Big Pharma Displaces Defense Industry as Biggest Government Defrauder

by Anthony Chicotel, CANHR Staff Attorney

A study released last month has found that pharmaceutical companies now pay more in False Claims Act settlements and penalties than any other industry, displacing the defense industry as the nation’s most prolific defrauder.  In the past five years alone, pharmaceutical companies have paid $14.8 billion (that’s billion with a “b”) to the federal and various state governments in settlements and penalties, largely associated with the illegal off-label marketing and deliberate overcharging for drugs.  Of the twenty settlements studied, seven involved the unlawful promotion of psychotropic drugs.

Given the massive safety hazards of off-label drug use (using the drug to treat or control a condition for which the FDA has not approved), the study’s authors found that Big Pharma’s practices are a “danger to public safety,” deserving a “more robust response than the government’s current practices.”  Also troubling – particularly in these lean times for government budgets – is the massive costs these illegal practices impose on taxpayers.  The study’s authors argue if pharmaceutical companies can pay $14.8 billion in penalties and still generate huge profits, the penalties are an ineffective deterrent to unlawful behavior and understate the actual economic damage.  One obvious method to more effectively deter illegal drug pushing is to vigorously enforce the laws requiring doctors to give their patients complete information about the risks, benefits, and alternatives to a proposed drug.


About achicotel

Anthony Chicotel is a staff attorney for CANHR. His areas of expertise include the rights of long-term care residents, nursing home litigation, health care decision-making, and conservatorships.
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Responses to CANHR blog postings do not reflect the opinions of CANHR or its staff members.

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