Wyeth Pharmaceuticals Consents to Pay $491 Million to Settle False Claims Act Charges

August 23, 2013 — Pharmaceutical companies are required under the federal Food, Drug, and Cosmetic Act (FDCA) to specify the intended uses for their medications at the time they seek approval for the drugs from the U.S. Food and Drug Administration (FDA). It is illegal to sell or market drugs in interstate commerce for “off-label” uses — those that the FDA has not specifically approved. In addition, federal healthcare programs do not reimburse for pharmaceuticals prescribed for off-label uses. Accordingly, it violates the False Claims Act to submit a reimbursement claim to Medicare for prescribing a drug that was used for unapproved purposes.

Wyeth Settles False Claims Act Allegations Involving Rapamune

Wyeth Pharmaceuticals Inc., now a subsidiary of Pfizer Inc., has agreed to pay $491 million to settle criminal charges involving misbranded pharmaceuticals and civil allegations that the company sold its Rapamune drug for uses not approved by the U.S. Food and Drug Administration (FDA).

According to the DOJ, Pfizer has a history of misbranding medications and instructing its salespeople to sell the drugs for uses not approved by the FDA. In 2009, Pfizer pleaded guilty to allegations that it told its sales force to offer the drugs Bextra, Geodon, Zyvox, and Lyrica for unapproved uses, and paid the government $2.3 billion to settle criminal and False Claims Act allegations. Pfizer’s settlement was the largest False Claims Act settlement to that date. The whistleblowers were collectively paid over $100 million for their efforts in helping the government recover its money.

Wyeth’s Rapamune drug was approved by the FDA for use during kidney transplants. The DOJ alleged that even though Rapamune was solely approved for use with renal transplants, Wyeth urged its national sales force to promote the drug for all types of transplant surgeries. Training material was even provided to support that effort. Wyeth also created commissions and bonuses for its sales team to sell Rapamune for uses not approved by the FDA, according to the DOJ.

Wyeth pleaded guilty to the criminal and civil allegations and agreed to pay a criminal fine of $234 million and a civil fine of $257 million, for a total of $491 million. The case would not have been possible without the efforts of the whistleblowers who initially brought the claims — two former Wyeth salespeople and a pharmacist. The False Claims Act provides for an award to whistleblowers of 15 to 25 percent of the amount recovered, or as much as $257 million in this case. The specific amounts to be paid to these whistleblowers have not yet been determined.

Company Insiders Use False Claims Act to Stop Medicare Fraud

Pharmaceutical company employees and health care insiders play a critical role in the fight against illegal off-label pharmaceutical use, which endangers patients’ health and defrauds federal healthcare programs. Informants who are considering a collaboration with the government deserve to understand the False Claims Act and the rights it provides. The whistleblower lawyers at Waters & Kraus are here to explain the Act’s qui tam provisions to you. Contact us by email or call our qui tam attorneys at 855.784.0268 to learn more about what we can do to advance your interests.

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