340B Providers Left Out of $2.3B Pfizer Settlement

by admin | September 9, 2009 3:37 pm

September 9, 2009 – After being awarded damages in a string of high-profile health fraud settlements, 340B participants were side-stepped in Pfizer’s record deal with the federal government – a signal that Public Health Service (PHS) providers cannot count on being included in legal settlements involving off-label use of drugs.

Indeed, unlike cases that involved violations of the “best price” law, it’s only recently that 340B-covered entities received a share in off-label settlements.

The U.S. departments of Justice and Health and Human Services announced last week that it had reached an agreement[1] with Pfizer and one of its subsidiaries, Pharmacia & Upjohn, over the companies’ alleged illegal marketing of the painkiller Bextra and several other drugs.

The $2.3-billion settlement – the largest-ever health care fraud settlement and heftiest fine paid in U.S. history – was the latest in a string of False Claims cases the federal government has brought against drug manufacturers in recent years. This fiscal year alone, the government had already recovered nearly $1.6 billion in settlements and judgments prior to the Pfizer agreement.

340B entities and other PHS providers were listed as beneficiaries in two recent high-profile cases involving off-label marketing of drugs, including what was then a record $1.43-billion settlement with Eli Lilly[2] last winter. They were also included in a $95-million deal[3] federal prosecutors struck with Aventis in the spring over the company’s drug repackaging practices.

In both those cases, prosecutors argued that PHS providers should participate in the settlements because the companies’ illegal practices had a direct effect on such providers – either because they were overcharged for drugs, as in the Aventis case, or because they were unwittingly distributing drugs incorrectly because of off-label marketing, as in the Eli Lilly case. (See Monitor, Feb. 2009)

In the Pfizer case, however, the settlement money is limited to the U.S. Treasury, Medicaid, Medicare, several federal departments and programs such as TRICARE and the Federal Employee Health Benefits Plan – in addition to the Pfizer whistleblowers who worked with federal investigators.

John Kopchinski, a former Pfizer sales representative and lead whistleblower, was awarded $51.5 million – half of the pot going to private individuals that worked with the government to bring the case.

“I’m surprised,” said Mike Bonck, pharmacy manager at St. Joseph Medical Center in Tacoma, Wash. “These medications were utilized for 340B eligible patients, (but) it seems that those who purchased and dispensed the medications are being completely shut out of receiving any of the compensation from Pfizer. That does seem inequitable. There should be some compensation along the continuum of care”

Pfizer agreed to pay $1.3 billion in criminal fines and $1 billion to settle False Claims Act violations for allegedly marketing Bextra – a drug approved by the Food and Drug Administration to treat menstrual cramps, rheumatoid arthritis and osteoarthritis – for other uses such as acute and surgical pain and at doses above those approved by the FDA.

The marketing went on for several years even though the company knew that the risk for dangerous side-effects grew with the higher doses, the government charged. The company voluntarily withdrew Bextra in 2005 because of its risks.

As part of the settlement, Pfizer has also entered into a corporate integrity agreement with the Office of the Inspector General of the U.S. Health and Human Services. It requires the company to implement a five-year program to, among other things, conduct compliance training, run a compliance hotline, and undertake extensive compliance audits.

“We regret certain actions taken in the past, but are proud of the action we’ve taken to strengthen our internal controls and pioneer new procedures….Corporate integrity is an absolute priority for Pfizer,” said Amy Schulman, the company’s senior vice president and legal counsel.

Source URL: https://340bemployed.org/340b-providers-left-out-of-2-3b-pfizer-settlement/

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