List of largest pharmaceutical settlements

Last updated

The following is a list of the 20 largest settlements reached between the United States Department of Justice and pharmaceutical companies from 2001 to 2012, ordered by the size of the total settlement. The settlement amount includes both the civil (False Claims Act) settlement and criminal fine. Glaxo's $3 billion settlement included the largest civil False Claims Act settlement on record, [1] and Pfizer’s $2.3 billion ($3.5 billion in 2022) settlement including a record-breaking $1.3 billion criminal fine. [2] Legal claims against the pharmaceutical industry have varied widely over the past two decades, including Medicare and Medicaid fraud, off-label promotion, and inadequate manufacturing practices. [3] [4] With respect to off-label promotion, specifically, a federal court recognized off-label promotion as a violation of the False Claims Act for the first time in Franklin v. Parke-Davis, leading to a $430 million settlement. [5]

YearCompanySettlementViolation(s)Product(s)Laws violated
(if applicable)
2012 GlaxoSmithKline [1] [6] $3 billion ($1B criminal, $2B civil)Criminal: Off-label promotion, failure to disclose safety data.
Civil: paying kickbacks to physicians, making false and misleading statements concerning the safety of Avandia, reporting false best prices and underpaying rebates owed under the Medicaid Drug Rebate Program 		Avandia (not providing safety data), Wellbutrin, Paxil (promotion of paediatric use), Advair, Lamictal, Zofran, Imitrex, Lotronex, Flovent, Valtrex False Claims Act, FDCA
2009 Pfizer [2] $2.3 billionOff-label promotion, kickbacks Bextra, Geodon, Zyvox, Lyrica False Claims Act, FDCA
2013 Johnson & Johnson [7] $2.2 billionOff-label promotion, kickbacks Risperdal, Invega, Nesiritide False Claims Act, FDCA
2012 Abbott Laboratories [8] $1.5 billionOff-label promotion Depakote False Claims Act, FDCA
2009 Eli Lilly [9] $1.4 billionOff-label promotion Zyprexa False Claims Act, FDCA
2001 TAP Pharmaceutical Products [10] $875 million Medicare fraud, kickbacks Lupron False Claims Act, Prescription Drug Marketing Act
2012 Amgen [11] $762 millionOff-label promotion, kickbacks Aranesp False Claims Act, FDCA
2010GlaxoSmithKline [12] $750 millionPoor manufacturing practices Kytril, Bactroban, Paxil CR, Avandamet False Claims Act, FDCA
2005 Serono [13] $704 millionOff-label promotion, kickbacks, monopolistic practices Serostim False Claims Act
2008 Merck [14] $650 millionMedicare fraud, kickbacks Zocor, Vioxx, Pepsid False Claims Act, Medicaid Rebate Statute
2007 Purdue Pharma [15] $601 millionOff-label promotion Oxycontin False Claims Act
2010 Allergan [16] $600 millionOff-label promotion Botox False Claims Act, FDCA
2010 AstraZeneca [17] $520 millionOff-label promotion, kickbacks Seroquel False Claims Act
2007 Bristol-Myers Squibb [18] $515 millionOff-label promotion, kickbacks, Medicare fraud Abilify, Serzone False Claims Act, FDCA
2002 Schering-Plough [19] $500 millionPoor manufacturing practices Claritin FDA Current Good Manufacturing Practices
2006 Mylan [20] $465 millionMisclassification under the Medicaid Drug Rebate Program EpiPen (epinephrine) False Claims Act
2006Schering-Plough [21] $435 millionOff-label promotion, kickbacks, Medicare fraud Temodar, Intron A, K-Dur, Claritin RediTabs False Claims Act, FDCA
2004 [22] Pfizer$430 millionOff-label promotion Neurontin False Claims Act, FDCA
2008 Cephalon [23] $425 millionOff-label promotion [23] Actiq, Gabitril, Provigil False Claims Act, FDCA
2010 Novartis [24] $423 millionOff-label promotion, kickbacks Trileptal False Claims Act, FDCA
2003AstraZeneca [25] $355 millionMedicare fraud Zoladex Prescription Drug Marketing Act
2004Schering-Plough [26] $345 millionMedicare fraud, kickbacks Claritin False Claims Act, Anti-Kickback Statute

See also

Related Research Articles

<span class="mw-page-title-main">False Claims Act</span> United States federal law

The False Claims Act (FCA) is an American federal law that imposes liability on persons and companies who defraud governmental programs. It is the federal government's primary litigation tool in combating fraud against the government. The law includes a qui tam provision that allows people who are not affiliated with the government, called "relators" under the law, to file actions on behalf of the government. This is informally called "whistleblowing", especially when the relator is employed by the organization accused in the suit. Persons filing actions under the Act stand to receive a portion of any recovered damages.

