Law & Drug and Medical Device Corporations - Searcy Denney

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Brenda Fulmer

Drug and Medical Device Corporations — Are They Above the Law



Not a week goes by without a headline reporting on yet another settlement between a multi-national pharmaceutical company and state or federal prosecutors. Medical device manufacturers are often also frequently subject to similar prosecutions.  While it is laudable that governmental authorities are finally taking action against chronic wrongdoers, the frequency of these prosecutions and settlements, and the very high recidivism rate, leads one to wonder whether drug and medical device manufacturers see these payments for wrongdoing as merely yet another cost of doing business. And, perhaps, more troubling, a very small price to pay to have a chance at marketing the next multi-billion dollar blockbuster drug or must-have medical device.

The problem is that while our government is modestly increasing its coffers with these settlements and fines, little attention has been paid by regulators to the other victims of their misrepresentations and deceptive and unfair trade practices – patients who have, at best, been defrauded and, at worst, have been harmed by defective drugs and medical devices with which they never would have come in contact but for the improper marketing.

For many years, there have been dozens of announcements of investigations and settlements involving a number of transgressions of drug and medical device manufacturers:

  • Fraudulent direct-to-consumer advertising
  • Unfair trade practices, price-fixing, and collusion with pharmacy benefit managers and others that has contributed to escalating drug costs
  • Kickbacks and improper payments to doctors
  • Pollution of scientific articles and medical literature (through “ghostwriting” and other efforts) which have the effect of preventing doctors and patients from making important decisions regarding the risks versus the benefits of drugs
  • Knowingly manufacturing adulterated or contaminated products
  • Promotion of drugs and devices for indications and “off-label” uses that have not been approved by the FDA because they are unsafe or have insufficient proof of safety
  • Manipulation of clinical trials to under-report or mask safety issues

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Just this week, yet another study was published (this time in the online medical journal of PLOS – Public Library of Science, a non-profit organization devoted to making the world’s scientific and medical literature more accessible) which found that less than 20% of the advertisements that are placed in journals by drug and medical device companies who are marketing their wares to physicians are fully compliant with FDA guidelines.  Nearly 60% of the marketing pieces minimized risks associated with the product, and almost 30% failed to provide complete information on the medical product’s efficacy, which essentially means that physicians who are charged with assisting patients in balancing risks vs. benefits of a particular drug are unable to do so because so many of the advertisements and other materials that have informed the physician were false.

If your banker failed to comply with banking laws 80% of the time, federal regulators would move swiftly to close them down.  If your car only operated as represented 30% of the time, there would no doubt be an outcry for a recall and the broadcast of TV reports from consumer fraud investigators.  If only 20% of the facts taught to our children were accurate, would we continue to permit those educators to continue to teach?  Of course, not.

So, why do drug and medical device manufacturers get a pass?

Although Big Pharma might disagree, our laws still apply to them (despite their best efforts to carve out numerous exceptions).   We still expect big corporations to follow the same lessons that we teach our children – be honest, tell the truth, admit mistakes when you make them, be cautious and safe, and protect others from harm.  Is it too much to ask that the FDA and governmental regulators get tough with drug and medical device manufacturers in hopes that they might learn their lessons this time?

Perhaps, a three-strike rule might deter the repeat offenders?

Or withholding Medicare payments and reimbursements for the drugs and medical devices that are subject to fraudulent marketing practices (which might make more of an impact on the bottom line than the fractions of pennies that are currently being paid to resolve attorney general investigations)?

Better yet, how about criminal prosecutions of corporate executives who have authorized illegal activities under the guise of marketing?

The fraud that has been perpetrated by some in the drug and medical device industry certainly is every bit as offensive as the crimes of Bernie Madoff, but far worse, in that patients have been harmed or died as a result.  One can always hope . .  .


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