Citizens' Issues
Big pharma’s big fines

The government has fined drug companies billions of dollars for illegally promoting drugs for unapproved uses. Here's a closer look at six of the most recent major fraud fines

On Monday, the Department of Justice announced that drug company GlaxoSmithKline agreed to pay a $3 billion fine, the largest health care fraud fine in the history of the United States. This fine is just the latest in a string of drug company penalties for improper promotion of drugs for "off-label," or unapproved, uses. Here we take a look at six recent multi-million dollar fines that drug companies have agreed to pay for inappropriately, and in some cases illegally, promoting prescription drugs.

Eli Lilly
JAN 2009

Eli Lilly was fined $1.42 billion to resolve a government investigation into the off-label promotion of the anti-psychotic Zyprexa. Zyprexa had been approved for the treatment of certain psychotic disorders, but Lilly admitted to promoting the drug in elderly populations to treat dementia. The government also alleged that Lilly targeted primary care physicians to promote Zyprexa for unapproved uses and "trained its sales force to disregard the law."


SEPT 2009


Pfizer was fined $2.3 billion, then the largest health care fraud settlement and the largest criminal fine ever imposed in the United States. Pfizer pled guilty to misbranding the painkiller Bextra with "the intent to defraud or mislead", promoting the drug to treat acute pain at dosages the FDA had previously deemed dangerously high. Bextra was pulled from the market in 2005 due to safety concerns. The government alleged that Pfizer also promoted three other drugs illegally: the anti-psychotic Geodon, an antibiotic Zyvox, and the anti-epileptic drug Lyrica.

APRIL 201o



AstraZeneca was fined $520 million to resolve allegations that it illegally promoted the anti-psychotic drug Seroquel. The drug was approved for treating schizophrenia and later for bipolar mania, but the government alleged that AstraZeneca promoted Seroquel for a variety of unapproved uses, such as aggression, sleeplessness, anxiety, and depression. AstraZeneca denied the charges but agreed to pay the fine to end the investigation.


NOV 2011


Merck agreed to pay a fine of $950 million related to the illegal promotion of the painkiller Vioxx, which was withdrawn from the market in 2004 after studies found the drug increased the risk of heart attacks. The company pled guilty to having promoted Vioxx as a treatment for rheumatoid arthritis before it had been approved for that use. The settlement also resolved allegations that Merck made false or misleading statements about the drug's heart safety to increase sales.

MAY 2012

Abbott was fined $1.5 billion in connection to the illegal promotion of the anti-psychotic drug Depakote. Abbott admitted to having trained a special sales force to target nursing homes, marketing the drug for the control of aggression and agitation in elderly dementia patients. Depakote had never been approved for that purpose, and Abbott lacked evidence that the drug was safe or effective for those uses. The company also admitted to marketing Depakote to treat schizophrenia, even though no study had found it effective for that purpose.

JULY 2012

GlaxoSmith Kline agreed to pay a fine of $3 billion to resolve civil and criminal liabilities regarding its promotion of drugs, as well as its failure to report safety data. This is the largest health care fraud settlement in the United States to date. The company pled guilty to misbranding the drug Paxil for treating depression in patients under 18, even though the drug had never been approved for that age group. GlaxoSmithKline also pled guilty to failing to disclose safety information about the diabetes drug Avandia to the FDA.


Source: The Department of Justice.





R Vijayaraghavan

4 years ago

More scandals and fines like this will surely help Obama bring down the US budget deficit. Haha

Bhagavan ps

4 years ago

The saying:
"Small is beautiful" is true.

It had been my experience in the drug selection meetings that doctor's always talk of and support big popular companies in the guise of the term 'Reputed' companies to justify their selection on quality basis, as if these companies are no wrong doers.

My argument always has been not to go by popularity or by market drive but to evaluate the product in terms of generic information, its market standing and production and testing history and accept only the time tested ones and strictly avoid 'kids tendency' to chew what ever that comes new.

Using the drug for unapproved purpose is dangerous.

Hence, extra precaution by the doctors is very much required in the interest of the public health.

Interest rate hurting; RBI should cut rate gradually says Kamath

According to the ICICI Bank chairman interest rate is hurting the common man and that's what is translating into lack of demand and a pressure in terms of the corporates

New Delhi: High interest rate is hurting the common man and the Reserve Bank of India (RBI) should cut interest rate gradually to spur economic growth, ICICI Bank Chairman KV Kamath has said, reports PTI.

"I would think that we cannot dismantle rate which is very high. We have to do it gradually ... to kick-start demand at the hands of retails individual that's where large part of growth would come from," Kamath said in an interview to private news channel CNBC TV18.

