Skip to main content

Headlines are booming with another record setting fine from the Department of Justice, but the true fact, that the record settlement is a small percentage of the profits from the fraud, won't be front and center in the discussion.

In the largest settlement involving a pharmaceutical company, the British drugmaker GlaxoSmithKline agreed to plead guilty to criminal charges and pay $3 billion in fines for promoting its best-selling antidepressants for unapproved uses and failing to report safety data about a top diabetes drug, federal prosecutors announced Monday. The agreement also includes civil penalties for improper marketing of a half-dozen other drugs.

The fine against GlaxoSmithKline over Paxil, Wellbutrin, Avandia and the other drugs makes this year a record for money recovered by the federal government under its so-called whistle-blower law, according to a group that tracks such numbers.

In May, Abbott Laboratories settled for $1.6 billion over its marketing of the antipsychotic drug Depakote. And an agreement with Johnson & Johnson that could result in a fine of as much as $2 billion is said to be imminent over its off-label promotion of another antipsychotic drug, Risperdal.

No individuals have been charged in any of the cases. Even so, the Justice Department contends the prosecutions are well worth the effort — reaping more than $15 in recoveries for every $1 it spends, by one estimate.

Hooray for the Justice Department.  Until you look further.

Looking beyond the fine

The $3 billion that GlaxoSmithKline LLC will pay in the largest health care fraud settlement in U.S. history represents only a portion of what the company made on the three drugs involved. Avandia racked up in sales, Paxil brought in $11.6 billion, and Wellbutrin sales were $5.9 billion during the years covered by the settlement, according to IMS Health, a data group that consults for drug makers.
So, it turns out once again that the fraudulent corporation gets to keep a huge portion of the profits from their crime while only a small amount goes out in a fine.  Just the cost of doing business to the CEOs.

What fraud did they commit justify a fine?

Accompanying the criminal case was a civil settlement in which the government said the company's improper marketing included providing doctors with expensive resort vacations, European hunting trips, high-paid speaking tours and even tickets to a Madonna concert.
Not a shocker.  I spent most of my nursing career in Ambulatory Care and saw the incredibly aggressive pharmaceutical reps doing the same thing for decades.  Expensive gifts, lunches and dinners, are just among the largess they provide for doctors willing to prescribe their stuff.  And then there are the "reminders" they leave like pads of paper, pens, and paperweights that boldly display the name of the New Drug Everyone Must Prescribe.
Prosecutors said GlaxoSmithKline illegally promoted Paxil for treating depression in children from April 1998 to August 2003, even though the FDA never approved it for anyone under age 18. The corporation also promoted Wellbutrin from January 1999 to December 2003 for weight loss, the treatment of sexual dysfunction, substance addictions and attention deficit hyperactivity disorder, although it was approved only for treatment of major depressive disorder.

Justice Department officials also said that between 2001 and 2007 GlaxoSmithKline failed to report to the FDA on safety data from certain post-marketing studies and from two studies of the cardiovascular safety of the diabetes drug Avandia. Since 2007, the FDA has added warnings to the Avandia label to alert doctors about potential increased risk of congestive heart failure and heart attack.

The drug corporation also agreed to resolve civil liability for promoting the drugs Paxil, Wellbutrin, Advair, Lamictal and Zofran for off-label, non-covered uses. In the civil settlement, the government said Advair was promoted as a first-line therapy for mild asthma though not approved for that and for chronic obstructive pulmonary disease with misleading claims. It said the anti-epileptic medicine Lamictal was promoted for off-label psychiatric uses, neuropathic pain and pain management. And it said certain forms of Zofran, approved only for post-operative nausea, were promoted for treatment of morning sickness in pregnant women.

The company also resolved accusations that it paid kickbacks to doctors to prescribe those drugs as well as the drugs Imitrex, Lotronex, Flovent and Valtrex.

Yeah, that's right, they lie about what these drugs can be used for.  On top of that, as drugs near the end of their 17 year patent (when the patent expires lower priced generics finally become available), there is a mad scramble at the FDA to extend the conditions for which that drug can be prescribed which, if granted, will give another 17 year patent for the drug.

What a racket.

So, when you read about the record fine and think all is well, remember that the bank robber made off with most of the loot, paid some back as a "fine" and stayed out of jail.

.

Originally posted to Puddytat on Tue Jul 03, 2012 at 11:24 AM PDT.

