Pfizer Resolves Federal Marketing Allegations for $491 Million

Pfizer has agreed to pay $490.9 million to resolve allegations of improper marketing of kidney transplant drug Rapamune, according to the U.S. Department of Justice. Rapamune was approved by the U.S. Food and Drug Administration in 1999 for use in kidney transplant patients.

The allegations maintain that Wyeth Pharmaceuticals, which was acquired by Pfizer in 2009, promoted use of Rapamune for "off-label" uses other than kidney transplants. Wyeth was accused of training its sales force to market the drug for unapproved types of transplants and providing financial incentives for sales made for these unapproved uses.

Under terms of its agreement with the Department of Justice, Wyeth pleaded guilty to a criminal charge under the Federal Food, Drug and Cosmetic Act for misbranding Rapamune. This plea requires the company to pay a fine of $157.58 million and forfeit assets of $76 million.


Wyeth will also resolve civil liability with federal and state governments by paying $257.4 million. This civil liability stemmed from allegations that Wyeth violated the False Claims Act from 1998 through 2009 by submitting claims to Medicare, Medicaid, and other federal health care programs for uses of Rapamune that were not approved. The pharmaceutical company will pay approximately $230.1 million to the federal government and $27.3 million to the states.

The Rapamune case stemmed from a whistleblowing ex-Wyeth sales rep.

Pfizer noted in a statement quoted by some media outlets that it "was not a subject or target of this matter, and cooperated fully with the government from the time it learned of this investigation in October 2009."

-- Material from The Associated Press was used in this report.

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The article Pfizer Resolves Federal Marketing Allegations for $491 Million originally appeared on Fool.com.

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