Pfizer’s Pfizer to pay $5.5 billion to settle $2.3 billion drug-price scandal

By LIZ MURPHYAPLICK and JONATHAN BONNERNew York — Pfizer Inc., the world’s largest drugmaker, is to pay a record $5 billion settlement to settle federal drug-related charges.

The agreement also gives the company a chance to move forward with its plan to exit the United States.

Pfizer said it would pay a $2 billion lump sum to be paid out over 10 years to affected parties and $2 million to each of the first 4,500 employees affected by the scandal.

The settlement is part of a broader deal with the government.

The settlement includes $2,500 each for employees who received prescriptions from Pfizer and a $5 million payout for employees of the company’s largest U.S. subsidiary.

The company also agreed to pay more than $250 million in penalties, including $30 million for Medicare fraud, $25 million for falsifying information, and $50 million for false claims for the marketing of its drug Humira.

The $5-billion settlement also includes a $250-million payment for any employees who were misled by Pfizer, including its own marketing department.

It also includes $25-million for any employee who was harmed by Pfizers marketing of the antibiotic rifampin.

Purdue Pharma, which is based in Indianapolis, Indiana, is also expected to pay at least $1 billion for any future sales of its drugs.

Pending the settlement, the two companies agreed to stop all advertising and marketing of each other’s drugs.

Under the deal, Pfizer must pay $1.1 billion in penalties and $700 million in civil penalties.

The company also will pay $700,000 for each employee who has a complaint regarding improper sales practices by the former CEO, Jeffrey Novak.

Pursuant to the settlement and to its terms of the consent decree, Pfizers stock price will rise by 25 percent.


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