Report Shows Breaking the Law 'Just a Cost of Doing Business for Big Pharma'

October 4, 2020 0 By HearthstoneYarns

As a new report shines light on 25 years of puny penalties for pharmaceutical industry lawbreaking, health activists worldwide are gearing up for a “Global Day of Action Against Pharma Greed,” scheduled to take place Friday.

The report, released Thursday afternoon by Public Citizen, shows that “stronger enforcement is needed to deter pharmaceutical manufacturers from continuing to break the law and defraud federal and state health programs,” according to a press statement. An update to a previous study released in 2012, the report catalogues all major financial settlements and court judgments between pharmaceutical companies and federal and state governments from 1991 through 2015, which totaled $35.7 billion.

“Breaking the law shouldn’t be profitable, especially not when patients’ health and lives are on the line.”
—Dr. Sidney Wolfe, Public Citizen’s Health Research Group

Within that 25-year span, overcharging of government health insurance programs—mainly drug pricing fraud against state Medicaid programs—was the most common violation, while the unlawful promotion of drugs was the single transgression that resulted in the largest financial penalties. Big Pharma giants GlaxoSmithKline and Pfizer reached the most settlements (31 each) and paid the most in financial penalties—$7.9 billion and $3.9 billion, respectively—to the federal and state governments.

Another of the report’s key findings is that both the number and size of settlements decreased significantly in 2014 and 2015.

While Public Citizen admits it can’t yet explain this drop in settlements, “we do know that, in addition to the rarity of executive accountability, previous penalties never have been large enough to deter the most common types of pharmaceutical fraud,” said Dr. Sammy Almashat, researcher with Public Citizen’s Health Research Group and lead author of the report.

Indeed, Public Citizen notes, the pharmaceutical industry’s $711 billion in global net profits from just one decade (2003-2012) dwarf the $35.7 billion in penalties recovered over the last quarter century.

“So it would be surprising,” Almashat said, “if the industry suddenly decided, of its own accord, to comply with laws it has routinely violated for decades.”