<span class="mw-page-title-main">Novartis</span> Swiss-American multinational pharmaceutical corporation

Novartis AG is a Swiss multinational pharmaceutical corporation based in Basel, Switzerland. Consistently ranked in the global top five, Novartis is one of the largest pharmaceutical companies in the world and was the fourth largest by revenue in 2022.

<span class="mw-page-title-main">GSK plc</span> British multinational pharmaceutical and biotechnology company

GSK plc is a British multinational pharmaceutical and biotechnology company with global headquarters in London. Established in 2000 by a merger of Glaxo Wellcome and SmithKline Beecham, GSK is the tenth largest pharmaceutical company and #294 on the 2022 Fortune Global 500, ranked behind other pharmaceutical companies China Resources, Sinopharm, Johnson & Johnson, Pfizer, Roche, AbbVie, Novartis, Bayer, and Merck Sharp & Dohme.

<span class="mw-page-title-main">Valdecoxib</span> Nonsteroidal anti-inflammatory drug

Valdecoxib is a nonsteroidal anti-inflammatory drug (NSAID) used in the treatment of osteoarthritis, rheumatoid arthritis, and painful menstruation and menstrual symptoms. It is a selective cyclooxygenase-2 inhibitor. It was patented in 1995.

<span class="mw-page-title-main">Fluticasone/salmeterol</span> Formulation used in the management of asthma and chronic obstructive pulmonary disease

Fluticasone/salmeterol, sold under the brand name Advair among others, is a fixed-dose combination medication containing fluticasone propionate and salmeterol. It is used in the management of asthma and chronic obstructive pulmonary disease (COPD). It is used by inhaling the medication into the lungs.

Many countries have measures in place to limit advertising by pharmaceutical companies.

In common law, a writ of qui tam is a writ through which private individuals who assist a prosecution can receive for themselves all or part of the damages or financial penalties recovered by the government as a result of the prosecution. Its name is an abbreviation of the Latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur, meaning "[he] who sues in this matter for the king as well as for himself."

TAP Pharmaceuticals was formed in 1977 as a joint venture between the two global pharmaceutical companies, Abbott Laboratories and Takeda Pharmaceutical Co. and was dissolved in 2008; its two most lucrative products were proton-pump inhibitor lansoprazole (Prevacid) and the prostate cancer drug, leuprorelin (Lupron). The intention of the joint venture was to get products that Takeda had discovered developed, approved, and marketed in the US and Canada.

The ethics involved within pharmaceutical sales is built from the organizational ethics, which is a matter of system compliance, accountability and culture. Organizational ethics are used when developing the marketing and sales strategy to both the public and the healthcare profession of the strategy. Organizational ethics are best demonstrated through acts of fairness, compassion, integrity, honor, and responsibility.

David Franklin is an American microbiologist and former fellow of Harvard Medical School who while employed by Parke-Davis filed the 1996 whistleblower lawsuit exposing their illegal promotion of Neurontin (gabapentin) for off-label uses. Franklin's suit, filed on behalf of the citizens of the United States under the qui tam provisions of US federal and state law, uncovered illegal pharmaceutical industry practices and created new legal precedent that resulted in a cascade of criminal convictions and civil and criminal penalties against Pfizer and several other pharmaceutical companies totalling more than $7 billion. Civil cases also followed Franklin v. Parke-Davis. Insurance companies, led by Kaiser Permanente, sued Pfizer for fraud and violation of the federal Racketeer Influenced and Corrupt Organizations Act; the Kaiser case settled in April 2014 after Pfizer's appeal at the US Supreme Court was rejected. Franklin v. Pfizer also spawned more than a thousand wrongful death (suicide) suits associated with use of Neurontin. Numerous books have addressed the social, economic and healthcare implications of Dr. Franklin's stance and actions. The settlement was the first off-label promotion settlement under the False Claims Act.

