Whistleblower Law Blog : Whistleblower Lawyer & Attorney : LaBovick Law Firm, Florida : Federal False Claims Act, Qui Tam

Doesn't it just astound you how drug companies can continue to get busted on breaking the law and then pay mind-boggling, incredibly large fines and STILL have the capacity to break the law again?

Pretend you actually owned a drug company.  Even if it wasn't your drug company that was previously caught manipulating doctors, selling off label, and generally breaking any rule or regulation you wish, simply to drive sales - wouldn't another drug company's punishment be enough to scare you away from doing those same actions? Obviously the answer is a resounding NO. I continue to ask myself, how can this be?  This GSK $3 billion settlement proves to me that drug sales over time are so incredibly profitable that breaking the law and paying huge fines is of no consequence to the drug companies!   As a shareholder in large companies it would bother me tremendously to learn that our company is either acting illegally or unethically within the medical community.  

However, we see no shake-out in major shareholders from those drug companies. It will be interesting to see if any large shareholders pull out of GSK now that this settlement has been announced. Institutional shareholders make their decision as to whether to retain the stock of any investment solely based on the level of profit and return on investment over time. They will not consider the moral legal or ethical obligations they have to their shareholders to invest in only those stocks that play by the rules. 

So here is the lesson that we, the public, must learn about corporate behavior:  when thinking about corporate behavior, the only consideration is the bottom line!  There is no room in a corporation's behavior or in an institutional investment strategy for legal, moral or ethical obligations to be upheld unless those decisions negatively impact the profit.  Otherwise, if paying $3 billion makes you $27.5 billion then everyone is happy, right?

As the powerless muddled masses who look at the world around us, we need to support the only social system that protects us (normal, working class people) from them (powerful corporations who can pay $3 billion fines with a smile on their face).  The only weapon the average US Citizen has against the large corporate entity is the power of the jury trial. That is it! No other system keeps law breaking corporate entities in check. Obviously billion dollar fines don't scare them.  If we lose our right to go to court to redress our grievances we will lose our ability to protect ourselves and our loved ones from the profit-motivated amoral decisions of the large corporation. 

Something to think about!

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Politics is the only thing that will save the drug companies from their own illegal schemes. Unless they can gather the forces of the pro-business political wing of America, and change the law, I believe the Federal False Claims Act is working literal magic on the US budget by actually prosecuting drug companies for their illegal marketing of drugs for off-label use.

Today, the Department of Justice Announced a staggering $1,600,000,000 settlement with Abbott Labs. According to the Chicago Tribune (http://www.chicagotribune.com/business/breaking/chi-abbott-to-pay-16b-to-settle-depakote-claims-20120507,0,7263674.story), of the total award, $800,000,000 will resolve the civil case and $700,000,000 will resolve the criminal penalties and $100,000,000 will resolve the state consumer protection actions, which sprung out of the investigation.

How much money did Abbott Lab make to be able to buy themselves out of criminal and civil penalties? What was the giant settlement about? It was about Abbott Labs being accused of illegal marketing practices for its blockbuster drug Depakote. Depakote is an anti-seizure medication, and this settlement has generated a lot of negative press for Abbott. Recently ABC World News reported that the drug was being illegally prescribed in nursing homes nationwide. Abbott was allegedly convincing the nursing homes to use the drugs to treat aggression in dementia patients. In fact, they admitted they trained a special marketing force to teach the nursing homes that the drug was not regulated by the federal laws designed to stop the use of medications for unnecessary purposes in nursing homes. They did this even though they had no credible evidence or testing to show Depakote helped the condition.

There is a definite increase in the Justice Department's desire to prosecute illegal marketing schemes in which drug companies engage. This is especially true when the drug company markets their drug for an "off-label" use. Due to the number of calls we are now receiving to investigate this type of practice, it is almost worth specializing in just off-label drug cases as a law firm. Even in the Abbott settlement the Wall Street Journal is saying Abbott will still plead guilty to some criminal charges as well as to stay on probation for five years, during which time it must self report any probable violations of the law to their probation officer. That is amazing! To pay a staggering fine and then plead guilty to a crime is a harsh penalty.

According to the Washington Post (http://www.washingtonpost.com/national/health-science/abbott-laboratories-agrees-to-16-billion-settlement-over-marketing-of-depakote/2012/05/07/gIQAh5098T_story.html) this settlement is the "second-largest" enforcement action that is the result of the increased enforcement efforts by the Justice Department criminal division concentrating on drug makers off-label or misbranding their drugs in the market.

If you have a question regarding the marketing practices of any drug company, please call the LaBovick Law Group. We have staff trained to understand this type of claim and answer your questions.

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