While health insurance companies bleed their customers dry, drug companies are picking taxpayers’ pockets. And they can get away with gouging since the government can’t negotiate drug prices. Fortunately, financial penalties against drug companies for fraudulent practices have increased recently. The dean of consumer rights, Ralph Nader, writes about a Public Citizen report by Dr. Sidney Wolfe, that analyzes prosecutions of drug companies under the Federal False Claims Act:
Dr. Wolfe’s team compiled a total of 165 federal and state settlements since 1991 totaling $19.8 billion in penalties. A key finding is that the drug industry’s penalties under the Federal False Claims Act exceed even those assessed against the overcharging defense industry for fraud.
Before we become overly impressed with the cumulative amount of the penalties, specialists in corporate crime law enforcement believe that adding more federal cops on the corporate crime beat, backed by a determined law and order Justice Department with White House backing, would have greatly increased the number of cases and imposition of penalties on these drug industry giants.
Nonetheless, Dr. Wolfe’s study shows that the pace of penalties has picked up over the past five years. This is due to “a combination of increased violations by companies and increased law enforcement on the part of federal and state governments,” says the report.
Still, the paltry fines imposed on drug companies don’t put much of a dent in their profits, and therefore, aren’t much of a deterrent. Wolfe says only jail time for executives would stop the illegal behavior. Well, of course! If you or I stole as little as $10, we’d swiftly be thrown in the slammer. But corporate executives continue to get a pass because they can afford to buy off corrupt politicians who will write laws favoring them. So, when are we finally going to see some drug company fat cats do the perp walk? Hopefully sooner, rather than later.