The Real Price of Big Pharma's Huge Fines

There's a long, detailed article up over at Bloomberg on the recent run of huge fines for off-label promotion of drugs. Pfizer (PFE), Lilly (LLY), Bristol-Meyers Squibb (BMY), and Schering-Plough (SGP) all get mentioned in great detail.

And there's a key point from the whole depressing thing: the reason that marketing departments do this kind of thing is that it makes money. Even after you pay a billion dollars in fines, you can still come out ahead, and you might not even have to pay the fines. It's just being put down as a cost of doing business - it's a speeding ticket, and it's being weighed against the cost of driving under the legal limit.

But there's no way that our industry will gain - or regain - respect as long as we operate this way. Have the people involved priced that out as well?

Comments

[idlut:]

How true!!!! The old saying in the industry 20 years ago was that Pfizer never let science get in the way of marketing. Afterall, if you had to send out a dear dr letter, big deal as you had already captured 50-100M more in sales with illegal promotion. This has been happening too frequently and the saying is probably now "Don't let science or patient safety get in the way of marketing".. Even small companies like Cepahlon paid close to $500 M US for illegal marketing of two drugs, one of them being ACTIQ (which is fentanyl, the most potent opioid in existence). Perhaps a simple solution is for mre regulatory oversight, and a ban on DTC ads.

Nov 10 08:01 AM

[User 450353:]

The real solution is to put some corporate officers in jail--when monetary penalties are meaningless we need to look at other forms of control--and remember lly corporate officers never missed a lick on remuneration even while the corporation paid $1 Billion+ in fines.

Nov 10 08:53 AM

[policy_redux:]

So true Mr. Lowe, so true. While criminal penalties would definitely have an impact, most people would think the penalty disproportionate. Would you do this in other heavy regulated industries, say oil or communications? Until the perverse incentive is removed (profit) you won't deal with the issue at hand. I liked the fact that the Pfizer settlement was calculated as a percent of off label sales (done liberally b/c of multiple CIA infractions). The heavier the fines and more protections for whistleblowers are the best solution.

Nov 10 09:39 AM

[pharmaveteran:]

DDMAC warning letters from FDA are always addressed to the CEO, but merely admonish the company to take corrective actions. If those selfsame letters carried threats for a fine and/or imprisonment (let's say 5 years/$250,000 for starters), they might get more attention.

Nov 10 10:47 AM

[Suzit:]

How about 5 years or fine equal to total compensation received for the past 5 years?

After the first couple of convictions, everyone would find motivation.

Nov 10 01:10 PM

[Buckeye Jim:]

How about removing the "off-label" promoted drugs off Medicare/Medicaid formularies? This is the ultimate wake-up call!

Nov 10 11:54 PM