Healthy Skepticism Library item: 18440
Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.
Publication type: news
Milford P, Feeley J
Pfizer Board Liable for Marketing Miscues, Suit Says
Bloomberg Businessweek 2010 July 13
http://www.businessweek.com/news/2010-07-13/pfizer-board-liable-for-marketing-miscues-suit-says.html
Full text:
Pfizer Inc. directors should be held liable for the drugmaker’s repeated violations of federal laws governing drug-marketing practices that resulted in the company having to pay a $2.3 billion settlement, a union pension fund said in a lawsuit.
New York-based Pfizer’s board turned a blind eye to criminal guilty pleas the company entered over marketing practices for medicines such its Bextra pain-killing drug and its Neurontin epilepsy pill, the Bricklayers Local 8 & Plasters Local 233 Pension Fund, a Pfizer shareholder, said in the suit. Directors’ inaction has hurt the value of investors’ stakes in the company, the fund’s lawyers contend.
“The board and senior management made a calculated bet that the negative consequences of getting caught would never become significant,” the fund’s attorneys said today in the Delaware Chancery Court complaint. “Defendants lost that bet.”
The $2.3 billion settlement to resolve government probes into Pfizer’s marketing practices was the largest accord in history to address such sales techniques. Proceeds from the accord went to government health agencies including Medicare, Medicaid and the military’s Tricare health plan.
Chris Loder, a Pfizer spokesman, didn’t return calls and an e-mail for comment on the suit. Pfizer is the world’s biggest drugmaker.
‘Red Flags’
In addition to the $2.3 billion it paid over Bextra and other drugs, the company paid $430 million to resolve prosecutors’ claims that it illegally marketed Neurontin.
“The fact that Pfizer has been operated with a systematic disregard for the laws governing its fundamental business was not hidden from the board, which repeatedly and knowingly disregarded red flags that clearly demonstrated the company’s wrongdoing,” the fund’s lawyers said in the suit.
The fund wants directors held liable for the company’s improper acts and seek to recoup “all profits, benefits and other compensation” they reaped as board members.
The case is Bricklayers Local v. Ausiello and Pfizer Inc., CA5631, Delaware Chancery Court (Wilmington).
