Pfizer pay-out shows compliance is needed

October 15, 2009

Pfizer's $2.3 billion civil and criminal penalty over off-label promotions, shows that the federal government is serious about compliance in the health industry

Pfizer’s $2.3 billion civil and criminal penalty over off-label promotions, shows that the federal government is serious about compliance in the health industry, say experts.

The overall settlement is the largest ever paid by a drug company for alleged violations of federal drug rules.

“Consider that reducing fraud, abuse and waste in healthcare will save the health system-including government and taxpayers-billions and prosecuting fraud, abuse and waste collects billions for the government. That’s a double ‘win’ for taxpayers, so it’s popular with all politicians,” says Kathy Roe, a partner in the Health Law Consultancy in Chicago.

Jack Rovner, who is also a partner, advises executives to take compliance seriously.

“Real compliance takes time, investment of resources, and the absolute commitment of the most senior management to values,” Rovner says. “To find the evidence of a company’s commitment to compliance, look in the budget. For example, it would be informative to compare Pfizer’s investment in marketing versus its investment in compliance.”

Both Roe and Rovner agree that compliance is not just about following the law; it’s about doing the right thing.

“Sports like football have rules, but sportsmanship is much more than merely following those rules,” Roe explains.

There is ever-increasing danger in pushing against the “gray” inherent in any set of rules to increase sales with ethically-if not legally- doubtful tactics, according to Rovner.

“Both whistleblowers and government prosecutors have 2.3 billion reasons to keep a sharp-eye on pharma and, indeed, on all health industry participants,” he says.