Public Citizen: Big Pharma Pays Big Civil and Criminal Penalties

Jane Akre
April 18, 2016
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Mesh Medical Device News Desk, April 18, 2016 ~ Public Citizen is going back in time 25 years to give a big picture look at the penalties Big Pharma has paid out.  

While financial news networks act like cheerleaders about Big Pharma and its big profits, the consumer group Public Citizen reports on the underbelly of what the real costs are to these companies.

In a 25 years survey, Twenty-Five Years of Pharmaceutical Industry Criminal and Civil Penalties: 1991 -2015, Public Citizen finds from 1991 to 2015 there were 373 settlements reached between big Pharma and state and federal governments. The price tag - $35.7 billion.

These are companies that behave badly and commit what would be considered crimes if they were deal with criminally. They are, however, dealt with civilly so the only penalty is to pay for your  bad behavior.

Highlights of the report are:

Big Pharma public citizen types of violations over 25 years

*State Medicaid programs represented the most common violation. Companies overcharge Medicaid commiting fraud.

*Unlawful promotion of a drug resulted in the largest financial penalties.

*GlaxoSmithKline and Pfizer paid the most in financial penalties - $7.9 and $3.9 billion.

*J&J, Merck, Abbott, Eli Lilly, Teva, Schering-Plough, Novartis and AstraZeneca also paid more than $1 billion in financial penalties.

*Qui Tam or whistleblower actions were responsible for 58% of federal settlements and 71% of federal penalties, amounting to at least $10.5 billion in financial penalties under the False Claims Act.

*A suspected bribery ring orchestrated by GlaxoSmithKline’s subsidiary in China was found guilty and fined nearly $500 million by the Chinese government. The DOJ is investigating GSK over the bribery charges.

*The third largest health fraud settlement in history $2.0 billion was paid by Johnson & Johnson over its antipsychotic drug, Risperdal, for use in elderly patients with dementia.  A multi-state settlement of $181 million against J&J was leveled for off label marketing of Risperdal.

*One lawyer writes feds have shied away from making use of the stronger sanctions available to them which has likely been a major factor responsible for drugmaker recidivism especially considering sales figures for the drugs involved in fraudulent activity.

For example, GlaxoSmithKline paid $3 billion in violations while Paxil, Wellbutrin SR and Avandia made $28 million in sales. Risperdal brought in $11.7 billion in sales while J&J paid $2 billion in penalties.

*Sen. Sanders and Rep. Cummings introduced legislation in May 2012 to prevent companies from maintaining FDA-granted marketing exclusivity for those companies and their drugs involved in illegal activity.

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These violations were litigated under the False Claims Act (FCA), commonly used to prosecute fraud with the help of insiders or whistleblowers. Those folks are supposed to be provided protection against retaliation and receive a percentage of the financial recovery of 15 to 25 percent that results from a government investigation.  The Food Drug and Cosmetic act is also used to prosecute the pharmaceutical companies, often for off-label promotion.

Public Citizen was the first consumer group to ask for the recall of surgical mesh for transvaginal repair in August 2011. #


Twenty-Five Years of Pharmaceutical Industry Criminal and Civil Penalties: 1991 -2015

Public Citizen: Ban Synthetic Surgical Mesh, August 2011

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