<span class="mw-page-title-main">ISTA Pharmaceuticals</span> US-based pharmaceutical company

ISTA Pharmaceuticals, Inc, was a US-based pharmaceutical company that specialized in ophthalmic pharmaceutical products and discovers, develops, and markets therapies for inflammation, ocular pain, glaucoma, allergy, and dry eye. ISTA was acquired by Bausch & Lomb, an eye care company, on March 26, 2012. Under the deal, Bausch & Lomb have agreed to pay $9.10 per share for ISTA, bringing the total value of the acquisition to $500 million. In 2012, Valeant Pharmaceuticals withdrew its $360 million offer.

Health care fraud includes "snake oil" marketing, health insurance fraud, drug fraud, and medical fraud. Health insurance fraud occurs when a company or an individual defrauds an insurer or government health care program, such as Medicare or equivalent State programs. The manner in which this is done varies, and persons engaging in fraud are always seeking new ways to circumvent the law. Damages from fraud can be recovered by use of the False Claims Act, most commonly under the qui tam provisions which rewards an individual for being a "whistleblower", or relator (law).

Pharmaceutical fraud involves activities that result in false claims to insurers or programs such as Medicare in the United States or equivalent state programs for financial gain to a pharmaceutical company. There are several different schemes used to defraud the health care system which are particular to the pharmaceutical industry. These include: Good Manufacturing Practice (GMP) Violations, Off Label Marketing, Best Price Fraud, CME Fraud, Medicaid Price Reporting, and Manufactured Compound Drugs. Examples of fraud cases include the GlaxoSmithKline $3 billion settlement, Pfizer $2.3 billion settlement, and Merck $650 million settlement. Damages from fraud can be recovered by use of the False Claims Act, most commonly under the qui tam provisions which rewards an individual for being a "whistleblower", or relator (law).

<i>Franklin v. Parke-Davis</i>

Franklin v. Parke-Davis is a lawsuit filed in 1996 against Parke-Davis, a division of Warner-Lambert Company, and eventually against Pfizer under the qui tam provisions of the False Claims Act. The suit was commenced by David Franklin, a microbiologist hired in the spring of 1996 in a sales capacity at Parke-Davis, a pharmaceutical subsidiary of Warner-Lambert. In denying the defendants' motion for summary judgment, the court for the first time recognized off-label promotion of drugs could cause Medicaid to pay for prescriptions that were not reimbursable, triggering False Claims Act liability. The case was also significant in exposing the degree to which publication bias impacts the randomized controlled studies conducted by pharmaceutical companies to test the efficacy of their products. Ultimately, the parties reached a settlement agreement of $430 million to resolve all civil claims and criminal charges stemming from the qui tam complaint. At the time of the settlement in May 2004, it represented one of the largest False Claims Act recoveries against a pharmaceutical company in U.S. history, and was the first off-label promotion settlement under the False Claims Act.

<span class="mw-page-title-main">Reuben Guttman</span>

Reuben A. Guttman, born 1959 in New York City, is an American attorney and a founding Partner of Guttman, Buschner & Brooks PLLC ("GBB"), a DC-based plaintiffs' firm His practice involves complex litigation and class actions. He has served as counsel in some of the largest recoveries under the False Claims Act. The International Business Times has called Guttman "one of the world's most prominent whistleblower attorneys," and he has been recognized as a Washingtonian Top Lawyer by Washingtonian Magazine.

Indivior is a specialty pharmaceuticals business. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. It is also listed on the NASDAQ Global Select Market.

Jean-Pierre Garnier is a French businessman, and a former chief executive of GlaxoSmithKline.

Marketing of off-label use is advertising the use of drugs for purposes not approved by the regional government. The practice is often illegal and has led to most of the largest pharmaceutical settlements after Franklin v. Parke-Davis, in which a court ruled off-label marketing a violation of the False Claims Act.

