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The massive U.S.-based international pharmaceutical company Pfizer, until very recently, held the record for the largest criminal and civil penalty ever paid by any drug company for violating laws concerning illegal promotion of drugs for unapproved uses and overcharging the U.S. government for drugs purchased through federal programs such as Medicaid. The Pfizer record — $2.3 billion, paid in September 2009 — was recently eclipsed by $3 billion in criminal and civil penalties paid by...
The massive U.S.-based international pharmaceutical company Pfizer, until very recently, held the record for the largest criminal and civil penalty ever paid by any drug company for violating laws concerning illegal promotion of drugs for unapproved uses and overcharging the U.S. government for drugs purchased through federal programs such as Medicaid. The Pfizer record — $2.3 billion, paid in September 2009 — was recently eclipsed by $3 billion in criminal and civil penalties paid by GlaxoSmithKline this July for many of the same kinds of illegal activities.
But Pfizer has not neglected its illegal money-making activities in other parts of the world. In an agreement with the U.S. Department of Justice (DOJ), announced Aug. 7, 2012, Pfizer H.C.P., a wholly owned subsidiary of Pfizer, was penalized $15 million for paying more than $2 million in bribes to government officials in Bulgaria, Croatia, Kazakhstan and Russia — actions in violation of the Foreign Corrupt Practices Act (FCPA, which bars publicly traded companies from bribing officials in other countries to get or retain business). The company’s profits from this activity amounted to more than $7 million.
Pfizer paid an additional $45 million to settle other similar FCPA violations. Countries in which those illegal activities occurred included China and Italy.
“Corrupt pay-offs to foreign officials in order to secure lucrative contracts creates an inherently uneven marketplace and puts honest companies at a disadvantage,” said FBI Assistant Director James McJunkin in the DOJ statement. “Those that attempt to make these illegal backroom deals to influence contract procurement can expect to be investigated by the FBI and appropriately held responsible for their actions.”
Hospital administrators, members of regulatory and purchasing committees and other health care professionals were among those who benefited from Pfizer’s payouts. The modes of Pfizer’s influence peddling included sham consulting contracts, exclusive distributorships, and improper travel and cash payments.
Not content with record-setting violations of laws in this country, Pfizer and other pharmaceutical companies also attempt to illegally influence officials in other countries to push more sales of their drugs.
This lawlessness will stop only if it is no longer considered an acceptable part of companies’ business models — in the sense that they usually come out ahead financially, even with the penalties, and that it is rare, if it ever occurs, that company officials are jailed for their criminal activities. The need for change is clear.
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