Pfizer Agrees to $400 Million Settlement in Class-Action Securities Lawsuit Involving Investors
The Wall Street Journal reports that Pfizer has agreed to pay $400 million to settle a class-action securities lawsuit alleging that the company illegally marketed several medications causing its investors to lose money, according to a filing with the United States Securities and Exchange Commission (SEC).
The securities lawsuit alleged that Pfizer marketed several drugs on an off-label basis between 2006 and 2009, including the following medications: the pain medication, Bextra (withdrawn from market in 2005); the antipsychotic drug, Geodon; the antibiotic, Zyvox; and the epilepsy medication, Lyrica. The lawsuit alleged that the increased sales resulting from the off-label marketing of these drugs prompted executives at Pfizer “to make false and misleading statements about Pfizer’s financial performance and sales practices [that] caused Pfizer stock to trade at artificially inflated prices.” In light of the settlement, Pfizer issued a statement reading, “Pfizer continues to believe that the company’s disclosures at issue in this matter were appropriate and prepared in good faith. This resolution reflects a desire by the company to avoid the distraction of continued litigation and focus on the needs of patients and prescribers.”
It is illegal for drug manufacturers to market drugs “off-label”, or for uses that have not been approved by the FDA. The Wall Street Journal notes that “the extent to which off-label information may be illegal has become a hot-button issue.” For example, three years ago a federal appeals court overturned the conviction of a sales representative from Jazz Pharmaceuticals, who was prosecuted for encouraging physicians to prescribe medications to patients for uses not specifically approved by the FDA. As a result, drug manufacturers have since argued that conveying such certain types of information is protected by the First Amendment. However, the FDA has been developing guidelines to address these issues and specifically provide guidance on how drug manufacturers should respond when receiving questions from physicians regarding off-label usage.
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