E-drug: India to help Nigeria tackle the import of fake drugs
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BMJ 326:1233 (7 June 2003)
Schering-Plough is accused of overcharging and of obstructing
Florida Fred Charatan
Last month Schering-Plough, based in Kenilworth, New Jersey, said
that it faced indictment on a number of charges listed in a letter from
the US Attorney's Office in Boston for the District of Massachusetts.
The charges included giving financial grants and other items of value
to doctors and other customers, marketing drugs for unapproved
uses - so-called off-label uses - and submitting false drug prices to
the government so that Medicaid paid too much for the company's
Under federal law drug companies must sell drugs to Medicaid, the
federal healthcare programme for poor people, at their lowest prices.
The most serious charge was document destruction and obstruction
of justice relating to the federal government's investigation.
Schering-Plough's announcement of the charges complied with the
law that requires publicly traded companies to quickly disclose
significant information to their shareholders. The company said that it
continues to cooperate with the US Attorney's Office, which has
advised it that it will have an opportunity to submit evidence and legal
arguments in response to the allegations made in the letter.
The allegations against Schering-Plough, which derive from a two
year investigation, are the latest in a number of investigations and
lawsuits by consumers and state and federal governments focusing
on the pharmaceutical industry's marketing practices.
The rising number of cases is due to the escalating costs of
prescription drugs and the burden these costs place on governments,
employers, and patients. For example, Warner-Lambert is under
investigation for allegedly promoting off-label uses of the
anticonvulsant drug gabapentin (Neurontin) (BMJ 2003;326:620).
Last year TAP Pharmaceutical Products paid $875m (GBP 540m; Euro 750)
to settle criminal and civil charges that it had illegally manipulated the
Medicare and Medicaid programmes.
If Schering-Plough is found guilty of healthcare fraud the government
could seek to bar its prescription drugs from the Medicare and
Medicaid programmes. Healthcare companies and their lawyers call
such a step "the death penalty" because of the devastating effect it
would have on a company's business.
In July 2002 Pharmaceutical Research and Manufacturers of
America, which represents major drug makers, unanimously adopted
a new marketing code to govern the pharmaceutical industry's
relations with doctors and other healthcare professionals.
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