Do you believe what drug companies advertise?

Drug giants fined $11bn for criminal wrongdoing

Fines are not enough to reform drug industry, warn lawyers


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 crimina

l 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,

totaling 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”.


Following GSK’s admission that it had withheld safety data

about its best-selling diabetes drug Avandia, the company pledged

to make more clinical trial information available.

But the pledge has “disturbing exceptions”,

according to Mr Outterson, and in any case is made under

the corporate integrity agreement, which expires in five years.


Trust in the industry among doctors has fallen so low that they

dismiss clinical trials funded by it, even when the trials have been conducted

with scientific rigour, according to a second paper in the journal

by researchers at Brigham and Women’s Hospital, Boston.

This could have serious implications because most

medical research is funded by the drug industry and

“if physicians are reluctant to trust all such research,

it could hinder the translation of … research into practice,

” said Aaron Kesselheim, who led the study.


Andrew Witty, the chief executive of GSK, said at the time of the $3bn

settlement last July that it had resolved “difficult, long-standing matters”

for the company and that there had since been a

“fundamental change in procedures” including the removal

of staff engaged in misconduct and changes to incentive payments.


The Association of the British Pharmaceutical Industry

said practices in the industry had improved and more changes to

“build greater levels of trust” would be made.

The UK Medicines and Healthcare Products Regulatory Agency

said it monitored the conduct of companies and took

“appropriate action” when it uncovered malpractice.





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