December 6, 2011
There is a surprising reason why the government won’t go after drug companies for serious crimes.
It is because government programs like Medicare, Medicaid, and the Veterans Administration would then be barred from doing business with them!
In 1999 the FDA approved Vioxx, a drug created by Merck and Co. to treat arthritis. Vioxx was pulled off the market in 2004 because evidence showed it greatly increased the risk of heart attack in the 25 million Americans who had taken the drug. Some 50,000 patients sued, and 27,000 of the plaintiffs received $4.85 billion in settlement of their claims.
Last week the Department of Justice announced that Merck has agreed to pay a $321 million criminal fine and plead guilty to one misdemeanor count of illegally introducing a drug into interstate commerce. Merck also is paying $426 million to the federal government and $202 million to state Medicaid agencies. Those payments will settle civil claims that its marketing caused doctors to prescribe and bill the government for Vioxx they otherwise would not have prescribed.
Please note that these settlements are for rather minor infractions—not for deliberately concealing the danger of a killing drug from patients, the medical community, and their investors. Despite the serious consequences of Merck’s actions, the government won’t prosecute them for any serious charges—because, if they did and won, it would mean they would have to stop doing business with Merck in the future! Federal law makes it illegal for Medicare and Medicaid to do business with “an excluded or debarred entity resulting from serious criminal charges.”
This means that when a company becomes too deeply enmeshed in the government’s business, these companies simply become too big to prosecute!
Paying fines without serious criminal charges does not appear to be enough of a deterrent. Read More