South Carolina has settled a legal dispute with pharmaceutical giant Pfizer Inc. over sales tactics, with the company agreeing to pay about $11 million in cash and to donate prescription drugs.

Most of the money will going toward the state's Medicaid fund and its Employees Insurance Plan. Included in the settlement is $1.65 million in medications to be distributed to free health clinics throughout South Carolina.

The state Attorney General's office took legal action over the allegedly improper promotion of two drugs, schizophrenia medication Geodon and painkiller Bextra.

Drug makers have paid more than $11 billion in similar illegal marketing-related penalties and settlement payments during the past decade.

In a similar nationwide case, for example, federal prosecutors accused the pharmaceutical giant of encouraging doctors to prescribe drugs for uses not approved by the U.S. Food and Drug Administration.

Use of drugs for so-called "off-label" medical conditions is not uncommon, but manufacturers are prohibited from marketing drugs for uses that have not been approved. Prosecutors said junkets and other company-paid perks were designed to promote the 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 prosecutors had said Pfizer promoted it for acute pain, and in dosages above the approved maximum. In 2005, Bextra was pulled from the U.S. market amid mounting evidence it raised the risk of heart attack, stroke and death.

Pfizer officials did not admit wrongdoing in the South Carolina settlement.

"But they have agreed to pay a very large settlement to remedy the situation," said Mark Plowden, spokesman for Attorney General Henry McMaster.

Last fall, Pfizer settled with the 49 other states for a total of $331 million, marking the largest-ever civil fraud settlement against a pharmaceutical company. McMaster, who is running for governor, decided South Carolina should pursue its claim on its own.

Plowden said the strategy paid off.

"Our return to South Carolina was approximate double what it would have been had we joined the multi-state (settlement)," he said.

It will take South Carolina about a month to receive the money.

The Associated Press contributed to this report. Reach Katy Stech at 937-5549 or