25 Years of Big Pharma—Profits, Lost lives and Litigation, Part 1

“Breaking the law shouldn’t be profitable, especially not when patients’ health and lives are on the line. Larger financial penalties, especially for repeat offenders, and jail time for executives implicated in criminal activity might actually change the calculus, so that the consequences of lawbreaking are no longer just a cost of doing business for Big Pharma.”

Dr. Sidney Wolfe, Founder and Senior Adviser to Public Citizen’s Health Research Group

On March 31, the non-profit consumer rights advocacy group Public Citizen released an update to its 2012 analysis of all major financial settlements and court judgments between pharmaceutical manufacturers and federal and state governments. The new report covered the period 1991 through 2015—the original report ended in July of 2012.

The updated report revealed the pharmaceutical industry paid more than 30 billion dollars to settle allegations of numerous violations. Between 1991 and 2015 there were a total of 373 settlements reached between the federal and state governments and pharmaceutical manufacturers for a total of 35.7 billion dollars; 140 were settled at the federal level for 31.9 billion dollars and 233 were state settlements that totaled 3.8 billion dollars. Twenty-nine states and the District of Columbia reached at least one single-state settlement with a pharmaceutical company during the 25-year period studied.

Last May, the California Supreme Court slammed the industry in litigation related to a pay-for-delay scheme. Pay-for-delay agreements are situations where patent holders agree to make a payment to potential competitors who threaten to enter the market and challenge the patent holder’s right to the patent thus delaying when the competitor enters the market and keeping the price of the product high.

The ruling confirmed a consumer’s right to challenge pharmaceutical pay-for- delay settlements under the state‘s competition law. The California Supreme Court ruling reversed the summary judgment granted to Bayer and Barr whose $398.1 million deal blocked for almost seven years, access to a generic and more affordable version of the widely prescribed antibiotic, Cipro. The court declared, “[P]arties illegally restrain trade when they privately agree to substitute consensual monopoly in place of potential competition.”

In May 2014, two Los Angeles Counties, Santa Clara and Orange, sued five of the nation’s largest drug companies claiming they were creating a population of addicts to reap block buster profits on narcotic painkillers. They counties accused the industry of the fraudulent marketing of addictive pain killers in order to undermine the effect of warning labels required by the U.S. Drug Administration. As a result, according to the plaintiffs, the companies boosted sales of dangerous drugs and risked public health in the process. Of course, the companies denied these allegations.

In August 2015, an Orange County Superior Court Judge ruled in favor of the drug companies who had argued the case be dismissed on the grounds the Federal Drug Administration (FDA) had jurisdiction over the case and that having a single point of oversight best served the public interest. According to the drug companies, the FDA process was more efficient, relied on regulators’ specialized expertise and prevents confusion. The judge agreed, but did not dismiss the case. Instead, he placed it in suspend status until the FDA process is completed.

In the meantime, Big Pharma continues to operate with impunity even as deaths, particularly of teens due to abuse of prescription painkillers, continue to increase.

In the meantime, people are dying. The facts are startling. In 2013, more Americans died from prescription and illegal drug overdoses than from car accidents or guns and yet there appears to be no real clear sense of urgency on the part of government officials to find a solution to this dilemma.  In the meantime, Big Pharma continues to operate with impunity even as deaths, particularly of teens due to abuse of prescription painkillers, continue to increase.

However, painkillers are not the only culprits. Last year there were several large settlements against the industry for numbered and varied reasons.

In October 2015, Takeda Pharmaceuticals settled thousands of Actos bladder cancer lawsuits for 2.4 billion dollars—one of the largest settlements in drug and device history. This came on the heels of a 2014 nine billion dollars jury verdict against the company in favor of a plaintiff who was diagnosed with bladder cancer after taking Actos—Actos is a diabetes medication.

Last year also saw 748 million dollars awarded in Transvaginal Mesh Lawsuits against a variety of companies; and yet, more than 70,000 Transvaginal Mesh lawsuits against seven companies are still pending in federal, multi-district litigation and thousands more are pending in state courts.

Also in 2015, Stryker Corporation paid 1.4 billion dollars to settle hip implant cases; there was an 11 million dollar jury verdict against Wright Conserve; and the company Zimmer Biomet lost a 9.2 million dollar case.

Johnson & Johnson paid millions last year as well. That case involved lawsuits related to its antipsychotic drug Risperdal that cause men and boys to grow female-type breasts. There are millions of dollars in Risperdal cases still pending across the nation.

Another Big Pharma lawsuit settled last year involved a piece of surgical equipment identified as a power morcellator, a drill-like device with sharp blades used to remove fibroids and perform hysterectomies. In 2014 this equipment was found to spread undiagnosed uterine cancer.

In addition, from 1991 through 2015, the overcharging of government health insurance programs, mainly drug pricing fraud against state Medicaid programs, was the most common violation, while the unlawful promotion of drugs as the single violation that resulted in the largest financial penalties.

Beginning in 1991 through 2015, GlaxoSmithKline and Pfizer reached the most settlements, thirty-one each and paid the most in financial penalties, $7.9 billion and $3.9 billion, respectively. In addition, Johnson & Johnson, Merck, Abbott, Eli Lilly, Teva, Schering-Plough, Novartis, and AstraZeneca also paid more than $1 billion each in financial penalties.

Thirty-one companies entered into repeat settlements with the federal government during the report period. The companies with the most multiple settlement agreements included in descending order Pfizer, Merck, GlaxoSmithKline, Novartis, and Bristol-Myers Squibb.

Feature Photo: Danny De Bruyne

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