The Takeaway: Drugmakers Defraud Uncle Sam Repeatedly

Pharma Giants Flaunt Rules: Several of the largest American pharmaceutical companies have repeatedly defrauded Medicare, Medicaid and patients over the past decade. But because these drugmakers-including Pfizer and Merck-are the only ones making critical medicines in the U.S., the federal government must continue to do business with them.

Since 2002, these companies have paid at least $8 billion in fines for fraud, according to Medicare and Justice Department records analyzed by USA Today. Offenses include improperly promoting drugs for purposes other than approved uses, paying illegal kickbacks to doctors for prescribing certain drugs and not paying proper rebates to the government.

Government investigators say their hands are tied with the tools they have. They can exclude Pfizer and other pharmaceutical companies from providing medications to Medicaid and Medicare beneficiaries as punishment for bad behavior, but that would leave beneficiaries without drugs patented through a particular company. Or they can fine the companies and force them to enter corporate integrity agreements that require government oversight and a promise not to defraud the government again - a promise that often goes unkept."

Members of Congress have been looking for new ways to hold drug companies accountable-going after individuals within a company instead of the entire company; taking away a company's patent rights. These actions aren't possible in the current "all-or-nothing" approach to pharma fraud said Sen. Chuck Grassley, R-Iowa. Grassley introduced a (bipartisan) bill with some of these middle-ground actions. A House bill, HR 675, complements his bill.

Pfizer produces drugs such as Lipitor, Zithromax, Xanax, Viagra and Advil. Merck & Co.'s products include the osteoporosis medicine Fosamax, the adult shingles vaccine, and cholesterol-lowering drugs Vytorin and Zocor.

Tuesday Quick Hits: 

  • American pension assets grew 16.4 percent in 2011, according to a new report. The 126 state pension plans studied had an average of 77 percent of the assets needed to pay their long-term obligations to retirees (up from 69 percent a year earlier).
  • Younger CEOs tend to be "more energetic and innovative, and to be willing to take more risks," writes Forbes' Erika Andersen. Older CEOs, however, tend to be more skilled at management, more balanced and nuanced in their judgement, and bring the wisdom of experience to decision making.

Photo: Steve Lewis/Getty Images

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