Decline in Number of Settlements with Big Pharmaceuticals in U.S.

The amount of big money from U.S. pharmaceuticals coming from settlements for violating healthcare laws has dropped sharply in the past few years. This has prompted a watchdog, non-profit group to call for enforcement efforts to increase.

In a recent analysis that 25 years of pharmaceutical court judgments and settlements are chronicled, the group called Public Citizen, found that only $2.4 billion in financial penalties were recovered by federal authorities between 2014 and 2015, a figure which is less than a third of the more than $8.7 billion they recovered between 2012 and 2013.

The report asks for larger penalties as well as possible prison terms, noting without sanctions being tougher, illegal activities would continue to be a part of the business model of companies.

The report found as well that there was close to an 80% fall in the number of settlements between states and companies from 2013-2013 to 2014 to 2015.

In addition, the report said that during 2014-2105, criminal penalties reached new lows against the large pharma companies totaling just $44 million in comparison to over $2.7 billion between 2012 and 2013.

One researcher from the watchdog group who helped to author the final report said the decline in overall settlements was still unclear.

The report looks at a number of possible reasons including a drop in the overall enforcement to shift from prosecutions of off-label marketing, to the changes in Medicaid strategies of pharmaceutical reimbursement.

However, researchers in the group do not think the decline reflects an improvement by the large pharmaceutical companies in overall corporate compliance.

The group said that previous penalties were never large enough so they deterred the common types of fraud in the industry.

Therefore, it would be a surprise said researchers if the industry itself just suddenly made a decision unilaterally to comply with federal laws it routinely has violated over many decades.

The report released on Thursday updates a study done prior by the same group in 2012 that explored the federal as well as state enforcement in the industry back to 1991.



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