Pfizer (NYSE: PFE) is being sued by a union pension fund which claims that the company’s board of directors ignored indications that the drug manufacturer was playing fast and loose with off-label marketing. The fund blames the company’s board of directors, at least in part, for a record-setting $2.3 billion marketing settlement recently reached with the DOJ.
“The fact that Pfizer has been operated with a systematic disregard for the laws governing its fundamental business was not hidden from the board,” said the suit, “which repeatedly and knowingly disregarded red flags that clearly demonstrated the company’s wrongdoing.” The lawsuit asks Pfizer to hold the company’s board of directors liable for the company’s misdeeds and aims to collect “all profits, benefits and other compensation” they received as board members.
The term “off-label marketing” refers to the process of prescription drug marketers pitching drugs to doctors and hospitals to cure specific ailments which the drug being marketed has not been approved by the FDA to treat.
Pfizer is not alone in settling claims related to off-label marketing claims and it appears that the problem may be more of an more industry-wide issue than first expected. Recently, a U.S. attorney in Philadelphia went so far to write an op-ed scolding drug manufacturers for their marketing infractions and promised that more enforcement would come if they didn’t change their ways.
To date, the settlements have been a small fraction of Pfizer’s revenue and some say that fines from the government and restitution are not enough of a deterrent to drug companies.
