Pfizer Faced with $2.3 Billion Penalty

Global pharmaceutical manufacturer Pfizer has incurred a 2.3 billion dollar fine in conjunction with illegal drug promotions.

Pfizer is the world's largest manufacturer of prescription drug products. The U.S. Justice Department has levied the fine against Pfizer based on the allegations that the pharmaceutical giant had marketed its pain reliever Bextra, and possibly other products, for medical conditions other than its approved use.

The U.S. Justice Department is scheduling a news conference later in the day (9/2/09) regarding this matter.

Pfizer is based in New York City and is ranked number one in the world for pharmaceutical sales. In January of 2009, Pfizer acquired Wyeth, also a major player in the pharmaceutical world, for $68 billion (U.S. dollars). The company was founded in 1849 and has risen to become the world's premiere pharmaceutical giant.

Pfizer employs over 86,000 people worldwide and had revenue of $48 billion in 2008.

The current allegations against Pfizer pose a threat to the current stock value of the company. As of September 2nd, Pfizer stock is valued at $16.47 per share. Depending on the findings, the public might lose their confidence in the company and Pfizer's stock value may take a hit. Those invested in the company should continue to watch this developing situation.

The United States pharmaceutical industry is highly regulated. Unlike other industries, drug companies need to comply with the Food and Drug Administration, on top of the other federal regulatory agencies with which all businesses must comply. Pfizer's noncompliance might have been discovered during an FDA audit, but this will not be known until the U.S. Justice Department tells the public what is happening with this particular case.

Pharmaceutical companies, such as Pfizer, hold a major responsibility to the public in the fact that the products they produce are ingested and can affect human physiology. As such, these businesses are held under tight scrutiny. The Food and Drug Administration can, and does, conduct audits on the companies to ensure safety for the American public. If a company is found to be out of compliance with federal regulations, they may be given a chance to rectify the situation. Other courses of action, albeit for grave offenses, are for either a product to be recalled or the company to cease production all together.

More details will emerge later this afternoon, as the U.S. Justice Department will hold a news conference regarding this matter. For now, not much else can be reported because the court filings in the case are still under seal.