Why is Big Pharma getting away with paying billions in criminal fines – but avoiding criminal charges?

Drug giant AstraZeneca has been working on a back room legal settlement deal with the U.S. government since last fall. And according to a New York Times investigation, the company has earmarked $520 million for the purpose.

According to the Times, the final arrangement will wrap up two federal investigations: one related to doctors who participated in clinical trials of the drug and another involved the company’s sales organization. The company allegedly misled both doctors and patients about the safety of its atypical anti-psychotic drug Seroquel, downplaying the known risks of weight gain and diabetes.

AstraZeneca has repeatedly denied any wrongdoing.

The drugmaker will pay $520 million in criminal fines and sign a corporate integrity agreement to settle probes into its marketing of the anti-psychotic drug. But the company will not face any criminal charges.  

This is the third Big Pharma marketing fraud settlement recently, and the second involving marketing of an atypical anti-psychotic drug. The other two were:

1.   Eli Lilly agreed to pay $1.4 billion to settle probes into its promotion of its own anti-psychotic drug Zyprexa, including a $515 million criminal fine.

2.  Pfizer agreed to pay $2.3 billion including a $1.3 billion criminal fine (the biggest in U.S. history) for illegal marketing of the painkiller Bextra, psychiatric drug Geodon, antibiotic Zyvox and epilepsy drug Lyrica.

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NEWS UPDATE – October 1, 2010

The drug company Novartis will pay a $185 million fine for promoting off-label uses of the epilepsy drug Trileptal and another $237.5 million in civil penalties to settle a suit involving Trileptal and five other drugs, the U.S. Department of Justice announced today.

The criminal case charged the company with promoting use of Trileptal for conditions it had not been tested or approved to treat, and for targeting marketing efforts — including funding Continuing Medical Education (CME) activities — at physicians who do not typically prescribe anti-epileptics.

The civil case alleged not only promotion of off-label uses of Trileptal, but also that Novartis paid illegal kickbacks to induce physicians to prescribe that drug as well as its drugs Diovan, Exforge, Sandostatin, Tekturna, and Zelnorm.

The civil suit also alleged that Novartis “caused invalid claims for payment” for the six drugs to be submitted to government program such as Medicare and Medicaid.

As part of the plea agreement, Novartis, like AstraZeneca was forced to do with its Seroquel criminal case, signed a corporate integrity agreement with the Department of Health and Human Services that promises the company will:

  • undergo annual third-party compliance review
  • issue a letter to healthcare professionals notifying them of the settlement
  • provide information on its website about future payments — such as honoraria or travel expenses — made to physicians.

Serious breach of that agreement could result in exclusion of the company from Federal health care programs, the Justice Department statement said.

NEWS UPDATE – November 3, 2011

The British drug company GlaxoSmithKline has agreed to pay a record $3 billion to settle United States government civil and criminal investigations into its sales practices for numerous drugs, including the diabetes drug Avandia, which has been linked to increased risks of heart disease.

Read about the AstraZeneca settlement deal, the $422 million penalties charged against Novartis (including their illegal kickbacks to doctors in the form of celebrity sports icon dinners) and wonder along with me why Big Pharma has managed to avoid facing criminal charges in any of this.

Also, learn more on how AstraZeneca markets Seroquel at: What Drug Reps Wrote in Their BlackBerries.

6 thoughts on “Why is Big Pharma getting away with paying billions in criminal fines – but avoiding criminal charges?

  1. This is a good question. Doesn’t paying a criminal penalty admit some kind of culpability? How much power do these big drug companies have over our government and legal system?

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  2. Pingback: GSK : Licence To (K)ill

  3. The huge fines are intended mainly to throw sand in the eyes of the consumer. At least the government is going after the evildoers. But the fines don’t hurt Big Pharma and the common run of consumers feel that, justice having been done are, if they are aware of it at all, satisfied that nothing further has to be done.

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    • I believe, sadly, that you’re right, Bud. When they start laying criminal charges against senior company execs, then you know Pharma will start getting the message. Until then, fines are merely the cost of doing business . . .

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