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Advocacy Groups Says Drug Makers Paying Less in Fines

An analysis by the consumer advocacy group Public Citizen says that big Pharma is paying less in fines. Has the industry cleaned up? Has there been a change in political thinking? Or is the FDA and Justice Department busy doing other things?

To answer that question, lets look at the numbers first. Public Citizen says drug makers paid just $2.8 billion in 2014 and 2015 in federal and state fines. During 2012 and 2013, that sum was $9.9 billion. In fact, the last time fines were this low was in 2004.

During the last two year cycle, the worst offenders were GlaxoSmithKline, Pfizer, Novartis and Johnson & Johnson.

Public Citizen says that fines are way down in part recently because there have not been any major prosecutions of off label use. That doesn’t surprise, President Obama previously cut funding for audits of Medicare.

The Justice Department and Centers for Medicare and Medicaid Services spearhead investigations on off label use. When their funding gets cut, prosecutions naturally dwindle. The FDA has it hands full with so many drugs and API now being made in hundreds of offshore facilities, often in China and India.

Public Citizen also thinks fines are down because prosecutors and regulators are focused on other targets. Unfortunately, they didn’t find that drug safety had improved or that big Pharma was suddenly behaving itself. In fact, Public Citizen believes the opposite.

The chief author of the report, Sammy Almashat, said, “The penalties were far smaller than the profits made on the drugs, sometimes not even as large as the sales generated by off-label uses possibly brought about by the fraud… I’d be surprised if companies are complying based on punishments that were given before.”

Big Pharma was quick to lash out at the report. According to the Pharmaceutical Research and Manufacturers of America (PhARMA), the report was a disappointment and “flawed.” Industry groups were quick to point out that in most settlements the company admitted no wrongdoing. In our humble opinion, however, only a guilty company would pay hundreds of millions of dollars in fines.

The good news in the report is the impact of whistleblowers are having on the industry. According to the Public Citizen study, case brought by whistleblowers under the federal False Claims Act were responsible for 71% of the approximately $32 billion in federal penalties collected between 1991 and 2015. That means whistleblowers helped the government collect $22.7 billion dollars.

We have always said that whistleblowers are the front lines in the battle against bad pharma. Despite many advances in medicine, the greed in our industry still exists. We need whistleblowers now more than ever – brave women and men who still believe that our industry exists primarily to help people.

The advantage of the False Claims Act is that whistleblowers can prosecute the cases privately if the Justice Department is too busy with other priorities. Individual whistleblowers don’t prosecute the cases personally, of course. The False Claims Act requires that whistleblowers have a lawyer to file their case. The lawyers do the actual prosecution.

If the case is successful, both the lawyers and the whistleblower get a paid a percentage of the recovery. Awards measured in the tens of millions of dollars are not uncommon in pharma cases.

Although our focus is on dangerous drugs being distributed in the United States and in other countries, the False Claims Act is an effective way to prosecute potency issues, adulterated pharmaceuticals, “pay-to-delay” schemes, foreign bribery and off label use. Unfortunately, when greed is at play, we often find all these violations.

If you have direct knowledge of any of the above violations, call us. We don’t charge for our services. Our mission is to restore integrity to our industry. Our goal is to simply help you find a lawyer that can advise you and help you put a stop to the misconduct. Getting a large cash award is just icing on the cake.

Related topics: Public Citizen