Thursday, September 26, 2013

Phun Phacts about Pharma Phraud Phines

Thanks to my most recent issue of the newsletter of the Physicians for a National Health Program (my full disclosure regarding my socialist pinko leanings), I was guided to the Nov/Dec 2012 newsletter of Public Citizen, which features on p. 8 an article by Jake Parent:

The major news in this article is how much criminal settlements and fines against major drug companies have gone up in recent years, to the extent that states going after drug firms for criminal behavior (usually overpricing) are almost assured of eventually recouping all of the costs of the investigation.

A statistic that I have had trouble tracking down in many instances when I’ve blogged about these big settlements is just what proportion of drug revenues the company had to pay in fines, so that from the company’s point of view, there is simply no financial incentive not routinely to skate as close to the legal thin ice as you can. Parent, in reviewing the total of $29.38B paid in fines by the “worst offender” major drug firms between 1991 and 2012, helps us out with this fact:

“Although some of these settlement amounts seem astronomical, many drug companies may consider the settlements a cost of doing business; the total amount paid in fraud cases by pharmaceutical companies over the past 20 years represents just two-thirds of the profits made by the 10 largest drug companies in 2010 alone.”

Public Citizen has added its voice to those calling for criminal prosecution of responsible company execs, as one of the only ways of reining in this persistent corruption. (See our earlier post for why misdemeanor charges against company execs might actually work better for this purpose than felony charges:


No comments: