The Associated Press reports that Schering-Plough is the latest drug company to plead guilty to conspiracy and overcharging Medicaid.
But, instead of putting its executives on trial–as was done in the Enron et al cases–with the possibility of prison time, Pharma executives get off scot free passing the $435 million fine to the shareholders.
As long as no individual executives are held accountable, the crime rate by Big Pharma will rise because these fines are peanuts for major drug firms whose sales from illegal promotion of off-label use of their products runs in the multi-billion dollar range.
The evidence is clear:
the following Big Pharma companies have pled guilty to criminal conduct: Pfizer, Bayer, TAP, Merck, Avatar, Warner-Lambert, GlaxoSmithKline, AstraZeneca, Serono Laboratories….See: http://www.bearcave.com/misl/misl_other/drug_companies.html
Schering-Plough is a recidivist: On July 30, 2004: SCHERING-PLOUGH TO PAY $345 MILLION TO RESOLVE CRIMINAL AND CIVIL LIABILITIES FOR ILLEGAL MARKETING OF CLARITIN See DOJ press release: http://www.undercovernews.us/c07302004.html
Contact: Vera Hassner Sharav
By THE ASSOCIATED PRESS
August 30, 2006 Drug Maker Will Pay Fine for Promoting Off-Label Use
BOSTON, Aug. 29 — The Schering-Plough Corporation agreed on Tuesday to pay $435 million and plead guilty to conspiracy to settle a federal investigation into marketing of its drugs for unapproved uses and overcharging Medicaid for certain drugs.
Schering-Plough said it would pay $255 million to resolve civil aspects of the previously disclosed investigation. A subsidiary, the Schering Sales Corporation, will pay a criminal fine of $180 million and plead guilty to one count of conspiracy to make false statements to the government. The agreement is subject to court approval.
Schering-Plough said the settlement resolved an investigation by the Justice Department and the United States attorney’s office in Boston that began before a new management team took over at the company in April 2003.
“With this agreement, we are putting issues from the past behind us,” said Brent Saunders, senior vice president for compliance and business practices.
Shares of Schering rose 53 cents, to $20.94, on Tuesday.
The agreement comes two years after Schering-Plough agreed to pay $346 million to settle charges that it paid a kickback to a health insurer to protect the market for its allergy drug Claritin.
The investigation that led to Tuesday’s settlement began in 2001.
Investigators found evidence that Schering-Plough marketed drugs for off-label uses. Off-label uses have not been approved by government regulators, although doctors can individually choose to prescribe drugs for those purposes.
One such drug was Temodar, which the Food and Drug Administration in 1999 approved to treat anaplastic astrocytoma, a type of brain tumor, in patients who had not responded to other drug regimens.
A United States attorney, Michael Sullivan, who announced Tuesday’s settlement at a news conference in Boston, said Schering promoted the drug to treat several other types of brain cancers and cancer that had spread to the brain from elsewhere, uses that the F.D.A. had not approved.
Mr. Sullivan said that Schering-Plough also provided misleading information to the government about the price it was charging a health maintenance organization for Claritin RediTabs, to avoid having to pay rebates to the Medicaid program. Medicaid is supposed to obtain the benefit of low drug prices and drug makers are required to report their best price on drugs supplied to commercial customers.
Copyright 2006 The New York Times Company <http://www.nytco.com/>
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