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Friday, December 17, 2010

Wistleblowing More Lucrative than Biotech

There's this story from a couple months ago (click here)

and the one from NPR today:
by RICHARD KNOX



Chip Somodevilla/Getty Images

Justice Department officials announce a fraud settlement with Pfizer in September 2009 over the marketing of prescription drugs.

Drug companies are now No. 1 when it comes to defrauding the government, leaving defense contractors in the dust.

A report from the consumer group Public Citizen says financial penalties against drug companies under the federal False Claims Act far outstripped defense contractors between 2007 and 2010.

The 147-year-old law was originally enacted to prevent price-gouging on armaments during the Civil War. It's become modern prosecutors' most important tool for rooting out fraud by government contractors.

And lately it's been hard to keep track of all the settlements. Documented pharma fraud has been accelerating lately, Public Citizen says. It looked at fines and settlements paid by drug companies over two decades. Since 1991 those penalties totaled $19.8 billion. But three-quarters of those occurred over the past five years.

Mostly that's from allegedly illegal marketing — promotion of drugs for uses not approved by the Food and Drug Administration. The biggest example to date is Pfizer's $2.3 billion settlement the government reached last year with Pfizer over illegal marketing of the now-withdrawn painkiller Bextra.

That episode's emblematic of the trend. The key whistleblower in the case was John Kopchinski, a West Point grad and former Pfizer drug rep. He reaped more than $51 million for helping government investigators.

Whistleblowers — industry insiders emboldened to air secrets by the promise of a share in the penalties — are one reason lawsuits alleging illegal off-label promotion have piled up at an accelerating pace. Such practices were the subject of a report in October by NPR and the investigative group ProPublica.

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