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[e-drug] new study on criminal/civil violations by pharmaceutical industry

E-DRUG: new study on criminal/civil violations by pharmaceutical industry

dear E-druggers,
Pharmaceutical Industry Is Biggest Defrauder of the Federal Government Under 
the False Claims Act, New Public Citizen Study Finds
Civil, Criminal Settlements Have Increased Dramatically; Off-Label Promotion 
Largely Responsible
WASHINGTON, D.C. - The drug industry has now become the biggest defrauder of 
the federal government, as determined by payments it has made for violations of 
the False Claims Act (FCA), surpassing the defence industry, which had long 
been the leader, according to a new Public Citizen study released today.
The study found that pharmaceutical cases accounted for at least 25 percent of 
all federal FCA payouts over the past decade, compared with 11 percent by the 
defence industry.
The fraud results were a key finding from a Public Citizen analysis of all 
major pharmaceutical company civil and criminal settlements on the state and 
federal levels since 1991 and found that the frequency with which the 
pharmaceutical industry has allegedly violated federal and state laws has 
increased at an alarming rate. Of the 165 pharmaceutical industry settlements 
comprising $19.8 billion in penalties during the past 20 years, 73 percent of 
the settlements (121) and 75 percent of the dollar amount ($14.8 billion) have 
occurred during the past five years.
Many of the infractions, and the single largest category of financial 
penalties, stemmed from the practice of off-label promotion of pharmaceuticals 
- the illegal promotion of a drug for uses not approved by the Food and Drug 
Administration (FDA). Off-label promotion can be prosecuted as a criminal 
offence because of the potential for serious adverse health consequences to 
patients from such promotional activities. Another major category of federal 
financial penalties was purposely overcharging for drugs under various federal 
programs, which constitutes a violation of the FCA.
On the state level, the largest category of financial penalties has come from 
companies deliberately overcharging state health programs, such as Medicaid. 
Public Citizen?s study found this to be the most common category of violation 
among state settlements.
The increase in payments for fraud is likely attributable to drug companies 
engaging in more wrongdoing and better enforcement at the state and federal 
level, said Dr. Sidney Wolfe, director of the Health Research Group at Public 
?Desperate to maintain their high margin of profit in the face of a dwindling 
number of important new drugs, these figures show that the industry has engaged 
in such activities as dangerous, illegal promotion for unapproved uses of drugs 
and deliberately overcharging vital government health programs, such as 
Medicare and Medicaid,? said Wolfe. Wolfe compiled and analysed the data with 
physicians from the Johns Hopkins General Preventive Medicine program, Drs. 
Sammy Almashat and Charles Preston, as well as Columbia University public 
health student Timothy Waterman, all of whom worked at Public Citizen.
Public Citizen?s study also found that more than one-half of the industry?s 
fines were paid by just a few companies - GlaxoSmithKline, Pfizer, Eli Lilly 
and Schering-Plough. These four companies accounted for more than half of all 
financial penalties over the past two decades, paying $10.5 billion in fines 
collectively. These pharmaceutical companies were among the largest in the 
world. The two largest criminal penalties ever assessed by the U.S. government 
against any companies were against Lilly ($515 million) and Pfizer ($1.2 
billion), both in 2009.
To conduct the study, Public Citizen created a database of information about 
pharmaceutical companies? civil and criminal settlements, including information 
about the type of alleged violation and the amount of money paid in 
settlements. This study is the first to attempt to document and analyse all 
major pharmaceutical company settlements with both federal and state 
governments, the authors said.
Nationally, former pharmaceutical company employees and other whistleblowers 
have been instrumental in bringing to light the most egregious violations; they 
have initiated the largest number of federal settlements in the past decade. 
The number of federal settlements arising from whistleblower cases has more 
than doubled over the past five years, yielding total payouts more than two and 
a half times higher than in the previous 15 years combined. 
Needed remedies include imposing steeper financial penalties and criminally 
prosecuting company leadership, including jail sentences, if merited. 
?The danger to public safety and loss of state and federal dollars that comes 
with these violations require a more robust response,? Wolfe said.
To read the full report, visit

Public Citizen is a nonprofit consumer advocacy organization based in 
Washington, D.C. For more information, please visit www.citizen.org.
Sidney M. Wolfe MD
Director, Health Research Group at Public Citizen
1600 20th St. NW
Washington, DC 20009
Phone: +1 202 588-7735
Fax: +1 202 588-7796
e-mail: Swolfe@citizen.org
Web sites:  www.worstpills.org 
& www.citizen.org/hrg

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