Those who follow the news may be impressed by the massive fines they have seen imposed against pharmaceutical companies for their misconduct, including off-label marketing.  Periodically, the press reports a fine against one of these companies reaching into the hundreds of millions of dollars.  Surely, with such fines imposed, the drug companies and the industry as a whole will begin acting responsibly?  Unfortunately, our Chicago personal injury lawyers of the Passen Law Group, among others, have observed that this is not the case.  These penalties have proven completely ineffective in reigning in the negligent and abusive practices of drug companies.

In addition to the large dollar figures, such settlements also often include what are affectionately known as “CIAs,” or Corporate Integrity Agreements.  These agreements, in theory, allows the government to keep an eye on the company’s future compliance efforts, even steering or directing those efforts.  The government apparently believes that a settlement containing a CIA will create compliance from that company in the future.   The evidence is to the contrary: some recent fines have even been leveled against companies who were already operating under such agreements from prior misconduct.

Moreover, our Chicago wrongful death attorneys believe that government fines, in addition to their ineffectiveness, may actually be harmful to Americans.  There is nothing preventing companies from passing these fines along to future customers in the form of increased drug prices.  Americans are thus hurt in a multitude of ways by the companies’ wrongful conduct – they pay for Medicare and Medicaid reimbursements for off-label and dangerous drug uses, they pay the societal and healthcare costs for treating and dealing with the severe, debilitating, or even fatal side effects, they pay the costs of government litigation against the drug companies, and then they pay higher prices for medicines in the future.

The perfect example is the recent fine leveled against drugmaker AstraZeneca for marketing abuses in connection with Seroquel, the company’s marqee psychiatric drug.  Seroquel has FDA approval – for a limited number of uses.  Seroquel’s FDA approval extended only to short-term treatment, of specific conditions:  schizophrenia and acute bipolar 1.  It is alleged, however – by both the Justice Department and numerous civil and class-action plaintiffs – that the company aggressively and consistently marketed the drug for long-term use, and for the treatment of a much wider array of conditions.  The Justice Department’s complaint stated that AstraZeneca marketed the drug “as a long-term cure-all for a broad spectrum of psychiatric maladies, including . . . aggression and agitation in children.”  The company also allegedly marketed the drug for the long-term treatment of dementia.  Making this off-label marketing even more egregious, clinical studies on Seroquel have had mixed results, but have often shown “serious and debilitating” side effects – particularly in the elderly and children.

The type of doctors to whom Seroquel was marketed was also part of the problem.  For its approved uses, Seroquel should most commonly be prescribed by psychiatrists.  But the company marketed the drug to general practitioners, staff at veteran’s hospitals and prisons, staff at nursing homes, and even to neighborhood physicians.  By doing so, AstraZeneca essentially used patients, including America’s veterans, elderly, and children, as test subjects for unapproved, unsupervised trials of the use of Seroquel for the treatment of additional conditions.  Our wrongful death attorneys are shocked by this betrayal of the public trust.

After the Justice Department filed its criminal complaint against AstraZeneca, the company decided to settle.  The company’s stated reason was, of course, to “avoid the delay, uncertainty, inconvenience, and expense of protracted litigation.”   The company worked out a deal with the government that included a record-breaking $520 million civil-only fine.  This fine was touted as a major victory in a press conference held by no less than the Attorney General, the Secretary of Health and Human Services, and the head of the FDA.

But despite the hype (and the fact that $520 million sounds like a lot of money to most Americans), the fine, like most, has proven far too small to be effective.  Indeed, this staggering fine is actually just over 15% of the amount Seroquel earned for AstraZeneca in the U.S. during the years that the company was actively marketing the drug to physicians for dangerous, unapproved, off-label uses.  In that time, the company made an unbelievable $8.6 billion dollars from U.S. Seroquel sales – making even this record fine little more than a slap on the wrist.

AstraZeneca was already operating under a CIA during at least some of the years in which it aggressively marketed off-label uses of Seroquel – a CIA was imposed in connection with a $355 million fine imposed for the marketing of an AstraZeneca cancer drug.

The personal injury attorneys of Passen Law Group know that there is every reason to question the government’s effectiveness in cases of drug company misconduct.  Along with the massive underfunding of both the FDA and the Justice Department’s enforcement, the government has several serious incentives to settle, rather than fully prosecute, these cases.  First, the government, and particularly the high-ranking officials, like to have an occasional large settlement to trot out to the press.  The risk of the bad press of a costly prosecution and a not-guilty verdict, from the perspective of the political fallout to these high-profile politicians, it considerable.  Additionally, if the government were to succeed in one of these prosecutions, the law would then require that it exclude the offending company from any federal healthcare programs.

Not only would such an exclusion deprive federally-funded patients of the medicines produced by these companies, it could have a profound negative impact on the industry.  Most pharmaceutical companies get between 30% and 40% of their revenue from federally-funded programs.  Exclusion could thus put a company completely out of business, rocking the industry and destroying countless jobs.  With these various settlement incentives, there is every reason to believe that the government is not really trying to win these cases.

Our top Illinois injury lawyers urge the government to begin to take these cases seriously.  Funding for prosecutions must be increased, and the government must begin When cases are settled, they must be for more that a token amount, and there must be conditions imposed preventing the company from passing the cost along to customers.  Finally, the government should remove the exclusion penalty, thus allowing it to aggressively litigate these cases, and see them through to completion.  Until then, however, the only true means of protecting consumers and punishing offending companies will be civil litigation brought by top products liability lawyers such as those at Passen Law Group.

For a free consultation with an experienced Chicago personal injury lawyer at Passen Law Group, call us at (312) 527-4500.