By Cary O’Reilly

Oct. 17 (Bloomberg) -- A unit of Pfizer Inc., the world’s largest drugmaker, was sentenced to pay $1.3 billion in penalties for misbranding medicines, including the largest criminal fine ever imposed in the U.S.

U.S. District Judge Douglas Woodlock in Boston ordered Pfizer’s Pharmacia & Upjohn unit to pay a $1.2 billion criminal fine and forfeit $105 million, Acting U.S. Attorney Michael Loucks said in a statement.

The fine, over sales practices for a painkiller since pulled from the market, is the biggest piece of a record $2.3 billion settlement announced last month between the U.S. Justice Department and New York-based Pfizer. The deal includes $1 billion in civil penalties, the largest non-criminal fraud case against a drugmaker, the Justice Department said.

The criminal case revolved around allegations that the painkiller Bextra and three other medicines were promoted for uses other than those approved by the U.S. Food and Drug Administration. The government, which pays for medicines through several health programs, started a criminal probe after private whistleblowers filed lawsuits in three states.

The four-year investigation uncovered a range of practices, including kickback payments to doctors in the sale of nine other drugs, among them the impotence drug Viagra and cholesterol pill Lipitor, officials said.

Pfizer, which had $48.3 billion in revenue last year, reported in January that it took a fourth-quarter charge of $2.3 billion to cover the preliminary agreement. The company has said it would have no additional charges from the case.

“Today’s hearing is the last step in a process to bring final closure to the settlement agreement with the U.S. Department of Justice that was announced on Sept. 2, 2009,” the New York-based company said yesterday in a statement.

Pfizer gained 11 cents to $17.77 in New York Stock Exchange composite trading. The shares have risen 5.1 percent over the past year.

The lead civil case is Collins v. Pfizer Inc., 04-11780, U.S. District Court, District of Massachusetts (Boston).

To contact the reporters responsible for this story: Cary O’Reilly in Washington at caryoreilly@bloomberg.net