Are Drug Companies Becoming Less Law-Abiding?

Alex Chernavsky drew my attention to a report of the giant fines assessed drug companies for fraudulent marketing. For example,

Merck agreed to pay a fine of $950 million related to the illegal promotion of the painkiller Vioxx, which was withdrawn from the market in 2004 after studies found the drug increased the risk of heart attacks. The company pled guilty to having promoted Vioxx as a treatment for rheumatoid arthritis before it had been approved for that use. The settlement also resolved allegations that Merck made false or misleading statements about the drug’s heart safety to increase sales.

Fines, of course, are supposed to reduce bad behavior. Here are the fines by year:

  • 2009: 2 fines
  • 2010: 1 fine
  • 2011: 1 fine
  • 2012: 5 fines

This pattern does not suggest the fines are working. Drug companies, of course, are very big. I would like to see cross-industry comparisons: which industries pay the most in fines per dollar of revenue?


6 Replies to “Are Drug Companies Becoming Less Law-Abiding?”

  1. Sheesh, this pattern suggests that the fines aren’t really being issued… Only 9fines over 4 years for fraudulent marketing implies to me that their definition of fraudulent is pretty damn weak. “Demonstrated to be safe” is fraudulent in all cases.

    Seth: I don’t know if these are all the fines. I think they are all the giant fines.

  2. Seth: These revelations are not new. It is becoming common knowledge that drug development and testing has for years been characterized by conflicts of interest and outright corruption. Marketing practices are particularly egregious.

    Regulation of the industry is weak to the point of scandal because of long-standing regulatory capture at least as bad as what has occurred in the banking industry. We have essentially the same problem in the broader medical care industry in the USA. The problems are unlikely to be resolved until a way is found to eliminate, or at least temper, the profit motive in these industries.

  3. PS – Readers of your blog concerned about ethics in medicine, pharma and related matters (such as addressed in your post) may be interested in these two blogs by Dr. Howard Brody and Dr. Roy Poses, respectively.
    Hooked: Ethics, Medicine, and Pharma (Dr. Howard Brody)
    Updates and Commentary related to HOOKED: ETHICS, THE MEDICAL PROFESSION, AND THE PHARMACEUTICAL INDUSTRY, by Howard Brody, MD, PhD (Rowman and Littlefield, January, 2007)
    Health Care Renewal (Dr. Roy Poses)
    Addressing threats to health care’s core values, especially those stemming from concentration and abuse of power. Advocating for accountability, integrity, transparency, honesty and ethics in leadership and governance of health care.


  4. looking at the budget of the FDA for enforcement might also be important. maybe they are not violating the law any more or less than normal, but the FDA has more money for enforcement.

  5. I’ve definitely seen this trend going on for a while, it’s similar to the banking community. At some point does someone have to go to jail?

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