January 28, 2009 2:00 am
Pharmaceutical companies often complain that they spend billions of dollars researching new drugs that never make it to market, but Pfizer this week broke a new record for the billions spent on settlements linked to promotion of a drug that had already been launched.
In a tiny reference in the company's fourth-quarter results issued on Monday - swamped by the news of its $68bn takeover of Wyeth - it said it had reached a $2.3bn agreement in principle" with the US Attorney's office to resolve a series of investigations "regarding allegations of off-label promotional practices concerning Bextra".
Nearly three years after the company in April 2005 withdrew from the market, on the recommendation of the US Food & Drug Administration in April 2005, the case has continued to haunt the company.
Acquired when Pfizer bought Pharmacia in a takeover completed in 2000, Bextra, a painkiller in the same Cox-2 class as Merck's Vioxx, was one of two drugs drawn to the attention of regulators and lawyers.
Their interest followed Merck's withdrawal of Vioxx in 2004 after concerns that it caused greater incidence of heart attacks than the existing widely-prescribed class of non-steroidal anti-inflammatory drugs.
Bextra had been billed as a future "blockbuster" for Pfizer, building from sales of $687m in 2003 to $1.2bn in 2004. While the company maintained Celebrex, another Cox-2 painkiller on the market, a combination of skin infections and concerns over cardiac risk pushed the FDA to urge the company to withdraw the drug.
During 2005, Pfizer reported a $73 million in direct write-offs of inventory and exit costs on Bextra, and then $1.1bn impairment write-off. It also cited a series of continuing investigations by the US Department of Justice.
Last October it unveiled an $894m package of settlement unveiled last October to cover personal injury cases, consumer fraud and claims from state attorney generals. Many claims had been brought by patients seeking compensation for alleged side effects after taking Bextra.
While Bextra offered pain relief, Pfizer came under criticism for over marketing it to many patients beyond those who would directly benefit - notably through "off label" promotion beyond the formal uses approved by the FDA. While off label prescription by doctors is perfectly legal, pharmaceutical companies are constrained in pushing such uses.
Yet critics argue that through financial support to doctors, "ghost writing" of medical articles and other techniques to push a broad range of uses of their drugs, they are able to support a greater range of prescription uses than the law allows.
The United States Attorney's Office for the District of Massachusetts maintained the lead on a series of continuing probes around how Pfizer marketed the drug. Even on Tuesday, it said it had no comment on the case and would not confirm that there was a settlement.
"We feel the resolution brings to closure these matters and enables us to focus on research and development for new medicines," a Pfizer spokesman said yesterday. "We feel compliance is a top priority."
Since Vioxx and Bextra, pharmaceutical companies in the US have begun to reduce direct-to-consumer advertising campaigns on television and in the print media, recognising that, while boosting sales, such activities have done little to boost their reputation.
Ironically, this month, the FDA further eased previous regulations. In a final liberalisation of rules characterising former President George W Bush's era, it waived the prior requirement to "pre-approve" information prepared by pharmaceutical companies to promote their drugs. Costs like those incurred by Pfizer may prove the most potent deterrant for others in the sector.
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