Several years ago when speaking with a former marketing manager for a large pharmaceutical
company we learned about the company’s operating basis when a “new” product (drug) was
being planned for release. One of the most interesting points was that the company always set
aside a specific and large amount of money for legal and pre-determined volume of lawsuit
settlements. Usually the amount set aside was based on a percentage of the “new” products
sales potential from its initial target market.
Think about that! Based on long experience, the company knew in advance that there would be lawsuit settlements and that they would be
quite significant... so they simply set aside for them.
Just “smart business practices” you’d say? Well, perhaps you are right, but I also suspect that knowing full well their “clinical” studies
usually revealed, though they continue to get caught withholding the fact, significant adverse side effects and even deaths due to these
“new” wonder drugs, these set asides were vital to the company’s continued survival. Knowing it so well it became an operating basis; first
conceal the side effects from the public for as long as possible and then finance the lawsuits that would inevitably follow.
If a “new” product would raise revenues of $10 billion, why not set aside $1 billion or even more to pay off those who inevitably suffer
debilitating side effects or the families who lose their sons, daughters, fathers or mothers. And how about another billion to pay off an
Attorney General for catching on to their illegal price fixing, Medicare scams or illegally re-marketing a product for a use not already
approved by the FDA.
Certainly less than humanitarian, this short term “cold business” way of thinking may yet be the downfall for such practices as executives
and stakeholders get closer and closer to being personally held accountable – though thus far magically avoiding jail time. Perhaps even
this is due to the large amount of money spread around through lobby and “promotional” expense accounts.
Associated Press reported today that a subsidiary of Pfizer, Inc. could pay $153 million or more to the state of Wisconsin for artificially
inflating prescription drug prices for years.
A Dane County jury ruled Monday night that Pharmacia, Inc. had violated the state's Medicaid fraud law more than 1.4 million times over a
decade. Each violation carries a minimum of a $100 fine and a maximum of $15,000.
Attorney General J.B. Van Hollen said that means the company will be required to pay at least $144 million when a judge sets fines in
coming weeks unless a settlement is reached. The jury also ordered the company to pay $9 million in damages to compensate the state
for its losses.
Van Hollen said he hoped the jury's verdict would lead to settlements worth hundreds of millions of dollars between the state and 32 other
drug makers it has sued. Three companies have already reached settlements requiring them to pay more than $3 million in restitution to
Medicaid and legal fees.
Van Hollen said the litigation has uncovered "good evidence" drug makers knowingly inflated wholesale prices to get larger payments
from Medicaid, private insurers and consumers.
For example, Pharmacia sold the breast cancer drug Adriamycin for as little as $33.43, according to the lawsuit. But it listed the wholesale
price as $241.36 so providers could get reimbursed for that amount.
It then advertised the $207-plus spread to cancer doctors to give them a financial incentive to provide the drug. The schemes were meant
to increase the drugs' market share, and profit with that, the lawsuit said.
In some cases, doctors, hospitals and pharmacies benefited from the overcharges to Medicaid. In others, most of the money went back to
the manufacturers through chargebacks from wholesalers, it said. In all, drug makers collected more than three-quarters of the retail price,
Van Hollen said.
At a news conference, Van Hollen read from a 1993 internal memo in which an employee of a Pharmacia predecessor wrote that "three
decades of gaming the present reimbursement scheme has provided a lucrative avenue of profit..."
"We as taxpayers, we as consumers, are not going to put up with being 'gamed' by anyone -- no matter how big, no matter how small," Van
In all, he said, the lawsuit challenges the cost of "just about every significant drug out there."
New York-based Pfizer is one of the remaining defendants in the case, along with Johnson & Johnson, Inc., Merck Co., and Bristol-Myers
Knowing what is going on will put you in a better position to intelligently communicate when addressing your government representatives
on the issue. It will also enable you to determine whether your government representatives are working for YOU or working for the
significant payola offered by the drug companies who appear to have their financial lines into many areas.
That is important when elections come up.
Contact your State and Federal government representatives and ask them to ensure justice is brought to bear and the PEOPLE involved
are held accountable. (See: Contact Your Government Representatives) on the WINHS.ORG web site to locate and email your
Thank you, See Related story Pfizer fined over $2Billion
Rudi C. Loehwing
World Institute of Natural Health Sciences www.winhs.org
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The "Business" of Drugs: Pfizer may be hit with
another $153 million in potential legal fines
for Medicaid fraud
World Institute of Natural Health Sciences
Pfizer May be hit with another $153 million in
Potential Legal Fines for Medicaid Fraud
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