Glaxo Fine: What Will Stop Big Pharma Fraud?

Even $3 billion is likely not enough to stop another drug scandal from happening again

  • Share
  • Read Later
Kirsty Wigglesworth / AP

GlaxoSmithKline LLC will pay $3 billion in the largest health care fraud settlement in U.S. history

So now we have yet another groundbreaking government lawsuit against a major drug maker settled for a seemingly colossal sum. And we are confronted, yet again, with the fact that these fines, however punitive-seeming on their face, are chump change in comparison to the company’s bottom line and highly unlikely to bring real change to its — or, indeed, the industry’s — future practices.

The Justice Department can, on the one hand, claim a real triumph for the guilty plea and $3 billion fine it won this week from GlaxoSmithKline, the British drug giant, for having promoted its antidepressants Paxil and Wellbutrin for unapproved uses, having failed to report health hazards associated with its diabetes drug, Avandia, and having inappropriately marketed half a dozen of its less well-known medications. It is the largest health care fraud settlement in U.S. history.

(MORE: Breaking Down GlaxoSmithKline’s Billion-Dollar Wrongdoing)

And yet, as the New York Times reported this week, the settlement was a less than page-turning victory. Glaxo wasn’t exactly ruined by the fines; In the years covered by the settlement, the company had earned $10.4 billion in sales of Avandia, $11.6 billion from Paxil, and $5.9 billion from Wellbutrin, and had money already set aside for paying the government, according to the Times. A number of commentators — including former New York Governor Eliot Spitzer, who’d sued GlaxoSmithKline previously over Paxil while serving as New York’s attorney general — argued that seeking monetary damages isn’t going to change most problematic practices of the pharmaceutical industry. Instead, they say, we should seek criminal charges against specific executives, the risk of jail time being the only way to actually change behavior.

Though such a solution certainly offers the prospect of some real gut-level satisfaction, I’m not convinced that it will actually show results. (Given the enormous resources, legal and otherwise, of the drug companies, I think it’s fair to assume that they’d be quickly able to figure out methods of Teflon-shielding their executives.) Such a strategy also doesn’t address the fundamental problems that have enabled, if not created, Big Pharma’s repeat bad behavior: a balance of power between the industry and our government that is seriously askew, and a particular lack of smart regulation (in an industry that is, in many other ways, quite highly regulated) over the way information about specific drugs is controlled, verified, and disseminated.

(MORE: Belviq: Five Things You Need To Know About The New Weight-Loss Pill)

In the last three decades, the FDA has become increasingly dependent for its continued functioning upon user fees paid by the very drug makers it’s meant to regulate. Meanwhile, a lack of government funding for research and development has made consumers entirely dependent upon private industry for new drugs — which means that safety and efficacy standards are perennially weighed against the demands of a corporation’s bottom line. In a period in which true advances in psychotropic medications, in particular, have been few and far between, companies have been harder and harder pressed to recoup the considerable costs of not-so-productive r & d through aggressive and “creative” marketing, particularly in the window of years before their patents expire and their profits plummet.

Drug makers control the data derived from the efficacy and safety studies that they fund (making the suppression of unflattering data all too easy), and have, for well over a decade now, had a government-facilitated way to communicate directly — and, again, selectively — with the public through direct to consumer advertising. Not only is the United States all but alone in the world (along with New Zealand) in permitting direct marketing of prescription drugs to consumers,  it actually encourages such commercially-biased public “education” through tax breaks.

Corporations exist to make money; to pretend otherwise is ridiculously naïve. Relying upon them excessively to provide public services — like scientific innovation, or information dissemination on health-related topics — will only lead to more compromises in public health and safety.

MORE: Does Health Insurance Actually Make People Healthier?