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Big Pharma Pays Out Billions in Settlements Watchdog Group Reports

gavel and scale of justiceNational nonprofit watchdog organization Public Citizen has released its findings of a study of 25 years of data, which highlight the $35.7 billion in settlements agreed upon by pharmaceutical companies and federal and state governments. During the period from 1991 through 2015, pharmaceutical giants agreed to a total of 373 settlements with various governmental entities. Of the 373 settlements, 140 were with the federal government.

These settlements totaled $31.9 billion. The rest were state settlements, which totaled $3.8 billion.

Penalties decline overall

Despite the many billions in financial penalties paid out by various pharmaceutical companies, these figures actually represent a decline compared to the settlement totals from previous years. The criminal penalties from 2012 and 2013 combined totaled $2.7 billion, but the combined total from 2014 and 2015 was just $44 million. Additionally, from 2014 to 2015, there were only 20 state settlements, which represented nearly an 80 percent decline from 2012 to 2013, during which there were 95 settlements. In 2012 and 2013, there were a combined $1.2 billion in state penalties, compared to $424 million during 2014 and 2015.

Public Citizen reports that the sudden drop in financial penalties during the past two years was primarily attributable to the sharp decline in federal settlements that involved allegations of unlawful promotion. During 2012 and 2013, almost $2.8 billion in federal settlements was attributed to unlawful promotion allegations, compared to the total of $263 million in penalties during 2014 and 2015. However, the total number of settlements involving unlawful promotion allegations only declined from 11 to eight, which indicates that the size of the settlement had more to do with the sudden drop.

The unlawful promotion allegations refer to pharmaceutical and medical device companies that have been accused of inappropriately marketing medications for a purpose for which they had not been approved by the FDA. Doctors can and frequently do prescribe medications for off-label use, but it is inappropriate for the manufacturer to promote medications for off-label use.

For example, Zofran (ondansetron) is an anti-nausea medication that the FDA has approved for use in patients who are undergoing chemotherapy, radiation therapy, or surgery. It is acceptable for a doctor to prescribe Zofran for other patients, although the manufacturer is not supposed to market it for these purposes. Some women who received Zofran while pregnant to treat morning sickness have filed lawsuits against GlaxoSmithKline (GSK), alleging that the company marketed Zofran for off-label use and that this inappropriate use allegedly resulted in severe birth defects in some cases.

From 1991 to 2015, Public Citizen notes that GSK and Pfizer were responsible for the lion’s share of financial penalties. GSK reached 31 federal and state settlements to the tune of $7.9 billion, while Pfizer also reached 31 settlements for $3.9 billion.

Recent litigation & settlements

In other litigation news, a Missouri jury has ordered Johnson & Johnson to pay $72 million to plaintiffs who filed a lawsuit after their family member died from ovarian cancer linked to the regular use of the defendant’s talc powder for more than 35 years. The decedent, Jacqueline Fox, had filed the lawsuit after being diagnosed with ovarian cancer. Following her death about two years later, her family took over the lawsuit to demand justice on behalf of the decedent.

Substantial verdicts have also been rendered for plaintiffs who have filed transvaginal mesh lawsuits against manufacturers such as Johnson & Johnson, Ethicon, and C.R. Bard. Thousands of cases have been consolidated into various multidistrict litigations (MDL), which are proceeding in the U.S. District Court for the Southern District of West Virginia. The overseeing judge, U.S. District Judge Joseph R. Goodwin, has facilitated settlement negotiations in many of the cases.

  1. Public Citizen, Twenty-Five Years of Pharmaceutical Industry Criminal and Civil Penalties: 1991 Through 2015,

  2. Consumerist, Jury Awards $72 Million In Johnson & Johnson Talcum Powder Cancer Lawsuit,