Can you guess what industry paid the highest penalties for defrauding the U.S. government?

Billion-dollar shell game

How do you become the Number One industry in the category of defrauding the U.S. government?

You have to get to the office early and work hard at it every day!

You’ve also got to crush your competition! You actually have to be more fraudulent than defense contractors (don’t get me started on them!).

So in a recent Public Citizen report, what industry do you suppose EASILY powered right past defense contractors as the most brazen violator of the False Claims Act?

No contest. The drug industry made those arms traders look like schoolboy slackers.

Big numbers

Public Citizen reports that since 1991, drug companies have drawn False Claims Act penalties of nearly $20 billion. And the vast majority of those penalties occurred in just the past five years.

The biggest winner (or loser, your call) was Pfizer. They coughed up a settlement of more than $2 billion for one infraction — illegal marketing of Bextra, their now-defunct painkiller.

Three other companies joined Pfizer in the elite upper echelon of the Big Pharma Fraud Club: Eli Lilly, GlaxoSmithKline, and Schering-Plough. This Mt. Rushmore of shame paid out a combined $10.5 billion in fines over two decades.

One of the most common swindles involved Medicaid overcharging. Public Citizen found that some state Medicaid programs (which, in just about every state, are strapped for cash) overpaid providers as much as 12 TIMES the cost of a drug.

So when your tires blow out on a pothole that hasn’t been patched, or we can’t afford to gym classes in schools anymore, or we have to layoff police and firefighters because of budget cuts, you can thank Big Pharma for stealing the millions, no…probably billions…out of our pockets in Medicaid fraud.

Make the bite worse than the bark

In a press release, Public Citizen notes that current financial penalties are relatively small compared to drug company profits. So PC offers this solution: “Increased financial penalties and appropriate criminal prosecution of company leadership.”

“Appropriate criminal prosecution” refers specifically to off-label promotion of a drug, which can be prosecuted as a criminal offense. Because with off-label promotion, drug companies are not just being greedy, they’re also making things dangerous for any patient who that trusts his doctor.

You see, believe it or not, your doctor can still exercise some of his own judgment in prescribing a drug for you. In fact, he can even give you a drug to treat a condition for which the drug hasn’t been approved by the FDA. That’s between you and your doctor.

But a drug company is strictly forbidden from promoting a drug for an unapproved use. Because when a drug hasn’t been vetted for safe use for other health problems, it could put YOUR health at risk (even more than the normal FDA safety review does!).

Of course, this practice puts everyone at risk, but it sure does a great job of boosting drug company profits.

If a supplement company even mentions the name of a disease in its advertising, the brass can get warning letters and face prosecution. So what is it going to take to get rid of this very lop-sided double standard?

These drug giant CEOs and senior execs have been putting you, me and our loved ones at risk long enough. And it’s both criminal and insulting that they get off by writing relatively tiny checks — from the company’s account.

I say it’s time for a little Shawshank redemption…

Sources:
“Rapidly Increasing Criminal and Civil Monetary Penalties Against the Pharmaceutical Industry: 1991 to 2010” Public Citizens Health Research Group, 12/16/10, citizen.org
“When it Comes to Government Fraud, Health Care Now Tops Defense” Richard Knox, NPR, 12/17/10, npr.org