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March 7, 2012
Eight Billion Dollars Apparently Isn't Enough
You'd think that 8 billion dollars would be enough to get some attention. But that's how much drugmakers have paid in fines in recent years, and the regulatory agencies are wondering if anything's changing. This USA Today article has the details.
The fines, as many readers here will know, are for a range of offenses - Medicare reimbursements, off-label marketing, kickbacks from the sales force, and so on. And as things stand now, the government has really only two options when it comes time to lower the boom: fines, and the threat to remove the company from eligibility to sell via Medicare. But that second one is really sort of an empty threat, since most large companies are (for now!) selling drugs that are quite valuable to the Medicare patient population. So new techniques are being sought:
To try to change that trend, the government announced in 2010 that, rather than exclude an entire company, investigators would go after individuals within a company. [Gregory Demske at HHS] said his organization, the Justice Department and the Food and Drug Administration have come up with some ideas to use within the scope of the rules — such as taking away a company's patent rights as a condition of a settlement. That could begin with cases being investigated now, he said.
Now, that might get some attention, for sure. We'll see if it happens, because you can expect the industry to fight this as hard as possible. To that end, the article notes that $200 million was spent on lobbying last year by the drug and medical device industries. One first thought might be "Two hundred million! That's a lot of money!", but mine was "Two hundred million! Why, that's nothing compared to the issues involved. . ." Marginal Revolution has had some posts about lobbying and money in politics, mostly wondering why there isn't more of it than there is. With that kind of bang-for-the-buck, I wonder the same thing.
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