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Attorney General Ellen F. Rosenblum

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OREGON DEPARTMENT OF JUSTICE HELPS WIN LARGEST HEALTH CARE FRAUD SETTLEMENT IN HISTORY

September 2, 2009

The Oregon Department of Justice's Medicaid Fraud Control Unit helped lead a team that reached a $2.3 billion national settlement with Pfizer. Oregon's Medicaid program will recover $4.9 million.

Oregon Attorney General John Kroger today announced a historic $2.3 billion national settlement with the drug manufacturer Pfizer over kickback and illegal marketing accusations. The settlement is the largest health care fraud agreement ever.

"My goal is to make sure that everyone has access to affordable and safe health care," Attorney General Kroger said. "That means when drug-makers break the law, we will hold them accountable."

The case was investigated and settled by a group that included state attorneys general, U.S. Attorneys offices in Boston and Philadelphia and the U.S. Department of Justice.

The states coordinated their efforts by appointing a team of six attorneys and three analysts to investigate and conduct settlement negotiations. Ellyn Sternfield, Attorney in Charge of the Oregon Department of Justice's Medicaid Fraud Control Unit, led the team until she resigned earlier this year. Brian Koch, also of Oregon's Medicaid Fraud Control Unit, was the lead analyst. Both attended the Boston press conference today announcing the historic settlement.

The settlement included both criminal and civil charges.

The criminal case involved the illegal marketing and promotion of Bextra, an anti-inflammatory drug Pfizer pulled off the market in 2005. Because of the illegal promotion, a Pfizer subsidiary agreed to plead guilty in U.S. District Court in Boston to a felony violation of the Food, Drug, and Cosmetic Act for misbranding the drug with the intent to defraud or mislead.

Pfizer agreed to forfeit $105 million and pay a $1.195 billion criminal fine, the largest health care fine ever paid in the United States.

On the civil side of the case, Pfizer will pay state Medicaid Programs and other federally-funded health care programs $1 billion in damages and penalties for harm suffered as a result of Pfizer's alleged unlawful conduct involving a total of thirteen Pfizer products. Pfizer, the world's largest pharmaceutical manufacturer, allegedly marketed four of these drugs for uses unapproved by Food and Drug Administration. Federal law prohibits pharmaceutical manufacturers from promoting a product for an unapproved use

Pfizer is also accused of paying kickbacks to doctors to encourage them to prescribe nine of the drugs. Paying anything of value in exchange for prescribing a product or service to be reimbursed by Medicaid or Medicare also violates federal law.

The drugs involved in the settlement are Bextra, Geodon, Lyrica, Zyvox, Aricept, Celebrex, Lipitor, Norvasc, Relpax, Viagra, Zithromax, Zoloft, and Zyrtec.

As a condition of the settlement, Pfizer will enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services' Office of the Inspector General, which will monitor the company's future marketing and sales practices.

Of the $1 billion civil settlement, more than $705 million in damages and penalties will be returned to state Medicaid programs.

Fighting health care fraud is part of Attorney General Kroger's larger effort to make health care accessible and affordable. The Oregon Department of Justice has long been a national leader in cracking down on health care fraud, recovering tens of millions of dollars for Oregon consumers and the Oregon Health Plan.

The Oregon Department of Justice has some of the best attorneys, investigators and analysts in the nation. This enormous settlement is a tribute to their hard work and determination.

Attorney General John Kroger leads the Oregon Department of Justice. The Department's mission is to fight crime and fraud, protect the environment, improve child welfare, and defend the rights of all Oregonians.

Contact:

Tony Green, (503) 378-6002 tony.green@doj.state.or.us |
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