Multibillion-Dollar Fines Won’t Change Behavior of Criminal Pharmaceutical Companies
September 21st, 2012“The pharmaceutical industry is the most lucrative, the most cynical and the least ethical of all the industries. It is like an octopus with tentacles that has infiltrated all the decision making bodies, world health organisations, governments, parliaments, high administrations in health and hospitals and the medical profession. It has done this with the connivance, and occasionally the corruption of the medical profession. I am not just talking about medicines but the whole of medicine. It is the pharmaceutical industry that now outlines the entire medical landscape in our country.”
Via: Independent:
The global pharmaceutical industry has racked up fines of more than $11bn in the past three years for criminal wrongdoing, including withholding safety data and promoting drugs for use beyond their licensed conditions.
In all, 26 companies, including eight of the 10 top players in the global industry, have been found to be acting dishonestly. The scale of the wrongdoing, revealed for the first time, has undermined public and professional trust in the industry and is holding back clinical progress, according to two papers published in today’s New England Journal of Medicine. Leading lawyers have warned that the multibillion-dollar fines are not enough to change the industry’s behaviour.
The 26 firms are under “corporate integrity agreements”, which are imposed in the US when healthcare wrongdoing is detected, and place the companies on notice for good behaviour for up to five years.
The largest fine of $3bn, imposed on the UK-based company GlaxoSmith-Kline in July after it admitted three counts of criminal behaviour in the US courts, was the largest ever. But GSK is not alone – nine other companies have had fines imposed, ranging from $420m on Novartis to $2.3bn on Pfizer since 2009, totalling over $11bn.
Kevin Outterson, a lawyer at Boston University, says that despite the eye watering size of the fines they amount to a small proportion of the companies’ total revenues and may be regarded as a “cost of doing business”. The $3bn fine on GSK represents 10.8 per cent of its revenue while the $1.5bn fine imposed on Abbott Laboratories, for promoting a drug (Depakote) with inadequate evidence of its effectiveness, amounted to 12 per cent.
Mr Outterson said: “Companies might well view such fines as a quite small percentage of their global revenue. If so, little has been done to change the system. The government merely recoups a portion of the financial fruit of firms’ past misdeeds.”
He argues that penalties should be imposed on executives rather than the company as whole. He cites a Boston whistleblower attorney, Robert Thomas who observed that GSK had committed a $1bn crime and “no individual has been held responsible”.
Research Credit: ms
