Friday, March 26, 2010

Health Care: Pfizer Found Liable in Civil RICO Case

Yesterday was quite newsworthy the U.S. District Court in Boston. (See blog entry below about the identity theft sentencing.) In a case before the court a jury found Pfizer, Inc., liable for the violation of federal racketeering law by improperly marketing its epilepsy drug Neurontin for off-label uses. The jury awarded the plaintiffs, Kaiser Foundation Hospitals and the Kaiser Foundation Health Plan, $47 million. Civil RICO (Racketeer Influenced and Corrupt Organizations) provides for the awarding of triple damages. Thus, the jury's award is increased to a judgment of $141 million.

Off-label uses of a drug are its prescription for medical purposes not approved by the Food and Drug Administration. Pfizer marketed Neurontin not only for the treatment of epilepsy, the FDA approved use, but the company also marketed Neurontin for the treatment of migraine headaches, pain, and bipolar disorders. While physicians are free to prescribe drugs for off-label uses, drug companies may only market their products for the uses approved by the FDA.

To succeed on a claimed RICO violation the plaintiffs must prove the existence of an enterprise, which engaged in racketeering activity two or more times in a ten year period, thus establishing a pattern of racketeering activity. In this case Pfizer itself, or at least its division marketing Neurontin, would be the enterprise. The racketeering activity would be the fraudulent marketing of the drug for off-label uses, in essence a mail fraud or wire fraud. Finally, the pattern of racketeering activity would be the repeated marketing of the drug for off-label uses.

Pfizer has stated its intention to appeal the verdict. Previously, in 2004 Pfizer had pleaded guilty to a criminal charge for its promotion of off-label uses for Neurontin and paid a fine of $430 million to the federal and state governments. Pfizer believes that the court erred in allowing evidence of the criminal conviction to come before the jury and has stated its intention to base the appeal on this alleged error.

For more about the Pfizer case please see Forexyard, "US Jury's Neurontin Ruling to Cost Pfizer $141 Mln," March 26, 2010,

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