Pfizer to pay $325 million in Neurontin settlement

(Reuters) - Pfizer Inc has agreed to pay $325 million to resolve claims it defrauded insurers and other healthcare benefit providers by marketing Neurontin for unapproved uses, its second settlement over the epilepsy drug in six weeks.

The Pfizer logo is seen at their world headquarters in New York April 28, 2014.REUTERS/Andrew Kelly

The preliminary accord was disclosed on Friday in U.S. District Court in Boston.

It resolves allegations in a decade-old civil lawsuit that Pfizer and its Warner-Lambert Co unit sold Neurontin for uses for which it was neither approved by the U.S. Food and Drug Administration nor medically effective, in an effort to boost profit.

The plaintiffs included third-party payers that said they bought or reimbursed patients for the purchase of Neurontin from the defendants, or bought gabapentin, the chemical name for Neurontin, from Pfizer’s Greenstone LLC generic drug unit. Pfizer’s settlement also resolves claims under state antitrust laws.

In a statement, New York-based Pfizer said it did not admit wrongdoing as part of the settlement. The settlement requires approval by Chief Judge Patti Saris of the Boston court.

Several law firms represent the plaintiffs and plan to seek attorney’s fees of as much as one-third of the settlement amount, court papers show.

On April 21, Pfizer agreed to pay $190 million to settle separate litigation in a federal court in New Jersey in which Neurontin purchasers accused it of taking steps to keep cheaper generic versions of the drug off the market.

In May 2004, Pfizer agreed to pay $430 million and to plead guilty to criminal charges for illegally marketing Neurontin for unapproved uses such as migraine headaches and pain.

Pfizer obtained Neurontin when it bought Warner-Lambert in 2000.

The case is: In re Neurontin Marketing, Sales Practices, and Products Liability Litigation, U.S. District Court, District of Massachusetts, Nos. MDL 1629, 04-10981.

Reporting by Jonathan Stempel in New York; Editing by Jonathan Oatis