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02-10-2012 | Article

Drug makers pay the price for overcharges and off-label marketing

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medwireNews: Pharmaceutical companies have paid out more than $ 10 billion dollars in fines to federal and state governments over the past 2 years, a watchdog group reports.

From November 2010 through July 2012, drug makers shelled out a total of $ 10.2 billion in financial penalties for settlements reached between the companies and federal and state governments, report Sammy Almashat and Sidney Wolfe from Public Citizen's Health Research Group in Washington, DC.

The fines were levied against the companies as settlements for violations that included willful overcharging of government-funded healthcare programs, aggressive marketing of drugs for off-label indications, and other illegal activities.

In the first half of 2012 alone, the federal government imposed fines of $ 5.0 billion, and states imposed $ 1.6 billion in penalties - both record totals, the authors note.

The fines continue a trend that Public Citizen has followed since 1991. In 2010, the non-profit group reported that pharmaceutical manufacturers had paid out nearly $ 20 billion since 1991, and that 75% of the settlements and penalties had occurred within the previous 5 years.

In one of the most prominent examples, GlaxoSmithKline (GSK) agreed in July 2012 to pay $ 1 billion in criminal fines for promoting the antidepressants paroxetine and buproprion for uses not approved by the US Food and Drug Administration, including off-label uses of the drugs for treating depression in children, obesity, anxiety, addiction, and attention-deficit hyperactivity disorder.

In addition, GSK was penalized for its failure to report "important clinical data" to the FDA about adverse events associated with the diabetes drug rosiglitazone.

Almashat and Wolfe report that the federal government settlements during the Obama administration netted nearly as much in penalties recovered as all similar actions in the previous 18 years combined.

They also found that whistleblowers accounted for 75% of all investigations, and 78% of the penalties levied during the study period.

"On a federal level, financial penalties still continue to pale in comparison to company profits and a parent company is only rarely excluded from participation in Medicare and Medicaid for the illegal activities, which endanger the public health and deplete already overstretched taxpayer-funded programs... Stronger legislation and more robust enforcement are needed on a federal and state level to deter future unlawful behavior," they conclude.

By Neil Osterweil, medwireNews reporter