Blog Explanation

This blog brings together content that is noticeable, important or otherwise interesting from a human givens point of view.

Wednesday, 18 July 2012

Unfair practices: Pharma companies fined $13bn in 4 years (Times of India)

In the past four years, leading members of Big Pharma like GlaxoSmithkline, Pfizer, Johnson & Johnson, AstraZeneca, Merck, Abbot, Eli Lilly and Allergen have paid about $13 billion in fines to settle charges of misleading marketing, promising what drugs don't do, bribing doctors to get their drugs prescribed, causing sometimes fatal side-effects, and other crimes. The patients targeted by them ranged from children to dementia afflicted senior citizens. An analysis of their total revenues and the income from the drugs they are charged with shows that while huge, the fines are at best slaps on the wrist — their jaw-dropping revenues far outweigh the penalties.

Here are the facts: GlaxoSmithKline was fined $3 billion by the US justice department for marketing drugs for unapproved uses, paying kickbacks to doctors and Medicare system, downplaying known risks of certain drugs. They sold Paxil, an antidepressant, to children for whom it was not shown to work. They sold Wellbutrin, another anti-depressant, as a pill for weight-loss and erectile dysfunction. They sold the anti-diabetic pill Avandia concealing data that showed it increased cardiac risks. But in the years it took for all this to come through GlaxoSmithkline had made $11.6 billion on Paxil, $5.9 billion on Wellbutrin and $10.4 billion on Avandia. That's $27.3 billion — about 9 times the fine they are paying now to settle investigations.

Pfizer, the world's biggest pharma company with annual revenue of over $67 billion last year, paid up $2.3 billion in 2009 to settle a similar investigation. The drugs involved were Bextra, Geodon, Zyvox and Lyrica. Pfizer had been using illegal methods to sell them, like giving junkets and cash to sales reps for pushing the anti-arthritic pain killer Bextra as an all-purpose pain killer.

The reason for Pfizer's huge fine was that it included $1.3 billion for criminal liability - because this was the second time they had been caught. Earlier, in 2004, their subsidiary Warner-Lambert had been fined $430 million for the same violations, and they had promised never to repeat.

All four of Pfizer's controversial drugs had topped $1 billion in sales before coming under a cloud. And so it goes on. Johnson & Johnson has appealed against an Arkansas judge's ruling to cough up $1.2 billion for off-label marketing of Risperdal, Medicaid fraud and paying kickbacks to nursing care provider Omnicare. But industry experts say that J&J is going to settle with justice department for $2.2 billion and avoid nationwide penalties which would run into billions. Risperdal is estimated by industry analysts to have earned $24 billion for J&J since it went on sale in 2003 as an antipsychotic drug.

Abbott Laboratories aggressively pushed the anti-epilepsy blockbuster drug Depakote on elderly dementia patients saying that it helped control their agitation. There was no evidence that it did so. In fact, there was evidence of adverse effects. They also sold it as an anti-schizophrenia drug whereas it was approved only for seizures and bipolar mania. This year, Abbott agreed to settle all claims for $1.6 billion. Abbott had $38.85 billion sales last year. In 2011, Merck agreed to pay a fine of $950 million for selling Vioxx, a painkiller for four years before withdrawing it in 2004. It earned about $11 billion from Vioxx, but left behind a trail of patients with heart seizures and strokes.