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The drug giant Pfizer avoided prosecution for unsafe practices because US authorities feared the company would have collapsed.

Pfizer lofgo, Us Dollars, US flag montagePfizer, one of the world’s largest drug companies, was found to be marketing the painkiller Bextra for use in circumstances which were unsafe and at twice the safe dosage. Nearly half of the profits from Bextra were a result of prescriptions for uses the U.S. Food and Drug Administration had rejected as unsafe.

But the authorities were unable to prosecute Pfizer because any company convicted of a major health care fraud is automatically excluded from Medicare and Medicaid.

“Convicting Pfizer on Bextra would prevent the company from billing federal health programs for any of its products. It would be a corporate death sentence,” CNN reports. “Just as the giant banks on Wall Street were deemed too big to fail, Pfizer was considered too big to nail.”

Income and profits of the largest drug companies

Income and profits of the largest drug companies

Source: http://money.cnn.com/magazines/fortune/global500/2009/industries/21/index.html

Instead prosecutors charged a Pfizer subsidiary, Pharmacia & Upjohn Co. Inc. But this company was the last in a chain of companies owned by Pfizer. Pfizer Inc. owns Pharmacia Corp., which owns Pharmacia & Upjohn LLC, which owns Pharmacia & Upjohn Co. LLC, which in turn owns Pharmacia & Upjohn Co. Inc. As CNN put it, the company appears to exist only to own up when Pfizer is prosecuted.

Pfizer had to pay a $1.2 billion fine, but it made $1.7 billion profits from Bextra. It also paid a further $1 billion to settle civil suits based on allegations that it illegally promoted twelve other drugs, though the company denied any wrongdoing. It is estimated that overall Pfizer lost the equivalent of just three months' profit.

Source CNN

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