Securities

Pfizer to Pay $400M to Settle Securities Suit Over Off-Label Marketing Scheme

 NEW YORK — (Mealey’s) Pfizer Inc. will pay $400 million to settle claims that it engaged in illegal off-label marketing and kickback schemes for certain of its products in violation of federal securities laws, according to a Securities and Exchange Commission document filed by Pfizer yesterday (Mary K. Jones v. Pfizer Inc., et al., No. 10-3864, S.D. N.Y.; See August 2010, Page 38).

According to the company’s SEC Form 8-K, Pfizer reported “higher charges for certain legal matters, primarily reflecting a $400 million charge for an agreement in principle to resolve a securities class action pending against the company in New York federal court, which is subject to court approval.”

Trial in the securities class action lawsuit had been slated to begin yesterday.

1st Amended Complaint

Shareholder Mary K. Jones filed a first amended complaint in the U.S. District Court for the Southern District of New York on behalf of all purchasers of Pfizer common stock from Jan. 19, 2006, to Jan. 23, 2009.

Jones alleged that Pfizer, former CEOs Henry A. McKinnell and Jeffrey B. Kindler, Chief Financial Officer (CFO) Frank D’Amelio, former CFOs David L. Shedlarz and Alan G. Levin, Senior Vice President Ian C. Read, former Chief Medical Officer Joseph Feczko, former Vice Chairman Karen Katen, Vice President J. Patrick Kelly and former General Counsel Allen Waxman issued a series of false and misleading statements concerning the company’s illegal off-label marketing of certain of its products, including Bextra, Geodon, Lyrica and Zyvox, and the company’s payment of illegal kickbacks to physicians to promote the sale of those drugs in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5.

After Judge Alvin K. Hellerstein denied the defendants’ motion to dismiss on Aug. 10, 2011, shareholder Stichting Phillips Pensioenfonds was named lead plaintiff.

Stipulation Of Dismissal

Jones and the pension fund then entered into a stipulation of dismissal with Shedlarz, Feczko, Katen and Kelly; the remaining defendants moved for summary judgment; and Jones moved for partial summary judgment.

Jones and the pension fund are represented by Daivd A. Rosenfeld and Samuel H. Rudman of Robbins Geller Rudman & Dowd in Melville, N.Y.; Eugene Mikolyczyk, Henry Rosen, Ivy T. Ngo, Jason A. Forge, Michael J. Dowd, Ryan A. Llorens, Catherine J. Kowalewski, Danielle S. Myers, Darren J. Robbins, David C. Walton and Matthew Melamed of Robbins Geller in San Diego; Willow E. Radcliffe of Robbins Geller in San Francisco; Daniel E. Hill and Jamie J. McKey of Kendall Law Group in Dallas; and Hamilton P. Lindley of Goldfarb Branham in Dallas. 

Pfizer is represented by Joseph G. Petrosinelli, Steven M. Farina, George A. Borden and Amanda M. MacDonald of Williams & Connolly in Washington, D.C.  Waxman is represented by Ross Galin, Stuart Sarnoff and Howard Heiss of O’Melveny & Myers in New York.  Read is represented by Michael B. Carlinsky, Sheila Birnbaum and Brent D. Kuehn of Quinn Emanuel Urquhart & Sullivan in New York and Lori Alvino McGill of Quinn Emanuel in Washington.  D’Amelio is represented by Richard M. Strassberg and Daniel Roeser of Goodwin Procter in New York.  Levin is represented by Jay B. Kasner, Gary J. Hacker and Alexander C. Drylewski of Skadden, Arps, Slate, Meagher & Flom in New York.  McKinnell is represented by Scott D. Musoff of Skadden Arps in New York and Jennifer L. Spaziano and Michael S. Bailey of Skadden Arps in Washington.  Kindler is represented by James P. Rouhandeh, Charles S. Duggan, Sidney Bashago and Juliana N. Murray of Davis Polk & Wardwell in New York.

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