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Greg Webb
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Drug Manufacturers Paid $8 Billion in Fraud Penalties

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Big Pharma won’t tell you, but they now have paid more than $8 billion in fraud fines for defrauding Medicare and Medicaid during the past ten years. Eight billion dollars has a nice ring to it. We suspect if the government dug deeper they could find a few more dollars to shore up the "entitlement" programs! Pfizer, alone, has paid practically $3 billion in fines since 2002.

Usually, companies—especially government contractors–that defraud the U.S. government are often barred from doing future business with the government after the exposure of fraud; Americans, however, need their meds. According to a recent article in USA Today, “Government investigators say their hands are tied with the tools they have. They can exclude Pfizer and other pharmaceutical companies from providing medications to Medicaid and Medicare beneficiaries as punishment for bad behavior, but that would leave beneficiaries without drugs patented through a particular company.” This is not economies of scale… these are, for the want of a better term, illegalities of scale! One might say these companies have certainly been using “out-of-the-box” business practices.

According to USA Today’s Kelly Kennedy’s March 5, 2012, article, Merck also paid $1.6 billion in fraud penalties in the past four years; these penalties were to “resolve claims Merck was not paying proper rebates to the government.”

The Justice Department says it aims to change this “trend” and instead of prosecuting whole companies and forcing them into “integrity agreements”, they may “go after individuals within a company” or possibly “take away a company’s patent rights.” The latter might work and it would certainly be a threat… it may cause the medications needed by Medicare and Medicaid recipients to stop being produced or demand would force them to go generic, perhaps making them cheaper for the American public in the long run.

Sen. Chuck Grassley (R-Iowa) has introduced a bill that would make it easier for the government to force a compromise. It would “allow the exclusion of individuals from working with the government even after they’ve left the company where the fraud occurred.” Is it any wonder none of the Big Pharma companies “responded to questions about their response to the government’s proposed enforcement actions”? Probably not.