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Pharmaceutical Giants Pay Billions in Fines

America’s largest drug manufacturers have paid out over $8 billion in fraud fines over the past decade, but they continue to operate legally because they are often the only providers of essential medications. Government officials say their hands are tied with the pharmaceutical business structure currently in place in the United States. They could exclude drugmakers from providing medications as punishment for bad behavior, but that would leave beneficiaries without drugs patented through a particular company.

Free Defective Drug Lawsuit Evaluation: If you or a loved one has suffered a serious injury you feel may have been caused by a drug, you should contact our law firm immediately. You may be entitled to compensation by filing a suit against the manufacturer of the drug and we can help.

What’s the problem?

March 15, 2012 – According to recently-published records, pharmaceutical giant Pfizer has paid nearly $3 billion in fines since 2002, and has entered into three corporate integrity agreements with the Department of Health and Human Services intended to prevent future fraud. It and other drugmakers are battling recent attempts by congress to exclude them from government business because of their repeated fraudulent activities.

Merck, another troubled pharmaceutical manufacturer, has reportedly paid over $1.5 billion since 2008 to resolve claims it was not paying proper rebates to the government.

In 2009, Pfizer settled for improperly marketing the use of its medications for purposes other than those for which they were approved by the U.S. Food & Drug Administration (FDA). Merck’s 2008 settlement involved allegations that the drugmaker paid under-the-table kickbacks to healthcare providers in exchange for promoting and prescribing its products.

With the current system in place, government investigators are largely powerless when dealing with pharmaceutical giants like Pfizer and Merck. They have the ability to bar the companies from providing prescription drugs to Medicaid and Medicare as punishment for fraudulent activities, but that would leave beneficiaries without critical medications patented through through a given company.

Alternatively, investigators can fine companies and force them to enter into government-regulated corporate integrity agreements with the promise of not to defraud again, but these are promises that all-too-often go unkept.

“We’re seeing some of the big companies a second and third time,” said Gregory Demske, assistant inspector general for legal affairs for Health and Human Services. “The corporate integrity agreement is not sufficient to deter further misconduct.”

Additionally, Demske sees the corporate integrity option as less than desirable due to the fact that the cases are labor and cost-intensive, and companies often fight for years to avoid an exclusion.

In an attempt to seek out a viable alternative to this situation, the government announced in 2010 that investigators would go after individuals within a company, rather than the company as a whole. The FDA and Justice Department are looking at new ways of working within the confines of the current system, such as taking away a company’s patent rights as a condition of a settlement. This option could begin with cases currently under investigation.

Senator Chuck Grassley of Iowa recently introduced a bipartisan bill that would make it easier for government investigators to find a happy middle ground, saying current regulations force “the inspector general to use all-or-nothing, mandatory exclusion penalties against corporations that have committed fraud.” The proposed bill would allow the exclusion of individuals from working with the government even after they’ve left the firm where the violation took place.

In 2011 alone, drugmakers spent more than $200 million lobbying congress, including more than $12 million spent by Pfizer. At least a dozen pharmaceutical and medical device firms are actively lobbying against House bill HR 675, proposed legislation that compliments Grassley’s.

Do You Have a Defective Drug Lawsuit?

The Product Liability & Defective Drug Litigation Group at our law firm is an experienced team of trial lawyers that focus on the representation of plaintiffs in defective drug lawsuits. We are handling individual litigation nationwide and currently accepting new defective drug injury cases in all 50 states.

Free Defective Drug Lawsuit Evaluation: If you or a loved one has suffered a serious injury you feel may have been caused by a drug, you should contact our law firm immediately. You may be entitled to compensation by filing a defective drug suit and we can help.

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