Pfizer settles lawsuit involving Celebrex

SALT LAKE CITY�Pfizer Inc. has settled a lawsuit filed by Brigham Young University over development of the blockbuster painkiller Celebrex for $450 million, according to a regulatory filing Tuesday.

Terms of the settlement weren't disclosed in an announcement by the drug company and the Mormon Church-owned school in Utah.

However, Pfizer said in a regulatory filing with the U.S. Securities and Exchange Commission that it was taking a $450 million charge against first-quarter earnings to settle the case.

BYU and Pfizer battled for six years over the discovery of an enzyme that led to the development of Celebrex, a breakthrough in the treatment of arthritis and inflammation. A jury trial had been set to start May 29 in U.S. District Court in Salt Lake City.

BYU had sought a 15 percent royalty on sales of Celebrex, or about $9.7 billion. The university also could have sought billions of dollars more in punitive damages and interest.

BYU's lawsuit said a chemistry professor, Daniel Simmons, discovered the genetic workings of the drug in the early 1990s. It accused Pfizer of violating a research agreement the school made with predecessor companies.

As part of the settlement, BYU plans to endow a Dan Simmons Chair in recognition of his lifelong work advancing human health.

"We are pleased to resolve this matter and the uncertainty of litigation and to be in a position to support Dr. Simmons' research efforts at BYU," Pfizer said in a brief statement. Neither side would comment further.

In court filings, BYU said it had a research agreement with Monsanto Co., later acquired by Pfizer, for the development of a "super aspirin" � a drug that could reduce pain and inflammation without triggering gastrointestinal effects. Simmons claimed to have discovered an enzyme that caused those side effects, and the new drug works to disable it.

According to BYU, Simmons' research was critical in the development of Celebrex, yet Monsanto and successor companies gave the chemistry professor no credit or compensation.

In court filings, Pfizer claimed it met all of its obligations under the Monsanto agreement. It argued BYU's lawsuit had no merit and that the school and Simmons were trying to capitalize on the commercial success of Celebrex.

Pfizer had claimed that Simmons did not contribute to the development of the drug. Last week, Pfizer accused lawyers for BYU of trying to taint a jury pool by briefing Utah media outlets on the upcoming trial.

The drug company responded by asking a federal judge to postpone or move the trial out of Utah. But all that changed Tuesday with what Pfizer called an "amicable" settlement.

Helping States Improve Care and Reduce Costs

Over the past two years, this administration has worked constantly to improve care while lowering costs. One important component of this effort has been partnering with states to stabilize Medicaid costs. A special area of focus for the department has been those beneficiaries who are eligible for both Medicare and Medicaid. They make up only 15% of Medicaid beneficiaries, but account for almost 40% of costs.

These beneficiaries are known as �dual-eligibles� because they receive coverage from both Medicare and Medicaid. �For example, a �dual eligible� may be a person who has longstanding diabetes, depression, hypertension and a history of strokes.� This individual who has three chronic conditions, multiple medications, limited mobility and inadequate food intake is at risk of hospitalization and requires significant personal assistance to maintain independence.� �Their health care costs are high because they have substantial health needs. But their costs are also higher because these beneficiaries must navigate two different programs. This fragmentation leads to needlessly expensive, inefficient, and often duplicative care. �

Under the Affordable Care Act, the Medicare-Medicaid Coordination Office was created to help solve these problems of fragmentation � to ensure that beneficiaries receive the highest quality, most coordinated care possible.� Today, the Department of Health and Human Services (HHS) made three announcements that will help states improve care and reduce costs for these patients.

• Two new financial adjustment models: States can test one or both of these options changing the way we pay for care and providing stronger incentives to keep these patients healthy.
• New demonstration project: This will help nursing facilities across the country test strategies for keeping their patients out of the hospital.
• Establishing a resource center: Providing technical assistance to any state interested in improving care for their highest-cost Medicaid enrollees.

These new efforts help provide a long-term, sustainable solution to slow Medicaid spending by improving care. By providing states with the tools to help deliver care more effectively, we are able to provide better care to vulnerable populations that need it the most. Instead of cutting costs and leaving states to fend for themselves, we are instead assembling a toolbox that will let states choose the best option for themselves and the people they serve.