RBI raised interest rates 13 times between March, 2010 and October 2011 to stem rising inflation.

"But, let me take one issue which I think is really the cause of a large part of what is perceived as a slowdown. And that is interest rates. The interest rate, where it is today, is hurting the common man. It is hurting the lay individual," he said.

"And that's what is translating into lack of demand and a pressure in terms of the corporates," he added.

However, inflationary pressure weighed high on RBI's governor mind leading to status quo of rate in the latest monetary policy review last month.

While the short-term lending rate (repo) was kept unchanged at 8%, the CRR, portion of deposits banks are required to park with RBI, stood at 4.75%.

The decision of RBI came at a time, when GDP growth hit a nine-year low at 6.5% in 2011-12.

Kamath said, "global interest rates are low. Our inflation rate consequent to various things remains high. I guess we need to make sure that we understand what is happening in a global context."

The wholesale inflation was 7.55% in May. At the retail level, the Consumer Price Index (CPI) inflation for May was 10.36%.


GlaxoSmithKline’s crooked behaviour: Norm or exception?

GlaxoSmithKline has pleaded guilty to criminal charges, and agreed to pay $3 billion in fines for various sins. Well, GSK is not alone. GSK has been caught doing what all pharma companies  do most of the time, as I have been warning for decades

 “Power corrupts. Knowledge is power. Study hard. Be evil.”— Anon

This seems to be the hot news in the US today. But for me this is no news at all. This happens with all companies and all drugs all the time. I have been warning people about this for decades. I feel happy today that many of my detractors will feel bad that a governmental agency has been able to spot this fraud! Read the news as it is below:

Washington—Global healthcare giant GlaxoSmithKline LLC (GSK) agreed to plead guilty and to pay $3 billion to resolve its criminal and civil liability arising from the company’s unlawful promotion of certain prescription drugs, its failure to report certain safety data, and its civil liability for alleged false price reporting practices, the Justice Department announced today. The resolution is the largest health care fraud settlement in US history and the largest payment ever by a drug company.

GSK agreed to plead guilty to a three-count criminal information, including two counts of introducing misbranded drugs, Paxil and Wellbutrin, into interstate commerce; and one count of failing to report safety data about the drug Avandia to the Food and Drug Administration (FDA). Under the terms of the plea agreement, GSK will pay a total of $1 billion, including a criminal fine of $956,814,400 and forfeiture in the amount of $43,185,600. The criminal plea agreement also includes certain non-monetary compliance commitments and certifications by GSK’s US president and board of directors. GSK’s guilty plea and sentence is not final until accepted by the US district court.

What makes this interesting are the revelations further of what GSK has been doing which again is what all companies do but, let us see it from the source.

“GSK paid a speaker to talk to an audience of doctors and paid for the meal or spa treatment for the doctors who attended.”

“The United States contends that GSK paid millions of dollars to doctors to speak at and attend meetings, sometimes at lavish resorts, at which the off-label uses of Wellbutrin were routinely promoted and also used sales representatives, sham advisory boards, and supposedly independent Continuing Medical Education (CME) programs to promote Wllbutrin for these unapproved uses.”

In the past I had written about a good book “The truth about drug companies—How they deceive the public and what to do about it” by the former editor of the prestigious New England Journal of Medicine, Marcia Angell. She was the editor for 20 years and before that her husband, Relman, was there for 20 years. Both of them are now fighting the drug company menace in the USA. This book will let the reader have all the inside dealings of the drug lobby to sell their wares even when they know that the drugs that they were going to launch could kill many people. They do not want their share holders to lose their money. Here is one case in the open now. GSK was fully aware that the glitazone that they were going to release to the market could result in heart attacks in the recipient but they wanted to make enough money before that comes out in the open. Obviously, for them patient deaths were just statistics but their profit was sacrosanct!

The said company was well aware of the dangers of administering anti-depressants to children below the age of 18. They not only used dubious methods to promote the drug for depression in those below 18 years of age but they invented new indications like attention disorder, etc in children to sell the drugs. Antidepressants in children could increase their suicidal tendency! In her beautiful book “Dementia—a crime against mankind” by Elizabeth Grace Jackson, a professor of psychiatry in the US Navy, she gives us the dangers of antidepressants in general and shows how the epidemic of dementia these days is due to abuse and overuse of psychiatric drugs!

