Pfizer 2010 Annual Report Download - page 111

Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
Trimegestone
Aventis filed a breach of contract action against Wyeth in the Commercial Court of Nanterre in France arising out of the December
2003 termination by Wyeth of an October 2000 agreement between Wyeth and Aventis relating to the development of hormone-
therapy drugs utilizing Aventis’s trimegestone (TMG) progestin. Aventis alleges that the termination was improper and seeks
monetary damages. In 2009, a three-judge tribunal rendered its decision in favor of Wyeth. In May 2010, the Versailles Court of
Appeals reversed the Commercial Court’s decision and appointed experts to hear evidence and make a recommendation to the
Court of Appeals concerning damages. In August 2010, Wyeth filed a notice of appeal of the Court of Appeals’ decision with the
Supreme Court of France. Notwithstanding the appeal, the damage proceeding by the experts appointed by the Court of Appeals is
continuing.
Environmental Matters
•Remediation Matters
In 2009, we submitted to the U.S. Environmental Protection Agency (EPA) a corrective measures study report with regard to
Pharmacia Corporation's discontinued industrial chemical facility in North Haven, Connecticut and a revised site-wide feasibility
study with regard to Wyeth’s discontinued industrial chemical facility in Bound Brook, New Jersey. In September 2010, our
corrective measures study report with regard to the North Haven facility was approved by the EPA.
We are a party to a number of other proceedings brought under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended (CERCLA or Superfund), and other state, local or foreign laws in which the primary relief sought is
the cost of past and/or future remediation.
•MPA Matter
In 2006, the Irish Director of Public Prosecutions (DPP) served Wyeth’s subsidiary, Wyeth Medica Ireland (WMI), with criminal
summonses charging it with violations of the Ireland Waste Management Act and WMI’s Integrated Pollution Prevention and Control
License in connection with five shipments from WMI’s Newbridge, Ireland facility of sugar waste water allegedly contaminated with
medroxyprogesterone acetate (MPA). In June 2010, WMI entered into a plea agreement with the DPP concerning four deviations
from waste-management requirements between September 2000 and November 2001. In October 2010, WMI agreed to pay 70,000
euros to the DPP toward the cost of the prosecution of this matter and was ordered to pay a fine of 40,000 euros. In November
2010, the DPP filed a notice of appeal seeking review of the amount of the fine. On January 31, 2011, the DPP withdrew its appeal
in exchange for the payment by WMI of 150,000 euros to cover the Ireland Environmental Protection Agency’s costs to investigate
this matter.
D. Government Investigations
Like other pharmaceutical companies, we are subject to extensive regulation by national, state and local government agencies in the
U.S. and in the other countries in which we operate. As a result, we have interactions with government agencies on an ongoing
basis. Among the investigations by government agencies are those discussed below. It is possible that criminal charges and
substantial fines and/or civil penalties could result from government investigations, including but not limited to those discussed
below.
The Company has voluntarily provided the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission
(SEC) with information concerning potentially improper payments made by Pfizer and by Wyeth in connection with certain sales
activities outside the U.S. We are in discussions with the DOJ and SEC regarding a resolution of these matters. In addition, certain
potentially improper payments and other matters are the subject of investigations by government authorities in certain foreign
countries, including a civil and criminal investigation in Germany with respect to certain tax matters relating to a wholly owned
subsidiary of Pfizer.
The DOJ is conducting civil and criminal investigations regarding Wyeth’s promotional practices with respect to Protonix and its
practices relating to the pricing for Protonix for Medicaid rebate purposes. In connection with the pricing investigation, in 2009, the
DOJ filed a civil complaint in intervention in two qui tam actions that had been filed under seal in the U.S. District Court for the
District of Massachusetts. The complaint alleges that Wyeth’s practices relating to the pricing for Protonix for Medicaid rebate
purposes between 2001 and 2006 violated the Federal Civil False Claims Act and federal common law. The two qui tam actions
have been unsealed and the complaints include substantially similar allegations. In addition, in 2009, several states and the District
of Columbia filed a complaint under the same docket number asserting violations of various state laws based on allegations
substantially similar to those set forth in the civil complaint filed by the DOJ. We are exploring with the DOJ various ways to resolve
its civil and criminal investigations relating to Protonix.
The U.S. Attorney’s Office for the Western District of Oklahoma is conducting a civil and criminal investigation with respect to
Wyeth’s promotional practices relating to Rapamune. In addition, in October 2010, the federal government was permitted to
intervene in a qui tam action, which alleges off-label promotion of Rapamune, that was pending in the U.S. District Court for the
Eastern District of Pennsylvania. In December 2010, the qui tam action was transferred to the Western District of Oklahoma, where
it was consolidated with the proceedings underway there.
We have received civil investigative demands and informal inquiries from the consumer protection divisions of several states
seeking information and documents concerning the promotion of Lyrica and Zyvox. These requests appear to relate to the same
past promotional practices concerning these products that were the subject of previously reported settlements in September 2009
with the DOJ and the Medicaid fraud control units of various states.
2010 Financial Report 109