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ELEANOR HALL: The world's biggest drug maker has been fined a record amount by US regulators for
its fraudulent practices.

Pfizer has been fined $2.8 billion, the largest healthcare fraud settlement in US history, for
trying to sell drugs for uses not approved by the regulators.

The US Government says the practices put public health at risk and lawyers say the penalties are a
clear message by the Obama administration that such behaviour won't be tolerated.

Sue Lannin has our report.

SUE LANNIN: US Associate Attorney General Tom Perrelli was not mincing words when he announced the
record fine against Pfizer for the illegal promotion of its products.

TOM PERRELLI: When a drug is marketed or promoted for non-authorised so-called off label uses, any
use not approved by the FDA, as was the case here, public health may be at risk. And there is a
real danger for patients that the medical providers who prescribed the medicine or the device
aren't provided with, don't have full information about the drug's risks and benefits.

SUE LANNIN: Pfizer agreed to pay nearly $3 billion to settle criminal and civil allegations it
illegally sold four drugs for uses not approved by the Food and Drug Administration.

One of those products was Bextra, an arthritis drug which Pfizer told doctors could ease severe
pain. Bextra was pulled from the market in 2005 after concerns it could cause heart attacks and
strokes.

Pfizer was also accused of paying kickbacks to doctors to prescribe the drugs.

US Health Secretary Kathleen Sebelius says the company will now report to her department.

KATHLEEN SEBELIUS: The agreement requires that Pfizer's audit committee conducts annual reviews of
the company's compliance program.

This is the first time ever that a drug company has agreed to look at the risks associated with
marketing on its own and develop a plan to deal with those risks. And we are going to continue to
closely monitor Pfizer's performance.

SUE LANNIN: The practices were exposed by former Pfizer sales representative and Gulf War veteran
John Kopchinski.

In a statement he said:

EXTRACT FROM STATEMENT BY JOHN KOPCHINSKI: In the army I was expected to protect people at all
costs. At Pfizer I was expected to increase profits at all costs, even when sales meant endangering
lives. I couldn't do that.

SUE LANNIN: Mr Kopchinski and the five other whistleblowers will share more than $100 million for
their role in exposing the scandal.

Erika Kelton, a partner at Phillips and Cohen in Washington, is Mr Kopchinski's lawyer.

ERIKA KELTON: It takes a lot of courage to take the risks and stand up and speak out. It's
important to appreciate what those risks are. When John lost his job there were great disruptions
in his family; very stressful. It was six-and-a-half years. He had a very young family. When he was
fired by Pfizer he had an infant son and twins on the way. So you can imagine how stressful that
is.

SUE LANNIN: Pfizer says it regrets past actions and will learn from them.

Ray Kerins is Pfizer's vice president of worldwide communications.

RAY KERINS: Let me be very clear. We absolutely regret the actions that we have taken in the past.

Off marketing promotions is something that we do not accept regardless of the product. When the FDA
indicates, or frankly any regulatory authority indicates its usage, that is what we are focused on
in making sure that patients and physicians are well aware of what the drugs are used for.

So you know we seriously regret the actions of the past year but we are focused on looking at what
can we learn from the situation and make sure we are a stronger company going forward.

SUE LANNIN: The Department of Justice says that you illegally promoted four drugs. What were the
reasons for that?

RAY KERINS: You know, as I said to you, this is what's really important is we have, this is a
agreement that we previously disclosed back in January this past year that we made with the
Department of Justice for $2.3 billion settlement.

And what Pfizer has done here today in essence it allows us to come to final closure of significant
legal matters that we are now are happy to say are in the past but more importantly allows us to
focus on what we do best which is, you know Pfizer is a global company. In fact we have a pretty
significant presence in Australia which is very important to us and our focus is on discovering and
developing and delivering life saving innovative medicines to patients and physicians.

SUE LANNIN: Was anyone hurt as a result of your practices?

RAY KERINS: This was not about safety but more rather about promotional practice again we just do
not accept as a company.

ERIKA KELTON: The historic $1.3 billion criminal fine for Bextra marketing does speak to the
gravity of Pfizer's conduct.

SUE LANNIN: Pfizer Australia says Bextra was never sold here. The company is planning to buy drugs
giant Wyeth giving it control of 40 per cent of the world's prescription drug production.

ELEANOR HALL: Sue Lannin reporting.