Why Big Pharma Won't Stop Breaking the Law

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Policy Shop Blog / Demos

Why Big Pharma Won't Stop Breaking the Law

Did you hear that America's biggest drugmaker just agreed to one of the largest criminal and civil settlements in U.S. history? No, you probably didn't -- because news of Johnson & Johnson's $2.2 billion penalty for illegally marketing one of its drugs was buried today in the business section.

Why is a major crime by such a large pharmaceutical company a ho-hum news story? Because it's become a routine one. Big Pharma has been caught breaking the law again and again in recent years, paying gigantic penalities. Before this most recent case, Johnson & Johnson had settled 14 separate cases with the government since 1991, paying a total of $2.33 billion in penalties, according to a report last year by Public Citizen. Nine of these settlements occurred between 2010 and 2012. 

"You'd think that some Big Pharma execs would be serving prison terms by now. Yet despite 303 settlements with the government over the past two decades, not a single top executive has gone to prison, much less faced criminal prosecution."

And Johnson & Johnson is just one of many companies that has been found to repeatedly break the law. Most of the big drugmakers have the same rap sheet. All told, the report found 303 settlements over past 24 years with total penalties of nearly $30 billion. 

What kinds of crimes are we talking about here? Serious ones, in many cases. In announcing the settlement with Johnson & Johnson yesterday, Attorney General Eric Holder said the company -- and another firm, Janssen -- had pushed doctors to prescribe an anti-psychotic drug, Risperdal, in ways never approved by the FDA.

The companies allegedly downplayed the serious health risks associated with Risperdal – including the risk of stroke in elderly patients – and even paid doctors to induce them to prescribe the drugs.  

Think about that: A major drugmaker bribing doctors and putting people's health at risk to make a profit. In other cases, drugmakers have conspired with doctors to overbill and defraud Medicare and Medicaid. 

You'd think that some Big Pharma execs would be serving prison terms by now. Yet despite 303 settlements with the government over the past two decades, not a single top executive has gone to prison, much less faced criminal prosecution. 

In this case with J & J, the company's current CEO, Alex Gorsky, led the sales and marketing division at the time the Risperdal episode unfolded. You'd think he would be a ripe target for prosecution. Nope. In fact, Johnson & Johnson didn't even admit wrongdoing in making kickbacks to doctors as part of the settlement. Once again, we've seen a de facto guilty plea without much acknowledgement of guilt. 

Remember, Johnson & Johnson is a repeat offender, with at least 10 settlements of criminal and civil charges in the past three years. 

So what happens when major crimes are committed and no actual human offenders ever gets punished? More crimes are committed. As Public Citizen noted in releasing its report: "For Big Pharma, Crime Pays."

David Callahan

David Callahan is a co-founder of Demos and now edits the Demos blog PolicyShop.net. David is the author of eight books and his many articles have been published in such places as The New York Times, The Washington Post, The Nation, and The American Prospect.

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