Blue Cross Whacks Pfizer, Pharmacia & Upjohn

MARSHALL, Texas (CN) - Blue Cross Blue Shield seeks punitive damages from Pfizer and Pharmacia & Upjohn, which already have paid more than $2 billion for pushing the drugs Bextra, Geodon and Lyrica for off-label uses. The insurer also sued four executives allegedly directed the marketing, which allegedly included kickbacks to doctors. Blue Cross claims the deceptive marketing caused it to overpay for prescription drugs.

Lead plaintiff Health Care Service Corp. sued on its own behalf and on behalf of Blue Cross Blue Shield of Illinois, Texas, New Mexico and Oklahoma.

The plaintiffs say Pfizer and Pharmacia inflated demand by pushing these drugs for off-label uses, and through false statements in advertisements: Bextra, an anti-inflammatory; Geodon, an anti-psychotic; and Lyrica, an anti-epileptic drug.

"This improper conduct caused HSCS to pay for participants' prescriptions for these drugs and often in lieu of paying for cheaper, yet equally effective, drugs," according to the complaint.

It is legal for doctors to prescribe drugs for off-label uses, but it is not legal for drug companies to promote the drugs for those purposes.

The insurer claims that the defendants "have already settled certain marketing claims brought by the U.S. federal government and at least 42 [states]."

"Pharmacia and Upjohn Inc. pleaded guilty to felony violations of the Food, Drug and Cosmetic Act for misbranding Bextra with the intent to defraud and mislead and agreed to pay a criminal fine of $1.195 billion and forfeit $109 million, for a total criminal restitution of $1.3 billion," HCSC says.

Pfizer agreed to pay $1 billion plus interest to settle civil claims brought by the federal government that it fraudulently marketed multiple drugs including Bextra, Geodon and Lyrica, HCSC says.

"HCSC has not received any compensation to date for the damages incurred because of defendants' deceptive practices," the complaint states. "HCSC now brings its claims against defendant for damages related to improper sales and marketing of these drugs."

Also sued are Rick Burch, a former senior vice president at Pfizer who planned and launched Lyrica; Jake Friedman former vice president of sales for the Powers Business Unit, which was responsible for promoting Pfizer products, including Lyrica and Geodon; Pfizer's executive director Mark Brown; and Matthew Lustig, Pfizer's former South Florida district sales manager, who distributed documents to sales agents who promoted Bextra, according to the complaint.

HCSC seeks treble damages and punitive damages - including "at least three month's advertising budget for Pfizer" - alleging fraud, deceptive trade, negligence, unjust enrichment and RICO violations.

The insurers are represented by Andrew Yung of Dallas.

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