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The Beatings Will Continue…

….until the biopharmaceutical and medical device industries clean up their act.

It has been an expensive year for pharmaceutical companies. Billions of dollars have been paid to federal and state governments and whistleblowers in settlement of allegations and lawsuits. The complaints include off-label marketing and overcharging Medicaid, but there are many others.

While I am sure there are some “innocent” companies that are the targets of allegations, there are far too many expensive settlements and verdicts for industry to claim that they are victims of overzealous prosecutors and “get rich” whistleblowers. Earlier, FDA Matters called on the biopharmaceutical and medical device industries to recognize that “sales are not more important than laws.” (“Off-Label Promotion and Whistleblowing” at www.fdamatters.com/?p=479)

I worry that companies figure they are ahead financially as long as profits exceed penalties. Not for long! The civil and criminal complaints are going to increase and settlements and verdicts are going to get larger. Legislation will get even more restrictive….and a wave of bad publicity will haunt the medical products industries and may forever destroy the public appreciation of the human benefits these companies provide.

US attorneys, state attorneys general, and inspectors general will keep probing until there is nothing left to investigate in the biopharmaceutical and medical device area. This won’t happen anytime soon.

Over 180 pharmaceutical fraud cases involving more than 500 drug products are being investigated by the Department of Justice under the False Claims Act. Reportedly, most involve allegations of false and misleading statements made with intent to defraud or mislead. An additional back-log of 1000 whistleblower cases is waiting for DOJ to decide whether to participate. (From comments made by Jennifer Bragg, a partner in the law firm, Skadden, Arps, as reported in Dickenson’s FDA Webview).

CEO’s need to see corporate accountability as their personal responsibility. The handwriting is on the wall, based on the recent successful criminal prosecution of a small biotech CEO. Sometime soon, a US attorney is going to decide that monetary settlements should not be allowed to wipe out criminal charges. As a result, some senior executives in multi-billion dollar pharma companies may go to jail.

CEO’s can no longer afford to trust themselves or their corporate management in judging whether they have followed the law. They need to verify. This requires tougher questions, independent audits of sales and marketing efforts, and alerting physicians to report to the company any meeting where a company representative made false or misleading claims. These companies should be hiring and empowering former prosecutors and investigators to review both policy and performance.

I believe in the transformative power of the biopharmaceutical and medical device industries to lengthen lives, deliver cures, control symptoms, and relieve pain. My advice to CEO’s is clichéd but true. When the subpoenas arrive: “Do not ask for whom the bell tolls, it tolls for thee.” Is anyone listening in the corporate suites?


The article cited in Dickenson’s FDA Webview is available at:

‘Whistleblower’ Cases Dominate FD&C Act Prosecutions
[639 Words] [ Price : $14.95]

With more than 180 pharmaceutical fraud cases now under investigation by the Department of Justice, FD&C Act prosecutions are now largely driven by “whistleblower” lawsuits, according to Eugene Thirolf, director of DoJ’s Office of Consumer Litigation. 10/14/2009

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