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Pharmaceutical Industry Leaders Exhibit Propensity for Fraud

Fraudulent practices exhibited by pharmaceutical companies have seemingly become inevitable ploys instituted by the industry to generate more leverage and revenue. Subsequently, the most prominent drugmakers are among the worst offenders. The past decade has witnessed industry leaders pay approximately $8 billion in fines for their efforts to defraud Medicare and Medicaid. However, their propensity for neglect is diluted because they are often the sole suppliers of critical products. As a result, companies like Pfizer and Merck are allowed to remain in business with the federal government.

Having been established in 1849, Pfizer has dedicated approximately 163 years to the discovery and development of new, and better, ways to prevent and treat diseases. In providing everything from penicillin to expert advice, Pfizer has improved the health and well being of patients around the world. Those without prescription coverage take comfort in knowing that Pfizer gives them access to important medications that are otherwise unobtainable.

Similar to that of Pfizer, are the goals established by Merck. As the second largest healthcare company in the world, Merck and it’s subsidiaries are global leaders dedicated to improving health and well-being. Founded approximately 160 years ago, Merck has pioneered new ways to treat and prevent illness – from the discovery of vitamin B1, to the first measles vaccine, to cold remedies and antacids, to the first statins to treat high cholesterol.

It goes without saying, Pfizer and Merck are the sole providers of several necessary medications, many of which patients could not live without. However, recent years have witnessed prominent companies such as these abuse their power. Pfizer has already paid close to $3 billion in fines since 2002 and entered into three corporate integrity agreements with the Department of Health and Human Services for their involvement in fraudulent practices. The 2009 settlement was for improperly promoting the use of drugs for purposes other than those for which they were approved by the government.

Merck, a company with similar prestige, paid out nearly $1.6 billion in fines since 2008. According to Medicare and Justice Department records, the heft fines were leveled at Merck because of their neglect to provide the government with the appropriate rebates. Merck’s 2008 settlement involved claims the company paid illegal kickbacks to health care providers in exchange for prescribing its drugs.

Due to their propensity for fraud over the years, these industry leaders are fighting attempts by Congress to exclude them from government business. However, government investigators are fighting an uphill battle with their backs against the wall. They can exclude influential 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. Subsequently, these companies are the sole providers of medications that are crucial for the survival of many patients.

Therefore, government officials find themselves in a variable catch 22. If they ban pharmaceutical companies from providing medications to Medicaid and Medicare beneficiaries, they are eliminating a valuable source of healthcare. However, if they impose corporate integrity agreements, as they have in the past, companies often break them.

“We’re seeing some of the big companies a second and third time,” said Gregory Demske, assistant inspector general for legal affairs for Health and Human Services. “The corporate integrity agreement is not sufficient to deter further misconduct.” Subsequently, previous years have witnessed government officials begin to crack down on fraud.

In an attempt to rid pharmaceutical companies of such transgressions, the government announced that they would begin to target specific individuals, rather than the entire company. Doing so would potentially eliminate fraud while maintaing product availability.

A bill introduced by Sen. Chuck Grassley has attempted to make it easier for the government to find a middle ground. According to the bill, the law now forces “the inspector general to use all-or-nothing, mandatory exclusion penalties against corporations that have committed fraud.” If the bill passes, it would allow the exclusion of individuals from working with the government even after they’ve left the company where the fraud occurred.

Do I Have a Fraud and Unfair Business Practice Lawsuit?

The trial lawyers at The Senators (Ret.) Firm, LLP have decades of experience navigating through complex legislative and regulatory issues and litigating high stakes cases all over the nation. Our law firm focuses on the representation of plaintiffs in fraud and unfair business practice lawsuits. We are currently accepting new cases in all 50 states.

If you or a loved one has been the victim of fraud or unfair business practices, you may be entitled to financial compensation. For a free case review, please click the link below or call toll free 24 hrs/day 1-800-773-0849.

Categories: Product Liability, Fraud
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