September: A Banner Month for Drug Industry Crime

Thursday, November 01, 2007 by: Herb Newborg
Tags: drug racket, Big Pharma, health news

(NewsTarget) September was a banner month for settlements by drug companies and medical device manufacturers for criminal activity in the United States, but not because of any effort by the FDA who is charged with regulating the drug and medical device industry. These cases were largely the result of the efforts of individual "whistleblowers" within the companies that are paid a percentage of any penalty collected, ranging from 15% to 30%.

On September 10^th, Sanofi-Aventis agreed to pay a settlement of $190 million for violations of the False Claims Act over a pricing and marketing scheme for its drug, Anzemet, an anti-emetic drug used in cancer treatment. The scheme bilked Medicare and Medicaid by falsely inflating the price charged to the government to increase the prescribing doctor's profits, thereby encouraging greater prescribing of its drug.

On September 27^th, Bristol Meyers Squibb agreed to pay $515 million to settle charges that it illegally promoted Abilify, an anti-psychotic drug for pediatric use and to treat dementia. Neither use is approved by the FDA. Further charges involved illegal inducements in the form of consulting fees and luxury trips paid to prescribing doctors. A pricing scheme to defraud Medicaid rounds out the list of crimes Bristol Meyers Squibb was successful in settling their way out of.

This month four companies: Zimmer, Johnson & Johnson unit DePuy Orthopaedics, Smith & Nephew and Biomet entered into an agreement to pay $311 million to settle charges they paid kickbacks to surgeons to use their products. The four companies represent nearly the entire market for replacement hips and knees.

Medtronics, a maker of devices used in spinal surgeries, has been accused this month of providing physicians with inordinately high consulting fees, free travel and other perks to distort decision-making among physicians and obscure the best interest of patients. This comes on the heals of last years $40 million settlement for similar activities.

The first payments to individual states began this month under the $634 million settlement negotiated by Purdue Frederick Co. Inc. over knowingly and fraudulently misbranding OxyContin as being less addictive, less subject to abuse and diversion, and less likely to cause tolerance and withdrawal problems than other pain medications.

These large "settlements" are nothing new. Some notable past cases include:

Schering Sales Corp. and its parent company, Schering-Plough Corp., agreed to pay $435 million earlier this year to settle allegations it lied to the government about drug prices and illegally promoted the drugs Temodar and Intron A for the treatment of cancers they were not approved for by the FDA.

In 2004, Pfizer Inc. paid $430 million in fines to settle allegations it marketed the epilepsy drug Neurontin for pain and psychiatric illnesses. Neither use is approved by the FDA.

In 2001, TAP Pharmaceutical Products paid $875 million to settle allegations it inflated prices and bribed doctors to prescribe its prostate cancer drug Lupron.

A sad fact is that the money collected in these settlements is paid to the federal government, individual states, lawyers and whistleblowers. None of the monies are used for drug safety, efficacy testing or to compensate the victims who are hurt by the overuse of the drugs that results from this illegal activity.

This is particularly egregious considering that the Oxycontin settlement alone represents more money than the FDA spent on drug safety and efficacy monitoring and regulation for the entire year in 2006.

About the author

Herb Newborg is president at Chiropractic America. Chiropractic America and Ogilvy PR Worldwide firm, Feinstein Kean Healthcare (FKH), have developed www.YourSpine.com along with a national marketing communications program to educate patients about the importance of spinal health and better align the chiropractic profession with consumer healthcare and wellness issues. FKH is a nationally-recognized leader in healthcare communications and public relations. Chiropractic America leverages FKH’s extensive healthcare experience to elevate public awareness and perception of chiropractic and ultimately drive informed and motivated patients to chiropractors nationwide.
Our mission is to educate consumers about the important role their spine plays in their overall health. We communicate the role chiropractors play in maintaining health by maintaining the integrity of the spine and nerve system. Well-educated, informed patients are equipped with the knowledge to take control of their health.