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Multi-Billion Dollar Settlements for Big Pharma


Money trailThree years ago, Public Citizen issued a report that documents all of the settlements between pharmaceutical giants and the federal and state governments due to violations such as overcharging patients or by off-label marketing. At the time the tally was about $20 billion covering a period of 20 years.

The activity by Big Pharma shows no signs of subsiding and in fact settlements seem to be part of business as usual and on the rise.

GlaxoSmithKline agreed to pay $3 billion and plead guilty to criminal charges in July 2012, reports the New York Times. At the time, that was the largest fine levied for promoting Paxil, Wellbutrin and Avandia for uses they were not approved. Doctors were lured in by big ticket trips to islands with their families so they’d promote the antidepressant Paxil in children. The company knew or soon knew that teenagers risked suicidal thoughts on Paxil. Wellbutrin, a drug to treat major depression, was marketed for weight loss and sexual problems. The company withheld safety risk studies on Avandia even though it was linked to heart risks. The $3 billion included a criminal fine of $1 billion.

In May of the same year, Abbott Labs had to pay $1.6 billion over Depakote marketing, an anti-seizure drug. But since then the stakes have been bigger and more bitter for Big Pharma.

Johnson & Johnson (J&J) has risen to the top of the list in recent months. In November the health care products giant agreed to a $2.2 billion fine for the off-label marketing of schizophrenia drug Risperdal and withholding the dangers of users developing diabetes.

Then J&J agreed to a $4 billion settlement by its DePuy division over the defective ASR hip implants. The numbers are yet unclear because more patients are expected to come forward to seek revision surgery and a defective product claim concerning the metal-on-metal hips. Some have guesstimated that the J&J settlement could double over the years.

J&J internal documents showed they knew the ASR would fail far short of their promised 15 year life span – that about 37 percent would fail within five years. J&J and its DePuy unit recalled 93,000 ASR XL Acetabular metal-on-metal hips in August 2010.

Then there is the issue of 13,000 defective transvaginal mesh product liability lawsuits filed in federal court in West Virginia and thousands more waiting to go to trial in state courts around the country. Trials will begin soon and if the last one was any indication, a win of $11.1 million for the plaintiff, including $7.76 million in punitive damages, J&J will not be able to sustain losses like that for long.

Still, no one has been charged criminally in any of these cases and sent to prison. Unlawful promotion, improper marketing, poor manufacturing practices, falsifying data submitted to the FDA, concealing research data from regulators, these are just a few of the ways business is conducted by Big Pharma.

Most agree that when executives have to spend some thoughtful time in prison – then these companies might mend their ways.

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