Subodh Varma, TNN | Jul 16, 2012, 03.52AM IST
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.