Only a couple of weeks ago we posted a blog about the rampant fraud committed by pharmaceutical companies—how off-label marketing and price inflation have become a way of life for these drug giants. Moreover, the fines they pay—even when seemingly impressive—don’t even come close to cutting deeply into their profits. A few members of Congress, like Rep. Bernie Sanders, want to change this so that drug giants can’t continue to commit crimes with the equivalent of financial immunity. Members of the Chamber of Commerce, on the other hand, want to place caps on lawsuits that limit the amount of money companies have to pay for their crimes and wrongdoings, even if these crimes kill or injure thousands of people.
As a prime example of pharmaceutical fraud, Johnson & Johnson has been accused by U.S. federal investigations and lawsuits of illegally marketing the antipsychotic Risperdal and other drugs. In response, Johnson & Johnson has agreed to pay up to $2.2 billion in a settlement, which includes a $600 million criminal penalty.
In addition to the government settlement, Johnson & Johnson is expected to pay $600 million in civil litigation settlements related to Risperdal and two other drugs.
The $2.2 billion will be the second largest settlement ever between the government and a pharmaceutical company (Pfizer paid a $2.3 billion settlement after it was charged with off-label marketing of the since-recalled painkiller Bextra in 2009).
But the fines are meaningless if we let these companies continue to commit fraud with off-label marketing, price inflation, and other crimes. We must push for steeper penalties than just dollars paid. Bernie Sanders’s idea to revoke a company’s exclusive marketing rights if the company is found guilty of fraud involving a particular drug would be a great start.