You believe WHAT?

Authorities called Pfizer a repeat offender, noting it is the
company's fourth such settlement of government charges in the
last decade. The allegations surround the marketing of 13
different drugs, including big sellers such as Viagra, Zoloft,
and Lipitor.

As part of its illegal marketing, Pfizer invited doctors to
consultant meetings at resort locations, paying their expenses
and providing perks, prosecutors said.

"They were entertained with golf, massages, and other
activities," said Mike Loucks, the U.S. attorney in
Massachusetts.

Loucks said that even as Pfizer was negotiating deals on past
misconduct, they were continuing to violate the very same laws
with other drugs.

To prevent backsliding this time, Pfizer's conduct will be
specially monitored by the Health and Human Service Department
inspector general for five years.

In an unusual twist, the head of the Justice Department,
Attorney General Eric Holder, did not participate in the record
settlement, because he had represented Pfizer on these issues
while in private practice.

Associate Attorney General Thomas Perrelli said the settlement
illustrates ways the Justice Department "can help the American
public at a time when budgets are tight and health care costs
are rising."

Perrelli announced the settlement terms at a news conference
with federal prosecutors and FBI, and Health and Human Services
Department officials.

The settlement ends an investigation that also resulted in
guilty pleas from two former Pfizer sales managers.

Officials said the U.S. industry has paid out more than $11
billion in such settlements over the past decade, but one
consumer advocate voiced hope that Wednesday's penalty was so
big it would curb the abuses.

"There's so much money in selling pills, that there's a
tremendous temptation to cheat," said Bill Vaughan, an analyst
at Consumers Union, the nonprofit publisher of Consumer Reports.

"There's a kind of mentality in this sector that (settlements)
are the cost of doing business and we can cheat. This penalty is
so huge I think consumers can have some hope that maybe these
guys will tighten up and run a better ship."

The government said the company promoted four prescription
drugs, including the pain killer Bextra, as treatments for
medical conditions different from those the drugs had been
approved for by federal regulators. Authorities said Pfizer's
salesmen and women created phony doctor requests for medical
information in order to send unsolicited information to doctors
about unapproved uses and dosages.

Use of drugs for so-called "off-label" medical conditions is not
uncommon, but drug manufacturers are prohibited from marketing
drugs for uses that have not been approved by the Food and Drug
Administration. They said the junkets and other company-paid
perks were designed to promote Bextra and other drugs, to
doctors for unapproved uses and dosages, backed by false and
misleading claims about safety and effectiveness.

Bextra, for instance, was approved for arthritis, but Pfizer
promoted it for acute pain and surgical pain, and in dosages
above the approved maximum. In 2005, Bextra, one of a class of
painkillers known as Cox-2 inhibitors, was pulled from the U.S.
market amid mounting evidence it raised the risk of heart
attack, stroke and death.

A Pfizer subsidiary, Pharmacia and Upjohn Inc., which was
acquired in 2003, has entered an agreement to plead guilty to
one count of felony misbranding. The criminal case applied only
to Bextra.

The $1 billion in civil penalties was related to Bextra and a
number of other medicines.

A portion of the civil penalty will be distributed to 49 states
and the District of Columbia, according to agreements with each
state's Medicaid program.

Pfizer's top lawyer, Amy Schulman, said the settlements "bring
final closure to significant legal matters and help to enhance
our focus on what we do best -- discovering, developing and
delivering innovative medicines."

In her statement, Schulman said: "We regret certain actions
taken in the past, but are proud of the action we've taken to
strengthen our internal controls and pioneer new procedures."

In financial filings in January, the company had indicated that
it would pay $2.3 billion over the allegations.

The civil settlement announced Wednesday covered Pfizer's
promotions of Bextra, blockbuster nerve pain and epilepsy
treatment Lyrica, schizophrenia medicine Geodon, antibiotic
Zyvox and nine other medicines. The agreement with the Justice
Department resolves the investigation into promotion of all
those drugs, Pfizer said.

The government said Pfizer also paid kickbacks to market a host
of big-name drugs: Aricept, Celebrex, Lipitor, Norvasc, Relpax,
Viagra, Zithromax, Zoloft, and Zyrtec.

The allegations came to light thanks largely to five Pfizer
employees and one Pennsylvania doctor, who will now share $102
million of the settlement money.

FBI Assistant Director Kevin Perkins praised the whistleblowers
who decided to "speak out against a corporate giant that was
blatantly violating the law and misleading the public through
false marketing claims."

To rein in the abuses, the government's five-year monitoring
will force Pfizer to notify doctors about Wednesday's agreement,
encourage them to report any similar behavior, and publicly post
any payments or perks it gives to doctors.

Under terms of the settlement, Pfizer must pay $1 billion to
compensate Medicaid, Medicare, and other federal health care
programs. Some of that money will be shared among the states:
New York, for example, will receive $66 million, according to
the state's attorney general, Andrew Cuomo.

When Pfizer originally disclosed the settlement figure, it also
announced plans to acquire rival Wyeth for $68 billion. That
deal, which would bolster Pfizer's position as the world's top
drug maker by revenue, is expected to close before year's end.

Shares of Pfizer dropped 14 cents to $16.24 in midday trading.