Pharmaceutical Marketing - Regulation and Fraud

Regulation and Fraud

See also: List of Largest Pharmaceutical Settlements See also: List of off-label promotion pharmaceutical settlements

In the United States, marketing and distribution of pharmaceuticals is regulated by the Federal Food, Drug, and Cosmetic Act and the Prescription Drug Marketing Act, respectively. Food and Drug Administration (FDA) regulations require all prescription drug promotion to be truthful and not misleading, based on "substantial evidence or substantial clinical experience", to provide a "fair balance" between the risks and benefits of the promoted drug, and to maintain consistency with labeling approved by the FDA. The FDA Office of Prescription Drug Promotion enforces these requirements.

Antipsychotic drugs are now the top-selling class of pharmaceuticals in America, generating annual revenue of about $14.6 billion. Large pharmaceutical companies got behind the development of the drugs in the 1990s, when they were "still seen as treatments for the most serious mental illnesses, like hallucinatory schizophrenia, and recast them for much broader uses". Drugs such as Abilify and Geodon were given to a broad range of patients, from preschoolers to octogenarians. In 2010, more than a half-million youths took antipsychotic drugs, and one-quarter of nursing-home residents have used them. Yet the government warns that the drugs may be fatal to some older patients and have unknown effects on children.

Every major company selling the drugs — Bristol-Myers Squibb, Eli Lilly, Pfizer, AstraZeneca and Johnson & Johnson — has either settled recent government cases, under the False Claims Act, for hundreds of millions of dollars or is currently under investigation for possible health care fraud. Following charges of illegal marketing, two of the settlements set records last year for the largest criminal fines ever imposed on corporations. One involved Eli Lilly’s antipsychotic Zyprexa, and the other involved Bextra. In the Bextra case, the government also charged Pfizer with illegally marketing another antipsychotic, Geodon; Pfizer settled that part of the claim for $301 million, without admitting any wrongdoing.

The following is a list of the four largest settlements reached with pharmaceutical companies from 1991 to 2012, rank ordered by the size of the total settlement. 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.

Company	Settlement	Violation(s)	Year	Product(s)	Laws allegedly violated (if applicable)
GlaxoSmithKline	$3 billion	Off-label promotion/failure to disclose safety data	2012	Avandia/Wellbutrin/Paxil	False Claims Act/FDCA
Pfizer	$2.3 billion	Off-label promotion/kickbacks	2009	Bextra/Geodon/Zyvox/Lyrica	False Claims Act/FDCA
Abbott Laboratories	$1.5 billion	Off-label promotion	2012	Depakote	False Claims Act/FDCA
Eli Lilly	$1.4 billion	Off-label promotion	2009	Zyprexa	False Claims Act/FDCA