Attorney General Thurbert Baker announced today that Georgia and the National Association of Medicaid Fraud Control Units (NAMFCU) have reached a nationwide agreement-in-principal with Parke-Davis, a division of Warner-Lambert, (now Pfizer- the largest pharmaceutical manufacturer in the world). Warner-Lambert will pay $152 million dollars in damages and penalties to state Medicaid programs around the country to resolve allegations of illegal off-label marketing of Neurontin. As part of that settlement, the Georgia will recover $3,822,998.55 in Medicaid restitution and penalties.

In addition, to the Medicaid fraud settlement, Warner-Lambert entered into an Assurance of Voluntary Compliance which includes remediation efforts that will benefit all consumers, including the Medicaid programs. These state settlements were reached in conjunction with a federal settlement negotiated by the United States Attorney’s Office (D.MA.) in which Warner-Lambert pled guilty in the United States District Court in Boston of violating the Food, Drug and Cosmetics Act (FDCA) and paid a fine of $240 million dollars. This case sends a strong message to the pharmaceutical industry that off-label marketing of pharmaceuticals is not only unacceptable but criminal and will be prosecuted aggressively by the government. Attorney General Baker indicated that more off-label marketing cases may be forthcoming.

The global federal and state settlement, totaling $430 million dollars, is a result of a 1996 False Claims Act (FCA) qui tam action filed in Boston by a former Warner-Lambert employee, David Franklin, alleging that the company engaged in a massive off-label marketing scheme to promote the epilepsy drug, Neurontin. At that time, Neurontin was FDA approved only as an adjunctive therapy epilepsy drug, a drug that should only be prescribed in combination with another drug to treat epilepsy.

Although it may be appropriate for physicians to prescribe drugs for off-label uses, it is illegal for pharmaceutical manufacturers to promote the off-label use of their drugs. Warner-Lambert subsidized the production and dissemination of anecdotal reports promoting Neurontin for off-label uses including pain management and to treat bipolar disorder, restless leg syndrome, alcohol/drug withdrawal and migraines. In addition, Warner-Lambert made payments to physicians for “research” that the government contended was in effect, a kickback for off-label prescribing and provided expensive perks to physicians who attended and/or spoke at the continuing medical education (CME) classes where Neurontin was promoted for off-label uses. This off-label marketing campaign, aimed at tainting the information stream to physicians and ultimately consumers, resulted in inappropriate, unnecessary and/or ineffective prescriptions for Neurontin which was paid for by the Medicaid program. Approximately 90% of Neurontin usage is for off-label purposes.

As a part of the settlement, Warner-Lambert entered into a Corporate Integrity Agreement (CIA) requiring strict scrutiny of its future marketing and sales practices. The CIA will be available on the website for the Office of the Inspector General in the Department of Health & Human Services (www.oig.hhs.gov).