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Kathlyn Stone

Pharmas Tops In Settlements Paid to Government

By December 20, 2010

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Credit: Scott Hancock

Nearly $15 billion of the $20 billion in large (over $1 million) settlements and penalties paid by pharmaceutical companies were paid within the last five years.

An analysis of all criminal and civil settlements of $1 million or more between pharmaceutical companies and federal and state governments over the last 20 years found that big pharmaceutical companies paid nearly $20 billion, most of it during the last five years. Four companies -- GlaxoSmithKline, Pfizer, Eli Lilly and Schering-Plough - were responsible for more than half of the fines, according to the report.

The watchdog group Public Citizen analyzed public data found online and in government issued press releases to identify the major settlements.

"Of the 165 settlements comprising $19.8 billion in penalties during this 20-year interval, 73 percent of the settlements (121) and 75 percent of the penalties ($14.8 billion) have occurred in just the past five years (2006-2010)," according to the Washington, D.C.-based group.

The pharmaceutical industry now leads all industries, including the defense industry, in the total amount of settlements paid to the federal government under the False Claims Act, says Public Citizen.

In November, the Justice Department announced that the $2.5 billion in health care fraud recoveries during 2009-2010 was the largest in history. Settlements and judgments have increased, said the Justice Department, after Congress strengthened the False Claims Act.

Public Citizen's Health Research Group: "Rapidly Increasing Criminal and Civil Monetary Penalties Against the Pharmaceutical Industry: 1991 to 2010," December 16, 2010 (Report PDF)

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