Also republished by Badger State Progressive, ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement, and Progressive Hippie.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  It's not justice when most of the (15+ / 0-)

    loot from a crime stays with the criminal and the criminal stays out of jail.

    There already is class warfare in America. Unfortunately, the rich are winning.

    by Puddytat on Tue Jul 03, 2012 at 11:24:26 AM PDT

  •  Huge portion of profits? (4+ / 0-)
    Recommended by:
    opinionated, weck, OIL GUY, Wee Mama

    How are we to know how much profit resulted from these sales numbers?

    The $3 billion that GlaxoSmithKline LLC will pay in the largest health care fraud settlement in U.S. history represents only a portion of what the company made on the three drugs involved. Avandia racked up in sales, Paxil brought in $11.6 billion, and Wellbutrin sales were $5.9 billion during the years covered by the settlement, according to IMS Health, a data group that consults for drug makers.
    So, it turns out once again that the fraudulent corporation gets to keep a huge portion of the profits from their crime while only a small amount goes out in a fine.  Just the cost of doing business to the CEOs.
    •  It's nearly all profit (6+ / 0-)

      Manufacturing is cheap - that's why generics are so inexpensive compared to brand name drugs.

      There already is class warfare in America. Unfortunately, the rich are winning.

      by Puddytat on Tue Jul 03, 2012 at 11:51:36 AM PDT

      [ Parent ]

      •  That's not true! (1+ / 0-)
        Recommended by:
        Wee Mama

        Pharmaceutical companies spend billions of dollars on research, prior to getting FDA approval. Generics are cheap because they involve copying a drug that another pharmaceutical spent billions to develop.

        It would also be fair to point out that well over 90% of the drugs tested by pharmas never make it to market. Seventeen years seems like a long time for patent protection until you take into account that most of that time is spent developing the drug prior to FDA approval - the approval process itself takes almost 5 years, and that is proceeded by years of animal and human research in order to get the FDA to even consider the drug.

        Pharmaceutical Industry sales practices have been notoriously corrupt for many years. Doctors were wined and dined to encourage then to use a particular company's drugs. That has changed dramatically in the past few years, as a direct result of these enormous fines.

        ELi Lilly was the first pharma to publish a list which delineates every dollar that goes to physicians. This list is available on-line at no charge. It's sales and marketing people are held to strict standards which eliminate the overly aggressive marketing of the past. In Lilly's case, it was a billion dollar settlement imposed by Justice, that influenced the company to impose strict ethical standards on every aspect of its business.

        Here's my take on it - the revolution will not be blogged, it has to be slogged. - Deoliver47

        by OIL GUY on Tue Jul 03, 2012 at 12:30:40 PM PDT

        [ Parent ]

        •  Baloney (2+ / 0-)
          Recommended by:
          aliasalias, FarWestGirl

          Most drugs are developed at the taxpayer funded National Institute of Health and turned over to the drug companies for further development and testing.  

          In addition, drug companies spend vastly more on advertisng and promotion than they spend on research and development.

          There already is class warfare in America. Unfortunately, the rich are winning.

          by Puddytat on Tue Jul 03, 2012 at 12:36:59 PM PDT

          [ Parent ]

          •  Your second statement is correct, but your (0+ / 0-)

            first one is quite misleading. Drug discovery is only a small part of drug development in terms of the time and money involved.

            If you integrate fantasy with reality, you do not instantiate reality. If you mix cow pie with apple pie, it does not make the cow pie taste better; it makes the apple pie worse. --Mark Crislip

            by ebohlman on Tue Jul 03, 2012 at 01:38:48 PM PDT

            [ Parent ]

    •  Because of our Research (4+ / 0-)
      Recommended by:
      Puddytat, weck, aliasalias, FarWestGirl
      Paxil statistics show that GlaxoSmithKline has earned approximately $20 billion on the sales of Paxil in just the United States.

       There is little surprise, therefore, that GlaxoSmithKline ranks in the top three worldwide among pharmaceutical companies for sales and profitability, with an average of over $40 billion per year in revenue and $15 billion in profits

      Paxil Statistics

      Actually, its much, much worse than you think.  GSK pushed doctors to perscribe Paxil for children, when it knew from previous drug studies that giving Paxil to children increased the chances of suicide in children.

