Wednesday, October 10, 2012

Crime does pay

 Since 1991, the parmaceutical industry in the US has paid out more than $30 billion in 239 different settlements with the federal government and the states to resolve a wide range of fraud allegations. The companies have been accused of, or plead guilty to, such violations as overcharging state Medicaid programs for drugs, sometimes at 6,000 percent markups , and illegally marketing medications for unapproved, off-label uses for patients, even children and the mentally ill, whom the drugs will not benefit, and may actually harm.

While this may seem like a large sum, consider that $30 billion represents just over two-thirds of the profits of the top 10 drug companies in a single year (2010). The illegal activities alone likely generate much more in profits than they paid in penalties. This year’s GSK settlement is a case in point. GSK pleaded guilty to the concealment of critical data from studies that showed that its blockbuster diabetes drug Avandia caused fatal heart attacks and heart failure – deadly side effects that led to an estimated 50,000 to 100,000 deaths or injuries in patients on the drug. For this offense, the company paid a paltry $243 million criminal fine, or a mere 2 percent of the drug’s $10.4 billion sales over the time during which the fraud occurred.  No GSK executive was criminally charged.

From here

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