The other big criminal act by the drug companies is to sponsor the so called Continued Medical Education (CME) for doctors. It should instead be called “Continuing Brain washing of Doctors” by drug companies (CBD). The scenario is the same in India. Of course, we ape the Americans in every sphere of human activity, more so in medicine.  You have now realized what the receptionist means when she tells you to come after the doctor has returned from the conference. John Ioannidis MD, DSc from Stanford University is an expert in finding the loopholes in our medical system. His recent paper “Are medical Conferences useful?” in the prestigious JAMA (JAMA. 2012;307:1257-1258) gives the following facts about conferences, which I call as CBDs.

“Do medical conferences serve any purpose? In theory, these meetings aim to disseminate and advance research, train, educate, and set evidence-based policy. Although these are worthy goals, there is virtually no evidence supporting the utility of most conferences. Conversely, some accumulating evidence suggests that medical congresses may serve a specific system of questionable values that may be harmful to medicine and health care. Power and influence appear plentiful in many of these meetings. Not surprisingly, the drug, device, biotechnology, and health care–related industries make full use of such opportunities to engage thousands of practicing physicians. Lush exhibitions and infiltration of the scientific program through satellite meetings or even core sessions are common avenues of engagement. Although many meetings require all speakers to disclose all potential conflicts, the majority of speakers often have numerous conflicts, as is also demonstrated in empirical evaluations of similar groups of experts named on authorship lists of influential professional society guidelines.”

“Meetings may also create a branding system that builds the reputations of scientists working in the field and promotes herding after elevated prestigious opinion leaders.  Opinion leaders are experts whose valued utterances can exercise wide influence regardless of, in the absence of, or even against evidence. Gaining the podium for the plenary presentation or important sessions at a major meeting confers prestige, even though there is little safeguard that what these featured speakers say has any value and quality. Each professional society and organization creates its cadre of leaders, with meetings making these leaders visible to the members who usually participate passively by listening. Given the dynamics of large professional societies and conferences, leadership is sometimes judged not on scientific merit, hard work, and originality of thought but rather on the ability to navigate power circles. Some young scientists may be even discouraged to think that merit, hard work, and originality of thought is what counts. Instead, they may struggle to become better positioned within influential societies, with the hope that they will some day gain a spot on the podium of the specialty arena.”

One of my friends, an industrialist, had recently gone to Singapore for a cruise. To his wife’s surprise 98% of the passengers were Indian. She was very proud of our country to know how rich our people were. Next morning during breakfast she had a group of ladies talking to her. She found out that all of them in the ship were from one city in India and they were all doctors and their spouses! The cruise was booked by one drug company in return for the favours done! My friend’s wife had a shock of her life. She has not been seeing doctors for minor complaints ever since!

Instrument companies do not lag behind either. For each cardiac stent inserted for example the company budgets a small amount of $500 as doctors’ hospitality. The manufacturing cost is just about $10. The company might make a small profit of just $1490 or so per stent! This assessment of mine might be subject to revision recently! All that glitters is not gold in the field of human healing. Are you now happy that medical arena is one big business where profit is the ONLY motto irrespective of consequences based on the corporate principle of Bernard Mandeville, Adam Smith’s teacher. Long live mankind on tender loving care of good humane doctors who have not fallen prey to this yet. They have lots of temptations. I am happy to let you know that there are many such good souls who are not hard to find if you look carefully even today.

 “Yes! Finally captured Martha Stewart. You know, with all the massive and almost completely unpunished fraud perpetrated on the American public by such companies as Enron, Global Crossing, Tyco and Adelphia, we finally got the ringleader. Maybe now we can lower the nation's terror alert to periwinkle.”— Jon Stewart.

(Professor Dr BM Hegde, a Padma Bhushan awardee in 2010, is an MD, PhD, FRCP (London, Edinburgh, Glasgow & Dublin), FACC and FAMS. He is also editor-in-chief of the Journal of the Science of Healing Outcomes, chairman of the State Health Society’s Expert Committee, Govt of Bihar, Patna. He is former vice-chancellor of Manipal University at Mangalore and former professor for cardiology of the Middlesex Hospital Medical School, University of London. Prof Dr Hegde can be contacted at [email protected])



Narain Jagirdar

4 years ago

Almost all pharma companies across the world are perhaps guilty of such practices, for they go under the name of marketing.The US is the mother country for birth of these practices and if one company is pulled up, it doesn't mean rule of law works there...this is an exception. The Pharmaceutical Manufacturers Association in the US is an extremely strong and a rich lobby. A similar practice in the case of another company might have got regularized of which we are not aware.

Adi Daruwalla

4 years ago

Education corrupts and business education corrupts absolutely !!

P M Ravindran

4 years ago

That's the difference between actual rule of law in an actual democracy in US and the farce being perpetrated in a fraud democracy in India in the name of rule of law!

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