Sunday, February 7, 2016

Big Pharma, Big Oil

The $1.256 billion criminal fine oil giant BP agreed to pay on Thursday probably brought smiles to some faces in the pharmaceutical industry, since it pushes drug companies down the list of the largest fines.

Big Pharma, Big Oil


The news that oil giant BP agreed on Thursday to pay $4.5 billion to settle some of the allegations by the U.S. Justice Department about the Gulf of Mexico oil spill surely brought smiles to some faces in the pharmaceutical industry, especially Pfizer.

When the Deepwater Horizon drilling rig exploded in 2010, 11 workers were killed. The water and beaches of the Gulf of Mexico were spoiled, businesses were destroyed or disrupted, and untold numbers of animals died.

The $4.5 billion figure included $1.256 billion in corporate criminal penalties, thereby pushing drugmaker Pfizer out of the top spot in the ranks of largest fines for corporate criminal behavior in the United States.

The cases involve other penalties, including civil fines that have or will run into the billions. Reports suggest the BP total could exceed $20 billion.

The largest pharmaceutical penalty package was $3 billion that GlaxoSmithKline agreed to pay in July to resolve marketing and disclosure allegations about several drugs. But, as with BP, the process continues. Indeed, Glaxo said Thursday it agreed to pay $90 million to resolve related allegations by 37 states, including Pennsylvania and New Jersey.

Plenty of folks argue that the figures should be higher or lower, depending on your view of either industry and its practices.

The Associated Press via the Justice Department provided the new rankings, based on the criminal figure:

1. $1.256 billion in criminal fines against BP for various charges related to the 2010 explosion of the Deepwater Horizon and the resulting oil spill. An estimated 172 million gallons of crude spilled into the Gulf, fouling marshes and beaches, killing wildlife and closing vast areas to fishing. Eleven workers died in the blast. The spill was the nation's worst offshore oil disaster.

2. $1.195 billion, October 2009, against Pfizer as part of a settlement of criminal and civil allegations that it promoted the anti-inflammatory drug Bextra for uses and dosages the Food and Drug Administration had rejected because of safety concerns.

3. $956.8 million, plus $43.2 million in forfeitures, as part of a Glaxo settlement for misbranding the drugs Paxil and Wellbutrin and for failing to report post-approval studies of the drug Avandia to the Food and Drug Administration.

4. $700 million, May 2012, against Abbott Laboratories Inc. as part of a settlement for unlawful promotion of the prescription drug Depakote.

5. $515 million fine and $100 million forfeiture, January 2009, against Eli Lilly and Co. as part of a settlement for off-label marketing of antipsychotics.

One thing that won't make pharmaceutical executives happy is that the Justice Department charged three BP executives with crimes.

Only recently have a few pharmaceutical and medical device executives been charged.

One of the few health-care exceptions was medical device manufacturer Synthes, now part of Johnson & Johnson. Four Synthes executives were sent to prison for their involvement in an illegal bone cement trial in which three people died on the operating table.

“I hope that this sends a clear message to those who would engage in this kind of reckless and wanton conduct," Attorney General Eric Holder said Thursday at a news conference in New Orleans to discuss the BP case, according to the New York Times. Attorneys for the men said they would fight the charges.

The Philadelphia U.S. Attorney's Office has been involved in many of the pharmaceutical investigations and is part of the as-yet-unsettled case involving Johnson & Johnson and its marketing of the antipsychotic drug Risperdal.

As in the oil case, though in varying degrees, prosecutors from the Justice Department in Washington and attorneys in field offices share the work. Assistant U.S. Attorneys Derek Cohen and Scott Cullen of the Philadelphia office helped in the BP case.



Staff Writer
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About this blog
David Sell blogs about the region's pharmaceutical industry. Follow him on Facebook.

Portions of this blog may also be found in the Inquirer's Sunday Health Section.

Reach David at or 215-854-4506.

David Sell Staff Writer
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