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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Merck agreed to pay a fine of $950 million related to the illegal promotion of the painkiller Vioxx, which was withdrawn from the market in 2004 after studies found the drug increased the risk of heart attacks.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

5 years ago

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

Bhagavan ps

5 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%.


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