On October 11, 2018, New York Attorney General Barbara D. Underwood announced a settlement with Pfizer, Inc. for deceptive advertising in a drug copayment card program. The settlement follows an investigation into Pfizer’s business and advertising practices for its copayment coupon program. The company advertised to consumers that they would “pay no more than” a certain amount for certain prescriptions, but then wound up spending far more at the cash register.
This settlement specifically resolves allegations that Pfizer deceptively marketed the copayment program for Estring, Quillivant XR and Quillichew ER, and Flector Patch products by distributing copayment coupons to consumers throughout the state without clearly and conspicuously disclosing material terms and conditions.
The copayment coupons handed out by Pfizer included large clear text that eligible consumers would “PAY NO MORE THAN” a certain amount out-of-pocket ($15, $20, or $25, depending on the drug). However, consumers would frequently pay more than the listed amount out of pocket because limits on total savings were not prominently disclosed to consumers.
The investigation by AG Underwood began when a consumer filed a complaint after receiving a deceptive Estring copayment coupon that said, “PAY NO MORE THAN $15,” but when she presented it to the cashier when paying for her prescription, had to pay $144.62.
“Pfizer misled customers by promising a low copay for prescription drugs – only to leave them with major bills at the cash register. Now, they must take responsibility and provide restitution to the New Yorkers they deceived,” said Attorney General Underwood. “My office will continue to investigate companies that mislead and deceive New Yorkers, including and especially those seeking medical treatment.”
Following the investigation, Pfizer agreed to change the text of the copayment coupons in question to instead say patients could “pay as little as” a listed amount – a process that was completed in early 2018.
The settlement resolves claims from 2014 to 2017, and according to Attorney General Underwood, the rate at which consumers paid more than the advertised maximum increased over time. While Pfizer did acknowledge some of the findings from the attorney general’s report, the company did not admit or deny liability.
The settlement with New York requires Pfizer to pay $500,000 in penalties, fees, and costs to the state, as well as over $200,000 in restitution to consumers. New York consumers are eligible for restitution in the amount of their copayment that exceeded the “PAY NO MORE THAN” amount listed on their relevant copayment coupon for the first use of the card. The consumer who brought the copayment coupons to the attention of AG Underwood has already been reimbursed the $129.62 she paid over what was expected, according to a settlement footnote.