Sidney Wolfe, who was head of Ralph Nader's health research group back when I was a 21 year old office assistant for Mr. Nader and is still at it, provides an interesting analysis to BMJ. Why, you may well ask, is an American activist reporting research on enforcement actions against drug companies by U.S. authorities publishing his results in a British journal? That's an interesting question. I'm sure it's irrelevant that New England Journal of Medicine takes in a million dollars or more a year in advertising from drug companies.
Anyway, as background, when the government fines a drug company for ripping off the government or poisoning patients, it makes them sign what's called a Corporate Integrity Agreement (yes, a CIA) which supposedly subjects them to special monitoring for some period of years. Dr. Wolfe finds that in spite of hundreds of millions of dollars in penalties and serial CIAs, drug companies keep on doing the same evil over and over again.
From 1991 through 2012, drug companies have paid $30.2 billion in civil and criminal penalties to the federal and state governments. GlaxoSmithKline has paid the most: $7.56 billion. Pfizer comes in second at about $3 billion.
For example, GSK paid $87 million in 2003 for ripping off Medicaid, and signed a CIA supposedly lasting till 2008. Didn't do any good, apparently. GSK paid another $150 million in 2005, again for ripping off the government, and signed a new CIA lasting through 2010. Whoops! Another $150 million in criminal penalties, and $600 million in civil penalties, for ripping off the government, this time by selling adulterated drugs. Then in 2012, GSK paid $3 billion in criminal and civil penalties for various nefarious schemes including off-label promotion, paying kickbacks to doctors for prescribing, and concealing evidence of the risks of one of its products.
So why does this keep happening? Well, GSK's profit in 2012 was $7.7 billion, more than the entire amount of the penalties they have paid in 20 years. Wolfe:
We are forced to conclude that neither the current level of penalties nor corporate integrity agreements are effective and that there is a pathological lack of corporate integrity in many drug companies.Yep. If you are morally depraved, it's just a financial calculation. If you make more money by stealing and murdering and paying the fine than you would by honesty, go ahead and murder and steal.