by allowing competition, you're also hitting them where it hurts most, in the wallet in a way that they can't recoup by raising the cost of their product, since that they no longer hold the patent they have to compete on the open market price wise.

@Skankingmike:

And someone (likely the head of marketing) made the decision to engage the outside contractors, advisers, freelancers, etc., and told them what they wanted. They also would have been the ones with the approval to say yes - we like that idea -OR- no that might be crossing the boundary.

No those outside parties should not be gone after, but the person who had final approval of the budget and who signed off on the contracts should go down.

So by your thinking I can just tell an outside firm that I want to market booze and cigarettes to preschoolers and I'm off the hook? I don't' think so.

@gjones77:

I like that to some degree but as I've stated I think jail time is also a good idea. By stripping the patents you would hurt their bottom line, but you'd also hurt the stockholders; many of whom are innocent as these stocks are held in mutual fund, money markets, pension funds, etc.

I'd like to see part of the fines extracted directly from the salaries of the top level execs. That might be a good shot across the bow.

OLD NEWS.

"...the charge was revealed in Pfizer's 2008 fourth-quarter earnings report. It also was mentioned on the Wall Street Journal's blog, on 26 January 2009. Yet it just now shows up now in the mainstream press, presumably because the Department of Justice recently announced it in a press conference.

In January, there wasn't a lot of buzz about it, but now, it is the third most-emailed and eighth most-blogged NYT article.

Perhaps the current buzz is some kind of publicity stunt by the Administration. If so, it may not be having the desired effect. David Dobbs mentioned that the right-wing gossip machine is trying to spin this as proof that the Administration plans to federalize health care. Never mind that the investigation took four years to complete.

Anyway, some of the alternative medicine sites are spinning this another way. They point to this as evidence that big pharmaceutical companies are inherently corrupt."

More: [scienceblogs.com]

@bitslammer: Well, then the stock holders and board of directors would have a better reason to monitor the actions of the company.

Yes, it's going to hurt the stock holders, but at least this would help to keep the company inline and those responsible would be held accountable.

Plus, as I said, if a company knew it would lose patents on a product that is lucrative, do you think they'd be more careful about what they'd do?

@bitslammer: The real problem here is that the individual doctors who agreed to these gifts (payola) should be brought up on charges and sentenced to jail and lose their licenses.

@gjones77:

True but I have about 5 mutual fund in my 401k and I couldn't tell you if Pfizer is in one of them or not. It's not really practical for the common investor to know that.

I would not look for the board of directors to do anything because if you look at the people who make up the boards they're as bad as the execs in many cases. They seem to do well looking out for each other and turning a blind eye.

@speedwell, avatar of snark: Profit driven models for healing people? Whats the incentive to developing cures when treating is so much more lucrative.

@Skankingmike: You did read the rest of the blog post I linked to, didn't you? Please say you did.

@bitslammer: I agree, but either way the stock is going to take a beating, at least with this type of penalty hanging over their heads like "the sword of damocles" I'm sure the company would be far more prudent.

@Skankingmike:

Now THAT I can agree with you on. BOTH sides need to take the rap, but can we be sure the MD's knew this was payola or did they in good faith think it was an "educational" seminar where they could get some CPE credits?

Going after both ends of the deal would certainly make a bigger impact.

@bitslammer: It's been my understanding that all pharmaceutical companies practice paying or giving incentives to doctors to prescribe drugs.

@pecan 3.14159265: The government needs to regulate or outright ban the way drug companies play games with doctors. They bribe them on one side and track the prescriptions they write on the other. Doctors who are not prescribing their drugs enough get harassed or pressured by drug reps.

Pretty much nothing about US health care is in the patients best interest anymore.

Insurance companies play death by spreadsheet.
Hospitals and clinics are out to rake in as much cash as humanly possible and don't care if they make you better or not.
Drug companies only care about the allmighty dollar. Ever notice how none of these drugs actually cure anything? The goal is to make you have to take said drug for life. It is more profitable than curing you.