Pharmaceutical giant Pfizer recently agreed to pay $400 million to settle claims that it illegally marketed drugs for off-label usages. Investors claim that because Pfizer offered misleading information, stock prices were inflated and a large investor class was led to act against its best interests.
In 2010, shareholders filed suit against Pfizer marketing some of its drugs for their off-label uses. These drugs included Bextra, a painkiller that was later pulled from the market, and Lyrica, which is used to treat epilepsy.
It should be noted that while doctors are permitted to tell patients about off-label drug uses and even prescribe drugs for their off-label uses, it is illegal for pharmaceutical companies to market any off-label benefits.
In addition to the illegal marketing practices, Pfizer was accused of misleading investors about whether or not any illegal activities had been performed. The company allegedly misled investors about its own practices, and about ongoing government investigations into those illegal practices.
Pfizer offered a $2.3 billion settlement for the 2010 lawsuit. This settlement was disclosed to investors at the same time that news was breaking about Pfizer’s purchase of Wyeth; investors allege that the disclosure was overshadowed and was not given proper attention, thus misleading the investors and resulting in poor investors.
Pfizer spokeswoman Christine Regan Lindenbloom maintained that Pfizer admitted no fault in this lawsuit.
“Pfizer continues to believe that the company’s disclosures at issue in this matter were appropriate and prepared in good faith,” and the company offers this settlement in order to “avoid the distraction of continued litigation and focus on the needs of patients and physicians.”
Since the 2010 lawsuit, the FDA has been looking into developing guidelines on how pharmaceutical companies should deal with unsolicited requests from doctors to market drugs off-label.
Photo Credit: digitalbob8
Shayna Keyles has been keeping the world informed on the latest in law and litigation financing with RD Legal Funding, LLC since 2012. She offers writing and content marketing tips at her website, www.contentliaison.com, and tweets at twitter.com/skliaison.