When applying to sell a new drug in the US, companies must specify the intended use of the drug and at which dosages they will be sold. Pfizer ran afoul of drug law here by marketing the anti-inflammatory drug Bextra for off-label uses and at dosages the FDA refused to approve out of safety concerns.

Pfizer pulled Bextra from the market in 2005.

For this offense alone, Pfizer will pay a $1.195 billion fine, the single largest criminal fine ever served in the US for any matter, and forfeit another $105 million in revenue gathered from sales. “The size and seriousness of this resolution, including the huge criminal fine of $1.3 billion, reflect the seriousness and scope of Pfizer’s crimes,” said Mike Loucks, acting U.S. Attorney for the District of Massachusetts.

Pfizer will also pay a $1 billion civil penalty under the False Claims Act to the government for alleged kickbacks to health care providers in exchange for increased prescriptions for several drugs including Bextra, Geodon, Zyvox, and Lyrica. This civil penalty is the largest fraud settlement against a pharmaceutical company ever.

A large portion of the settlement will pay directly back into health care systems, important at a time when Medicare is underfunded and health care reform are in the news every day.  “This historic settlement will return nearly $1 billion to Medicare, Medicaid, and other government insurance programs,” said Kathleen Sebelius, Secretary of Department of Health and Human Services, “securing their future for the Americans who depend on these programs.”Pfizer

Thomas Farina, 42, of Fairport, N.Y., faces 20 years in federal prison and $250,000 in fines after he allegedly made a Pfizer sales representative delete evidence that promoted a company drug for off-label usage not approved by the Food and Drug Administration.

According to the FBI, Farina also had the sales rep. change the dates on a computer and “instructed his sales representative on how to change the clock and date setting on the computer, and then alter and re-save the documents in order to make the sanitized documents appear to have been last modified at an earlier time.”

Authorities said Pfizer has cooperated fully in the investigation.

The purchase will increase Pfizer’s revenue overnight, a much needed boost since the company has seen a 90 per cent drop in income because of the dwindling economy. The company’s 2009 forecasts are well below average, and the future didn’t look too promising before reports of the purchase.

Pfizer faces an estimated $13 billion drop in revenue starting November 2011, due to the inevitable release of generic competitors to the company’s cholesterol fighter, Lipitor.

America’s No. 1 drug maker will cut 8,000 jobs immediately, 10 per cent of its workforce. It is expected that Wyeth will cut nearly 12,000, bringing the job loss total to a whopping 20,000.

The guardian reports that with this purchase, Pfizer will now become a “one-stop shop” for vaccines and drugs for both people and animals. The deal is expected to close in the late third or early fourth quarter.

The deal will increase research capabilities for Pfizer’s labs, however the job loss is pretty astounding. The 20,000 pharmaceutical industry jobs lost will be hard to replace for those out of work. That can’t help the economy.

The deal is cash and stock, one of the health care industry’s biggest ever. Hopefully it results in something new that will help the American people.  

What would be ironic is if whatever new drug is shipped out by Pfizer goes to someone who was laid off by them. 

That would make me bitter for sure.