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.
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.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.
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.
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.