Pfizer's FOURTH DoJ Settlement/CIA Since 2002 -- Are There Any "Actual Consequences"?

Yes, $2.3 billion is a lot of money, but this is Pfizer's third corporate integrity agreement, and its fourth settlement of government allegations of significant wrongdoing -- in under seven years. [Schering-Plough, and thus "New" Merck, will also be subject to a similar government-imposed CIA, or corporate integrity agreement, through 2012, if memory serves -- so consdier this a post on at least one possible "shape of things to come".]

I do think it important to give government-reimbursed patients continuing access to some of Pfizer's most promising medicines. If the DoJ had insisted upon a full-government-contracting ban, or debarment -- the so-called corporate "death-penalty" -- Pfizer's drugs would have become unavailable to all government-reimbursed patients.

And that would make no sense, even as it stripped Pfizer of the profits from those sales. [I do realize that this sort of calculation is a bit like trying to capture unicorns, in yonder woods, thus the graphic-at right's underlay image (click to enlarge). . . .] That is the most-vexing problem of these situations, from the prosecutors' perspective. More on that, below the pull-quote, from LegalWeek.com:

. . . .This is Pfizer's fourth settlement with the Justice Department over illegal marketing activities since 2002, and its third corporate integrity agreement. The other agreements were similar in most respects, Morris said. But this is the first one that compels Pfizer's chief compliance officer to report to the company's chief executive, instead of the general counsel. . . .

The change is intended to eliminate conflicts of interest, and prevent Pfizer's in-house lawyers from reviewing or editing reports required by the agreement, said Lewis Morris, chief counsel for the inspector general's office. Officials at Pfizer did not respond to requests for comment.

"The lawyers tell you whether you can do something, and compliance tells you whether you should," Morris added. "We think upper management should hear both arguments."

Pfizer's historic settlement, the largest in the US for claims of off-label marketing practices, has fueled calls for changing how drug companies do business. . . .

Make no mistake -- I think moving the CCO under the CEO is a wise move -- but it might also have been a good idea to run a forensic accounting (afterall, this CIA has an independent team of consultants inside Pfizer, now monitoring various aspects of compliance with the CIA, anyway), and made a guess at Pfizer's gross margin on all products, blended, that are purchased by government payors -- and then reduced the price the government is charged for those products by an equal amount?

Next, to be fair, pass that savings directly on to the patients -- strip the profit on those sales out of Pfizer's pockets -- for say, the next three years. That would be a meaningful consequence, while still preserving access to life-saving medicine for patients.

It is at least possible that the $2.3 billion was an approximation of the profit (not sales revenue) Pfizer would have made from the government, for a period of a few years. If that was not at least one important basis for the calculation -- it ought to have been.