The Legal Examiner Mark The Legal Examiner Mark The Legal Examiner Mark search twitter facebook feed linkedin instagram google-plus avvo phone envelope checkmark mail-reply spinner error close
Skip to main content

For America’s pharmaceutical companies, committing fraud has become an established way of life. Practices like off-label marketing and price inflation are not only rampant, they bring in millions, sometimes billions of dollars in profit—more than enough incentive for these corporations to justify their continuation despite whatever piddly sum the U.S. government fines them for their wrongdoings.

This week, Senator Bernie Sanders of Vermont proposed instituting tough new penalties that will actually make a difference in combating pharmaceutical industry fraud. His amendment to a FDA bill currently before the Senate would revoke a company’s exclusive marketing rights if the company is found guilty of fraud involving a particular drug.

The top-12 pharmaceutical companies made $49.1 billion in profits in 2011, with Pfizer making $10 billion and Johnson and Johnson making $9.7 billion. “The penalties these companies pay when they are caught and prosecuted simply aren’t big enough to stop them from being repeat offenders,” Sanders said.

The senator described “a culture of fraud” that he said permeates the pharmaceutical industry. Over the past decade, virtually all of the major private pharmaceutical companies were involved in significant health care fraud. “The question arises, is fraud within the pharmaceutical industry the exception, or is it, simply put, their business model?” –

The examples of pharmaceutical companies committing fraud really do go on and on. Merck committed fraud when it entered into a conspiracy with hospitals to give elderly patients cheaper drugs but charge them for the expensive ones they’d been prescribed by their doctors. Abbott Labs deliberately charged more than 10 times the actual cost of their drugs in order to boost Medicare/Medicaid reimbursements. Merck illegally marketed Vioxx for rheumatoid arthritis before this use was approved. Pfizer defrauded Medicaid by overcharging for the cholesterol-lowering drug Lipitor. Johnson & Johnson illegally marketed the anti-psychotic Risperdal to nursing home patients. In each case, the penalties paid by the companies amounted to a tiny percentage of their profits from the drugs.

Sanders’ proposal would help put a stop to the madness. “Companies that are fined for overcharging Medicare or Medicaid, or for dangerous illegal marketing practices, should not enjoy government-granted monopolies on those same medications,” Sanders said. –

He’s absolutely right there.

Comments are closed.