Healthcare Revisited -Legal Factors in Healthcare Costs (con’t)

Healthcare Revisited –Legal Factors in Healthcare Costs (con’t)

The following is a list of some of the largest settlements reached between the United States Department of Justice and pharmaceutical companies from 1991 to 2012, ordered by the size of the total settlement.”

YearCompanySettlementViolation(s)Product(s)Laws allegedly violated
(if applicable)
2012GlaxoSmithKline[1][6]$3 billion ($1B criminal, $2B civil)Criminal: Off-label promotion, failure to disclose safety data.Avandia (not providing safety data), Wellbutrin,False Claims Act/FDCA
Civil: paying kickbacks to physicians, making false and misleadingPaxil (promotion of paediatric use), Advair,
statements concerning the safety of Avandia, reporting false bestLamictal, Zofran,
prices and underpaying rebates owed under the Medicaid Drug Rebate ProgramImitrex, Lotronex,
 Flovent, Valtrex;
2009Pfizer[2]$2.3 billionOff-label promotion/kickbacksBextra/Geodon/False Claims Act/FDCA
2013Johnson & Johnson[7]$2.2 billionOff-label promotion/kickbacksRisperdal/Invega/False Claims Act/FDCA
2012Abbott Laboratories[8]$1.5 billionOff-label promotionDepakoteFalse Claims Act/FDCA
2009Eli Lilly[9]$1.4 billionOff-label promotionZyprexaFalse Claims Act/FDCA
2001TAP Pharmaceutical Products[10]$875 millionMedicare fraud/kickbacksLupronFalse Claims Act/
Prescription Drug Marketing Act
2012Amgen[11]$762 millionOff-label promotion/kickbacksAranespFalse Claims Act/FDCA
2010GlaxoSmithKline[12]$750 millionPoor manufacturing practicesKytril/Bactroban/False Claims Act/FDCA
Paxil CR/Avandamet
2005Serono[13]$704 millionOff-label promotion/SerostimFalse Claims Act
kickbacks/monopoly practices

The Largest drug-related class action settlement was in 2000

“Fen-Phen diet drugs $3.8 billion

In 2000, a federal judge in Philadelphia approved a $3.75 billion settlement over a diet drug known as fen-phen that had been associated with potentially fatal heart valve damage. Six million people reportedly used fen-phen, sold by American Home Products, before it was pulled from the market in 1997. The settlement provides up to $1.5 million to users, depending on their injuries and how long they used the drug.”

“News flash, just announced by far the largest settlement offer to date and this is for only one drug and one company involved in the Opioid Crisis:                             The maker of OxyContin, Purdue Pharma, and its owners, the Sackler family, are offering to settle more than 2,000 lawsuits against the company for $10 billion to $12 billion. The potential deal was part of confidential conversations and discussed by Purdue’s lawyers at a meeting in Cleveland last Tuesday, Aug. 20, (2019), according to two people familiar with the mediation.

Brought by states, cities, and counties, the lawsuits — some of which have been combined into one m massive caseallege the company and the Sackler family are responsible for starting and sustaining the opioid crisis.

Additional Update: In November 2019 it was announced that the current offer to settle the Opioid Class action was now at $50 Billion for the two largest manufacturers of the product!

The point is that in the long run all of these costs end up being passed along to the consumer in the form of higher prices (you might say an added tax).