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Jan 27, 2014

Top 10 Biggest Biopharma Marketing Fines: 2014 Edition

Making false claims about your products not only doesn’t pay—it can cost you a lot of money.

Top 10 Biggest Biopharma Marketing Fines: 2014 Edition

Someone blew the whistle on these misbehaving firms. [© Peterfactors - Fotolia.com]

  • When biopharma companies try to market a drug for an indication it hasn’t been approved for, lawsuits happen—and very expensive fines. Just how expensive can they get? Here is an update of our list of the top 10 largest fines levied against pharmaceutical and biotech companies that marketed drugs for illegal off-label uses, either alone or in addition to other charges—such as wrongfully seeking federal reimbursement for their medications through programs like Medicaid and Medicare.

  • #10. Serono (now Merck Serono)

    Amount of fine: $704 million

    Drug(s) involved: Serostim [somatropin (rDNA origin) for injection]—2012 sales figure unavailable

    Date penalty approved and/or announced: October 17, 2005

    Details of the admissions and resulting penalties: Serono (now Merck Serono) pleaded guilty to charges that its Serono Laboratories unit conspired with medical device manufacturer RJL Sciences to market FDA-unapproved bioelectrical impedance analysis computer software packages for calculating body cell mass and diagnosing HIV/AIDS wasting, to increase the market for Serostim by increasing the market for the devices/software. Serono Labs agreed to pay a $136.9 million criminal fine, and its affiliate companies, a total $567 million to settle civil liabilities that it knowingly submitted false and fraudulent claims ineligible for reimbursement because the claims covered off-label use of Serostim, and were for prescriptions induced by kickbacks.

    Of the civil settlement, $305 million plus interest went to the U.S. for losses suffered by the federal portion of the Medicaid program, the Veteran’s Administration, the Department of Defense and the Federal Employees Health Benefits program; and nearly $262 million plus interest to the states toward reimbursing their Medicaid programs.

  • #9. Amgen

    Amount of fine: $762.1 million

    Drug(s) involved: Aranesp (darbepoetin alfa)—$2.040 billion in 2012 sales
    Enbrel (etanercept)—$4.236 billion in 2012 sales
    Neulasta (pegfilgrastim)—$4.092 billion in 2012 sales

    Date penalty approved and/or announced: December 19, 2012

    Details of the admissions and resulting penalties: Amgen admitted to illegally introducing a misbranded drug into interstate commerce by promoting off-label use of Aranesp for anemia caused by cancer. In the single largest criminal and civil fraud settlement involving a biotechnology company in U.S. history, Amgen agreed to pay a criminal fine of $136 million, forfeit $14 million, and pay a $612.1 million civil fine—$587.2 million to the federal government, $24.8 million to the states—to resolve claims that it caused false claims to be submitted to Medicare, Medicaid, and other government health care programs.

  • #8. TAP Pharmaceutical Products1

    Amount of fine: $875 million

    Drug(s) involved: Lupron (leuprolide)—About $800 million in 2012 sales2

    Date penalty approved and/or announced: October 3, 2001

    Details of the admissions and resulting penalties: TAP pleaded guilty and agreed to pay criminal charges and civil liabilities in connection with fraudulent drug pricing and marketing of the prostate cancer drug Lupron. TAP also agreed to settle federal civil False Claims Act liabilities and pay the federal government $559,483,560 for filing false and fraudulent claims with the Medicare and Medicaid programs as a result of TAP's fraudulent drug pricing schemes and sales and marketing misconduct.

    TAP agreed to settle civil liabilities to the 50 states and the District of Columbia and to pay them $25,516,440 for filing false and fraudulent claims with the states stemming from TAP's drug pricing and marketing misconduct, and failure to provide state Medicaid programs with its best price for those drugs as required by law. TAP also agreed to comply with a new corporate integrity agreement.

  • #7. Merck & Co.

    Amount of fine: $950 million

    Drug(s) involved: Vioxx (rofecoxib)—Withdrawn from the market in September 2004

    Date penalty approved and/or announced: November 22, 2011

    Details of the admissions and resulting penalties: Merck pleaded guilty to introducing a misbranded drug into interstate commerce by promoting Vioxx for treating rheumatoid arthritis, before that use was approved by FDA. Merck was sentenced to pay a $321.636 million criminal fine, and agreed pay a $628.364 million civil settlement to resolve allegations regarding off-label marketing of Vioxx, and false statements about the drug’s cardiovascular safety. Of the total civil settlement, $426.389 million will be recovered by the federal government, and the remaining $201.975 will be distributed to participating Medicaid states.

  • #6. Johnson & Johnson

    Amount of fine: $1.2 billion3,4

    Drug(s) involved: Risperdal (risperidone)—$1.425 billion in 2012 sales

    Date penalty approved and/or announced: April 11, 2012

    Details of the admissions and resulting penalties: Johnson & Johnson and its Janssen Pharmaceuticals subsidiary are appealing in Arkansas Supreme Court the $1.2 billion judgment they were ordered to pay the Arkansas Medicaid fund by Pulaski County (AR) Circuit Judge Tim Fox, after a jury convicted the companies of almost 240,000 violations of the state’s Medicaid law—namely, that they defrauded Medicaid by failing to properly outline the antipsychotic drug’s risks, which include diabetes, hormonal changes that affect the sexual development of children, increased likelihood of strokes in elderly people and excessive weight gain in users of all ages.

    The companies were also convicted of deceptively marketing the drug as safer, and thus better, than competing medicines. Arkansas Medicaid paid for 238,874 prescriptions—each of which, the state argued, was a violation of Medicaid fraud laws. J&J countered that the number of claims by the state should be 1,319.



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