2010 Safety, Security and International Affairs

Sara M. Bloom and the Pfizer Case Team

Led the investigation against Pfizer for illegally marketing prescription drugs and paying kickbacks to doctors, resulting in $2.3 billion in fines and penalties, the largest health care fraud settlement in history.

For many years, the executives and sales representatives of pharmaceutical giant Pfizer engaged in a massive illegal scheme to promote four prescription drugs for unapproved uses and paid kickbacks to encourage health care providers to prescribe these and others medications.

During an intensive four-year investigation, Department of Justice (DOJ) lawyer Sara Bloom and her team of 25 agents, attorneys and analysts from across government uncovered the full scope of Pfizer’s egregious misconduct. They poured over thousands of documents, interviewed hundreds of witnesses, followed tips from whistleblowers, traced the flow of money and fought an army of corporate lawyers.

The end result of their painstaking work was an agreement by Pfizer and its subsidiary, Pharmacia & Upjohn Company Inc., to pay $2.3 billion in fines and penalties to resolve civil and criminal charges—the largest health care fraud settlement in history.

“This civil settlement and plea agreement represent yet another example of what penalties will be faced when a pharmaceutical company puts profits ahead of patient health,” said Tony West, assistant attorney general in DOJ’s Civil Division, when the settlement was announced in September 2009.

“Illegal conduct and fraud like the allegations in this case put the public health at risk, corrupt medical decisions by health care providers, and cost the government billions of dollars,” West said.

The Pfizer investigation focused on the company’s illegal marketing of four prescription drugs: Bextra, a painkiller; Geodon, an antipsychotic medication; Zyvox, an antibiotic; and Lyrica, a medication to treat nerve pain.

It is unlawful for drug companies to promote uses of medications that have not been approved for safety and effectiveness by the Food and Drug Administration (FDA). Bextra, for example, was approved in 2001 to treat arthritis, but Pfizer touted the drug as a remedy for acute and surgical pain—conditions for which it had neither been clinically tested nor received the FDA’s blessing. Bextra was withdrawn from the market in 2005 because of serious risks of heart problems and stroke.

The Justice Department said the Pfizer sales staff created sham requests from physicians asking for information about unapproved uses of its drugs, and then sent mailings to the doctors making unsubstantiated claims about the medications. Officials also said Pfizer sent doctors on all-expense paid trips to resorts and paid kickbacks to influence their decision-making.

In addition, the company’s false claims about its drugs resulted in it improperly receiving hundreds of millions of dollars in reimbursements from Medicaid and Medicare—money that had to be returned to these programs as part of the settlement agreement.

Phillip Coyne, an agent with the inspector general’s office at the Department of Health and Human Services (HHS), said Bloom was “the driving force behind investigating, developing, planning and building the case.” He said she was “relentless,” “committed to the pursuit of the truth,” and a “tremendous advocate for taxpayers, Medicare and Medicaid beneficiaries and average Americans.”

“Her ability to lead, build consensus and motivate people enabled her to overcome the largest obstacle, the sheer size of Pfizer’s defense team and the company’s seemingly unlimited resources, to support the case,” Coyne said.

Bloom, drawn to public service because she “wanted to make a difference,” said the long investigation showed that the choice of “drugs that patients were being given was influenced by money and other things given to doctors.”

She called this “a deeply offensive notion” that corrupts the marketplace and could endanger patient health. Bloom added that even physicians not taking money can be improperly influenced in subtle ways by the promotions and tactics of the drug makers.

The Pfizer settlement, while the largest, is just one of many such legal actions that have been taken against drug makers by the government. Since May 2004, seven drug companies including Pfizer, Eli Lilly and Bristol-Myers Squibb have paid a total of $7 billion in fines and penalties for promoting medicines for unapproved uses.

Bloom said she believes “this case moves the law forward in terms of demonstrating that the government will fully enforce the laws associated with these issues.” She added that that she hopes it will help change “corporate culture.”

The settlement contains a corporate integrity agreement requiring senior Pfizer executives and board members to complete annual compliance certifications and requires the company to make detailed disclosures on its Web site.

Jeremy Sternberg, an assistant U.S. attorney in Massachusetts, said Bloom did “a masterful job” coordinating the complex case and all of its moving parts and people.

“She genuinely cares about public health and safety and is committed to prosecuting cases that will ensure that,” said Sternberg. “She is tireless, bright and talented.”