This settlement adds to the already record-breaking year in Medicaid fraud recovery for Missouri. The previous record was $33 million in 2008, but with Pfizer settlement, the 2009 total is now over $75 million.
The settlement comes after an investigation done by the Department of Justice along with Missouri and 42 other states.
In a press release by attorney general's office, the investigation came about because Pfizer and its subsidiaries illegally marketed drugs that the Food and Drug Administration had not approved for certain uses. As a result of the investigation, Pfizer will pay the federal and state governments $1 billion in civil damages to compensate Medicaid and Medicare for damages done as a result of the products.
Deputy Attorney General Joe Dandurand said that Missouri was eligible for their portion of the settlement because of a formula based on effort by the state and money spent per capita on the drugs. Dandurand said that the $22 million will go back to the state government's general treasury.
Pfizer said in a press release that the company denied all of these civil allegations, except for certain improper actions related to the promotion of Zyvox, a drug that treats bacterial infections. But Pharmacia & Upjohn Company Inc., a subsidiary of Pfizer, pleaded guilty for misbranding Bextra, an anti-inflammatory drug, with the intent to defraud or mislead. As a result of those charges, Pfizer paid a $1.3 billion fine.
Chris Loder of Pfizer said in response to the settlement, "We believe that these bring final closure to serious legal matters and helps us enhance what we do best which is discovering, developing and delivering innovative medicines. "