Pharmaceutical Corporation Misbehavior


  1. The Truth About Drug Companies, Marcia Angell, July 15, 2004, New York Review of Books

    Research and development (R&D) is a relatively small part of the budgets of the big companies drug companies. What is spent on R&D is dwarfed by the vast expenditures on marketing and administration. Year after year, for over two decades, the drug industry has been far and away one of the the most profitable in the United States (In 2003, for the first time, the industry lost its first-place position, coming in third, behind "mining, crude oil production," and "commercial banks.") The prices drug companies charge have little relationship to the costs of making the drugs and could be cut dramatically without coming anywhere close to threatening R&D.

  2. Sleep for Sale Mother Jones, January/February 2005

    Many members of the medical establishment worry that sleep drugs could be the next antidepressants -- moderately useful drugs turned into blockbusters by aggressive marketing. "The sinister purpose of these ads is to convince people they have ailments they don't know they had -- like a medical condition that needs a chemical", says Dr. Jerry Avorn, a drug expert at the Harvard Medical School in Boston and the author of [the book] Powerful Medicines: The Benefits, Risks, and Costs of Prescription Drugs.

  3. Testing Drugs on India's Poor by Scott Carney, WIRED News, December 19, 2005

    From the article:

    Given the rising cost of drug research in the United States and Europe, more and more drug companies are conducting clinical trials in developing countries where government oversight is more lax and research can be done for a fraction of the cost. According to a 2004 study by Rabo India Finance, a subsidiary of the Netherlands-based Rabo Bank, clinical trials account for more than 40 percent of drug-development costs. The study also found that performing the studies in India can bring the price down by about 60 percent.

    By 2010, total spending on outsourcing clinical trials to India could top $2 billion, according to Ashish Singh, vice president of Bain & Co., a consulting firm that reports on the health-care industry.

US Dept of Justice References

  1. Pfizer Price Fixing, July 19, 1999

    WASHINGTON, D.C. -- New York City-based pharmaceutical giant, Pfizer Inc., has agreed to plead guilty and pay criminal fines totaling $20 million for participating in two international price fixing conspiracies in the food additives industry, the Department of Justice announced today.

    Pfizer--the fourth largest pharmaceutical company in the United States--is charged with participating in a conspiracy to raise and fix prices and allocate market shares in the U.S. for a food preservative called sodium erythorbate, and to allocate customers and territories for a flavoring agent called maltol.

  2. Avantis Price Fixing Sept 18, 2003

    Rhone-Poulenc Biochimie S.A., a subsidiary to the French-based pharmaceutical company, Aventis S.A., today agreed to plead guilty and pay a $5 million fine for participating in a conspiracy to fix prices and allocate customers for a chemical used to slow the rate at which dyes disperse throughout the body during x-rays and other medical imaging procedures, the Department announced. Additionally, a St. Louis, Missouri federal grand jury indicted Eric Descouraux, the company's former sales and marketing director for active pharmaceutical ingredients, for his role in the conspiracy.

    According to court papers, employees of RP Biochimie met annually in Europe over a nine-year period with representatives from a competitor to agree on the prices each would charge their customers worldwide. Additionally, the conspirators exchanged sales and customer information in order to monitor and enforce adherence to the agreed-upon prices and allocation of customers for pharmaceutical grade methyl glucamine sold in the United States and elsewhere.

  3. Hoffman-La Roche Executive pays find, does jail time, August 19, 1999

    WASHINGTON, D.C. -- A former executive of the Swiss pharmaceutical giant F. Hoffmann-La Roche Ltd. today agreed to plead guilty, serve a five-month jail sentence, and pay a $150,000 fine for his role in an international conspiracy to suppress and eliminate competition in the vitamin industry, the Department of Justice announced.

  4. Hoffman-La Roche Pays $500 million fine in criminal vitamin price fixing case, May 20, 1999

    A Swiss pharmaceutical giant, F. Hoffmann-La Roche Ltd today agreed to plead guilty and pay a record $500 million criminal fine for leading a worldwide conspiracy to raise and fix prices and allocate market shares for certain vitamins sold in the United States and elsewhere, the Department of Justice announced. A German firm, BASF Aktiengesellschaft, also will plead guilty and pay a $225 million fine for its role in the same antitrust conspiracy, the Department said.

