Decline in financial settlements with U.S. Big Pharma: report

Thu Mar 31, 2016 12:05am EDT
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By Sarah N. Lynch

WASHINGTON (Reuters) - The amount of money big U.S. pharmaceutical manufacturers have paid to settle charges for violating federal health care laws has declined sharply in recent years, prompting a non-profit watchdog group to call for an increase in enforcement efforts.

In a new analysis that chronicles 25 years worth of pharmaceutical industry settlements and court judgments, the group, known as Public Citizen, found that just $2.4 billion in federal financial penalties were recovered from 2014 to 2015 - a figure that is less than one third of the $8.7 billion recovered from 2012 to 2013.

The report calls for larger penalties and possible prison sentences, noting that without tougher sanctions, illegal activities will continue to be "part of the companies' business model."

The report also found there was a nearly 80 percent drop in settlements between companies and states in 2014-2015 from 2012-2013.

In addition, the report found that in 2014-2015, criminal penalties against large pharmaceutical companies have reached new lows, totaling only $44 million, compared to $2.7 billion from 2012 to 2013.

Sammy Almashat, one of the researchers at Public Citizen who helped author the report, said the cause for the decline in settlements is still not clear.

The report explores several possible reasons, from a drop in enforcement and shifts away from off-label marketing prosecutions, to changes in Medicaid pharmaceutical reimbursement strategies.

But Almashat said he does not believe the decrease reflects improvement by large pharmaceutical companies in their overall corporate compliance.   Continued...

Pharmaceutical tablets and capsules in foil strips are arranged on a table in this picture illustration taken in Ljubljana September 18, 2013.   REUTERS/Srdjan Zivulovic