Pfizer-Allergan merger marries companies with histories of fraud

The recent merger between Pfizer and Allergan is getting plenty of attention for its $160 billion pricetag, but one healthcare attorney wonders if fraud and corruption are part of each company's "corporate DNA."

In an editorial posted to, Erica Kelton, a partner with Phillips & Cohen LLP, underscores the fact that together, the two pharmaceutical giants have paid nearly $4.5 billion to settle federal fraud allegations, along with six criminal pleas and four corporate integrity agreements dating back to 2004.

In 2009, Pfizer paid $2.3 billion for off-label marketing of an anti-inflammatory drug, Bextra. At the time, it was the largest healthcare fraud settlement in the history of the Department of Justice, largely because Pfizer's indiscretions occurred while it was negotiating another corporate integrity agreement of off-label use of Neurontin, Kelton writes.

Since then, Allergan and Pfizer have agreed to settlements ranging from $1.7 million to $491 million. In October, an Allergan subsidiary agreed to pay $125 million for paying kickbacks to physicians to prescribe certain drugs, leading to the surprising arrest of one of the company's executives.

"If nothing else, the merger of Pfizer and Allergan should be regarded as an invitation to whistleblowers around the world to continuously scrutinize the giant company's business practices," Kelton writes.

The pharmaceutical industry has a long history of paying large, multi-billion dollar settlements to evade fraud charges. Recently, however, the DOJ has altered its approach, indicating that it will target individuals entwined in corporate fraud schemes.

For more:
- read the Forbes post

Related Articles:
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Healthcare executives beware: The DOJ wants you
UPDATED: Pfizer finally gets its inversion with $160B Allergan megamerger agreement