Mar 10, 2004 : 7:29 pm ET
NEW YORK -- Pfizer Inc. said in a regulatory filing on Wednesday that the Justice Department was investigating its sales and marketing practices for two drugs, along with certain management care payments.
Pfizer said the drugs under investigation were human growth hormone Genotropin and arthritis medication Bextra. Pfizer wouldn't comment beyond its 10K filing with the Securities and Exchange Commission. The Justice Department also declined to comment.
The New York-based company had previously disclosed the Justice Department was investigating the price of cholesterol drug Lipitor to see if Medicaid was entitled to further company discounts from 1998 to 2001. Also several state attorneys general are investigating the company's promotion of its epilepsy drug Neurontin. Pfizer said it working to settle the Neurontin investigations and took a $427 million charge last year to resolve the issue.
Nearly all major drug companies have disclosed that various state and federal agencies are examining their pricing and marketing practices.
"It seems the Justice Department is trying to extract a pound of flesh from all these companies," Prudential analyst Tim Anderson said. He said it was likely that many of the companies would end up paying fines to settle charges.
"Even a billion dollars is marginal for these companies," Anderson said.
He said the industry addressed the various investigations by adopting new marketing guidelines last year, prohibiting the once widespread practice of drug companies funding lavish trips for doctors and buying them expensive gifts.
Other controversial practices, such as promoting drugs for non-approved uses, aren't as obvious, he said.
"You wouldn't know if companies are promoting off-label uses," Anderson said. "The change in marketing has been with more visible things."
Most of the investigations likely involved past practices, he said.
Pfizer shares fell 93 cents, or 2.5 percent, to close at $36.37 Wednesday on the New York Stock Exchange. They lost another 26 cents in the extended session.
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