Tuesday, October 26, 2010

Drug Companies Are Tops in Fraud Payouts

Matthew Perrone of the Associated Press:

--informs us that of the top 10 settlements paid to the US Dept. of Justice to settle claims of fraud in the past year, 8 were paid by drug firms. (Just to be sure that health care was fully represented, an insurer and a hospital chain filled out the list of 10.)

I have been trying to log in these settlement announcements as they arise, as regular readers of this blog know. Perrone's overall summary of the last year of activity drives home the point we pharmascolds have been stressing for some time--the number of such fraud charges and settlements strongly hints that whatever is going on here is not a matter of an occasional aberration or a few bad apples in the barrel. Rather it seems as if the business policies that lead to the fraudulent or near-fraudulent behavior are standard default practices among the pharmaceutical industry, and that the cost of paying out these sums to DOJ or whomever is simply toted up as part of the cost of doing business.

Incidentally, so far as I can tell, Perrone's "top 10" list was compiled before it was announced earlier today that GlaxoSmithKline is paying $750 million to settle criminal and civil charges related to massive contamination and product-quality problems in a large manufacturing plant in Puerto Rico (that the company reports was closed in 2009):
This is a bit of change of pace as the usual fraud charge has been off-label marketing. It is also more worrisome, as we have tended to assume that while the big drug firms really want to push their pills so that more docs will prescribe them, at least they make good-quality pills. If pressures to turn big profits are now causing the firms increasingly not only to over-market, but also to skimp on quality and safety, then we are in a worse mess than we imagined.

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