  5. Bayer AG Rubber Chemical Price Fixing criminal case May 16, 2005

    A former executive of Bayer AG, the German chemicals and pharmaceutical giant based in Leverkusen, Germany, has agreed to plead guilty, serve time in prison and pay a criminal fine for his role in an international conspiracy to fix prices in the rubber chemicals market, the Department of Justice announced today.

  6. Warner-Lambert, May 13, 2004

    Warner-Lambert to pay $430 Million resolve criminal charges and civil liabilities in connection with its Parke-Davis s illegal and fraudulent promotion of unapproved uses for one of its drug products

  7. Fraud during a Rotavirus Drug trial

  8. AstraZeneca pleads guilty and pays $355 Million in criminal case, June 20, 2003

    AstraZeneca pleaded guilty to conspiring to violate the Prescription Drug Marketing ) by causing to be submitted claims for payment for the prescription of Zoladex which had been provided as free samples to urologists. This criminal conduct caused losses of $39,920,098 to Medicare, Medicaid and other federally funded insurance programs. As part of the plea agreement, AstraZeneca agreed to pay a $63,872,156 criminal fine;

  9. Serono Laboratories

  10. GlaxoSmithKline pays $150 million to settle drug pricing fraud case, Sept. 20, 2005

    GlaxoSmithKline has paid over $150 million to resolve allegations that the company violated the False Claims Act through fraudulent drug pricing and marketing of two anti-emetic drugs, Zofran and Kytril, used primarily in conjunction with oncology and radiation treatment, the Justice Department announced today.

  11. Advancepcs to pay $137.5 million to resolve civil fraud and kickback allegations Agrees to Consent Order Addressing Consumer Protection Issues, September 8, 2005

Other references (not from

  1. Attorney General King sues 79 drug companies for dishonest pricing scheme, January 27, 2005

  2. Schering-Plough to pay $345 million to resolve criminal and civil liabilities for illegal marketing of Claritin

Material from Law Professor Blog Network

This is an extensive set of publication references and comments by law professors throughout the United States. I did a search on pharmaceuticals.

  1. Caremark RX Settles Civil Health Care Fraud Claim, Sept. 9, 2005

  2. Pharmaceuticals, Cheerleaders, and the Selling of Drugs (or is that Sex?)

  3. Drug Adds

    According to Science Daily, a UCLA study uncovered the fact that nearly 1/3 of drug ads in medical journals did not contain references supporting medical claims

  4. Drug Companies Influencing Drug Studies

    Science Daily has reported on a survey released Wednesday that says many university medical schools permit the pharmatceutical companies to influence what gets published from industry sponsored drug studies. The article expressed concern about the possible negative consequences of withholding negative study results since pharmaceutical companies fund over 70 percent of clincial drug trials.

  5. SEC Adds Civil Fraud Charges Against Former Bristol-Myers Executives, August 23, 2005

    The Complaint alleges that from the first quarter of 2000 through the fourth quarter of 2001, at Schiff and Lane's direction, Bristol-Myers stuffed its distribution channels with excessive amounts of its pharmaceutical products ahead of demand to meet the Company's internal earnings targets and the consensus estimate of Wall Street securities analysts, and improperly recognized revenue from $1.5 billion of such sales to its two largest wholesalers. According to the Commission's Complaint, when Bristol-Myers' results still fell short of its targets and the consensus estimate, at Schiff's direction, the Company used "cookie jar" reserves to further inflate its earnings. The Complaint also alleges that at Schiff's direction, and as a result of the channel-stuffing, Bristol-Myers also underaccrued for Medicaid and prime vendor rebate liabilities. As a result of its channel-stuffing and improper accounting measures, Bristol-Myers reported results that met or exceeded the consensus estimate every quarter during the scheme.

  6. Pfizer Whistle-blower? Talk about a rock and a hard place, June 8, 2005

    First, his employees stopped reporting to him. Then his supervisors stopped returning his calls and now he does not know whom to report to. His secretary left, he said, and he was moved to an office near Pfizer's security department at a company building in Peapack, N.J. The latest blow came Monday, the morning after Dr. Rost, 46, appeared on a segment of "60 Minutes" on CBS about drug prices - a follow-up to his news conference on the subject last year with members of Congress and to the opinion pieces he has written for The New York Times and other newspapers. Ready, as always, to put in a full day at the office, Dr. Rost turned on his computer Monday and tried for the first time in almost two weeks to log into his Pfizer e-mail account.

  7. Number of Allegations of Cheating Researchers at New High

Ian Kaplan, December 2005

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