      Thus, to make a few bucks, GSK pushed Paxil on kids knowing that Paxil would kill cause some of these children to kill themselves.

      For this, they get the usual 1%ers' wristslap, instead of going to jail.  

  •  Some people died from those drugs (6+ / 0-)
    Recommended by:
    Puddytat, DRo, TimmyB, weck, aliasalias, FarWestGirl

    Why aren't the execs charged with murder?  I know I'd be charged with murder in a heartbeat if I killed people for profit.

    I do not like thee, Doctor Fell, The reason why I cannot tell; But this I know, and know full well, I do not like thee, Doctor Fell.

    by opinionated on Tue Jul 03, 2012 at 11:48:46 AM PDT

  •  I would love to see a large warning notice on (3+ / 0-)
    Recommended by:
    Puddytat, ladybug53, FarWestGirl

    every pharma ad stating where the safety warnings are available, like at one collected website.  The little "only your doctor" warning is insufficient.

     If Big pharma wants to advertise drugs directly to consumers, then they need to make a bigger deal about side effects and interactions because I don't think Dr's get enough time to learn all that.  Some of us are lucky enough to have pharmacists who go over the problems with new prescriptions, but chain store pharms seem way overworked to me.

    If love could have saved you, you would have lived forever.

    by weck on Tue Jul 03, 2012 at 12:21:39 PM PDT

    •  Frankly and IMHO (6+ / 0-)

      they shouldn't be allowed to advertise prescription drugs at all.  It drives doctors crazy to have not only the drug reps but hoardes of patients insisting on a new drug particularly when their medical problem is well controlled on their current meds.

      I feel the same way about ads for things we can't buy (like jet engines and Boeing 767s) because those are all about news control rather than real advertising.

      There already is class warfare in America. Unfortunately, the rich are winning.

      by Puddytat on Tue Jul 03, 2012 at 12:45:40 PM PDT

      [ Parent ]

      •  For a long time, they couldn't advertise except to (2+ / 0-)
        Recommended by:
        Wee Mama, Puddytat

        doctors.  Think of how the media would wither if they took pharma advertising away now.  That genie is out of the bottle.

        If love could have saved you, you would have lived forever.

        by weck on Tue Jul 03, 2012 at 12:48:37 PM PDT

        [ Parent ]

      •  The US and New Zealand (3+ / 0-)
        Recommended by:
        Puddytat, ladybug53, FarWestGirl

        are the only countries that allow direct-to-consumer advertising for prescription pharmaceuticals.

        If you integrate fantasy with reality, you do not instantiate reality. If you mix cow pie with apple pie, it does not make the cow pie taste better; it makes the apple pie worse. --Mark Crislip

        by ebohlman on Tue Jul 03, 2012 at 01:40:45 PM PDT

        [ Parent ]

        •  Big Pharma is trying to (3+ / 0-)
          Recommended by:
          aliasalias, FarWestGirl, ebohlman

          advertise in other countries, but medical professionals and governments are standing in the way.  They only need to look at the US to see what the problem is with these ads.

          There already is class warfare in America. Unfortunately, the rich are winning.

          by Puddytat on Tue Jul 03, 2012 at 01:57:43 PM PDT

          [ Parent ]

          •  Good piece of evidence that (1+ / 0-)
            Recommended by:
            Puddytat

            physicians are not, contrary to the repeated assertions of alt-med conspiracy theorists, actually in thrall to the pharmaceutical companies.

            If you integrate fantasy with reality, you do not instantiate reality. If you mix cow pie with apple pie, it does not make the cow pie taste better; it makes the apple pie worse. --Mark Crislip

            by ebohlman on Tue Jul 03, 2012 at 10:42:57 PM PDT

            [ Parent ]

  •  Here in Florida - Bimbo Bondi taking full credit (2+ / 0-)
    Recommended by:
    weck, Puddytat

    http://www.tampabay.com/...

    Totally laughable.  Her and Scott did not even follow thru on lawsuits against BP so does anyone really think she would file against a Drug Company??

  •  sleep on a bench overnight go to jail (3+ / 0-)
    Recommended by:
    Puddytat, aliasalias, FarWestGirl

    kill kids and people via bullshit, get a 20% penalty against your profits.

    yeah.. nice fucking country we live in.

    Bad is never good until worse happens

    by dark daze on Tue Jul 03, 2012 at 12:38:32 PM PDT

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site