Of the 373 settlements over those 25 years, 140 were federal settlements totaling $31.9 billion, and 233 were state settlements totaling $3.8 billion. GlaxoSmithKline and Pfizer reached the most settlements and paid the most in financial penalties – $7.9 billion and $3.9 billion, respectively.
Twenty-nine states and the District of Columbia reached at least one single-state settlement with a pharmaceutical company during the 25-year period studied. The most common violation was drug-pricing fraud against state Medicaid programs.
Another key finding is that both the number and size of settlements decreased significantly in 2014 and 2015. Just $2.4 billion in federal financial penalties were recovered in 2014-2015, less than one-third of the $8.7 billion in 2012-2013 and the lowest two-year total since 2004-2005.
The report explores several possible reasons for this drop in settlement activity. The possibilities include a decline in federal enforcement; a shift in the focus of federal prosecutions away from off-label marketing and toward other forms of illegal activity, asalluded to (PDF) by U.S. Department of Justice officials in 2012; changes in state Medicaid pharmaceutical reimbursement strategies; and shifts in industry marketing strategies.
“We don’t yet know why there were fewer and smaller settlements in the 2014 to 2015 period,” said Dr. Sammy Almashat, researcher with Public Citizen’s Health Research Group and lead author of the report.
The pharmaceutical industry’s $711 billion in global net profits from just one decade (2003-2012) dwarf the $35.7 billion in penalties recovered over the last quarter century.
“Breaking the law shouldn’t be profitable, especially not when patients’ health and lives are on the line,” said Dr. Sidney Wolfe, founder and senior adviser to Public Citizen’s Health Research Group.
The report’s authors conclude that federal and state governments need to ramp up enforcement and discuss several more effective strategies to deter future fraud.
“Time and time again, drug companies defraud American taxpayers while making billions off government-granted monopolies,” Sanders said in response to Public Citizen’s report.