References

  1. 1 2 "GlaxoSmithKline to Plead Guilty and Pay $3 Billion to Resolve Fraud Allegations and Failure to Report Safety Data". justice.gov. 2 July 2012. Retrieved 25 August 2012.
  2. 1 2 "Justice Department Announces Largest Health Care Fraud Settlement in Its History". justice.gov. 2 September 2009. Retrieved 25 August 2012.
  3. ↑ Almashat, S et al. Rapidly Increasing Criminal and Civil Monetary Penalties Against the Pharmaceutical Industry: 1991 – 2010. Public Citizen’s Health Research Group. December 16, 2010
  4. ↑ Katie Thomas, Michael S. Schmidt (2 July 2012). "Glaxo Agrees to Pay $3 Billion in Fraud Settlement". The New York Times . Retrieved 25 August 2012.
  5. ↑ Lavoie, Denise (5 December 2007). "Drug Whistleblower Collects $24M". cbsnews.com. Retrieved 25 August 2012.
  6. ↑ formed in 2000 by merger of Glaxo Wellcome and SmithKline Beecham
  7. ↑ "Johnson & Johnson to Pay More Than $2.2 Billion to Resolve Criminal and Civil Investigations". justice.gov. 4 November 2013. Retrieved 5 March 2015.
  8. ↑ "Abbott Labs to Pay $1.5 Billion to Resolve Criminal & Civil Investigations of Off-label Promotion of Depakote". justice.gov. 7 May 2012. Retrieved 25 August 2012.
  9. ↑ "Eli Lilly and Company Agrees to Pay $1.415 Billion to Resolve Allegations of Off-label Promotion of Zyprexa". justice.gov. 15 January 2009. Retrieved 25 August 2012.
  10. ↑ "TAP Pharmaceutical Products Inc. and Seven Others Charged with Health Care Crimes; Company Agrees to Pay $875 Million to Settle Charges". justice.gov. 3 October 2001. Retrieved 25 August 2012.
  11. ↑ "Amgen Inc. Pleads Guilty to Federal Charge in Brooklyn, NY.; Pays $762 Million to Resolve Criminal Liability and False Claims Act Allegations". justice.gov. 19 December 2012. Retrieved 20 December 2012.
  12. ↑ "GlaxoSmithKline to Plead Guilty & Pay $750 Million to Resolve Criminal and Civil Liability Regarding Manufacturing Deficiencies at Puerto Rico Plant". justice.gov. 26 October 2010. Retrieved 25 August 2012.
  13. ↑ "Serono to Pay $704 Million for the Illegal Marketing of AIDS Drug". justice.gov. 17 October 2005. Archived from the original on 2 November 2013. Retrieved 25 August 2012.
  14. ↑ "Merck to Pay More than $650 Million to Resolve Claims of Fraudulent Price Reporting and Kickbacks". justice.gov. 7 February 2008. Retrieved 25 August 2012.
  15. ↑ "Office of the Deputy Attorney General" (PDF). justice.gov. 7 November 2008. Retrieved 25 August 2012.
  16. ↑ "Allergan Agrees to Plead Guilty and Pay $600 Million to Resolve Allegations of Off-Label Promotion of Botox®". justice.gov. 1 September 2010. Retrieved 25 August 2012.
  17. ↑ "Pharmaceutical Giant AstraZeneca to Pay $520 Million for Off-label Drug Marketing". justice.gov. 27 April 2010. Retrieved 25 August 2012.
  18. ↑ "Bristol-Myers Squibb to Pay More Than $515 Million to Resolve Allegations of Illegal Drug Marketing and Pricing". justice.gov. 28 September 2007. Retrieved 25 August 2012.
  19. ↑ "$500 million fine for Schering-Plough". The Philadelphia Inquirer . 18 May 2002. Retrieved 25 August 2012.
  20. ↑ Mole, Beth (October 7, 2016). "For ripping off Medicaid, EpiPen maker Mylan pays Feds $465 million". Ars Technica. Retrieved December 3, 2016.
  21. ↑ "Schering to Pay $435 Million for the Improper Marketing of Drugs and Medicaid Fraud" (PDF). justice.gov. 29 August 2006. Retrieved 25 August 2012.
  22. ↑ "Warner-Lambert to Pay $430 Million to Resolve Criminal & Civil Health Care Liability Relating to Off-Label Promotion". usdoj.gov. United States Department of Justice. 13 May 2004. Retrieved 30 July 2017.
  23. 1 2 "Biopharmaceutical Company, Cephalon, to Pay $425 Million & Enter Plea to Resolve Allegations of Off-Label Marketing". U.S. Department of Justice. 29 September 2008. Retrieved 30 July 2017.
  24. ↑ "Novartis Pharmaceuticals Corporation, a US subsidiary of Novartis AG, reaches settlement agreement with US Attorney's Office". novartis.com. 30 September 2010. Archived from the original on 17 October 2013. Retrieved 25 August 2012.
  25. ↑ Petersen, Melody (21 June 2003). "AstraZeneca Pleads Guilty In Cancer Medicine Scheme". nytimes.com. Retrieved 25 August 2012.
  26. ↑ "Schering-Plough to Pay $345 Million to Resolve Criminal and Civil Liabilities for Illegal Marketing of Claritin". justice.gov. 30 July 2004. Retrieved 25 August 2012.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.