GlaxoSmithKline, Drug Marketing, and the Problem of Disease Inflation

Earlier this month, the Department of Justice announced that the pharmaceutical giant GlaxoSmithKline had agreed to settle criminal and civil complaints related to its illegal marketing of the popular antidepressants Paxil and Wellbutrin from the late 1990s through the mid-2000s. In addition to a number of other offenses, the settlement also covered allegations that the company had failed to report safety data to the Food and Drug Administration (FDA) for its diabetes drug Avandia. In order to settle the case, the company agreed to plead guilty to promoting Paxil and Wellbutrin for uses that had not been approved by the FDA. The company also agreed to pay $3 billion in criminal and civil fines, which might seem like a huge amount of money until you realize that Paxil, Wellbutrin, and Avandia earned the company at least $28 billion during the period covered by the settlement. As one industry analyst commented, “a $3 billion settlement for half a dozen drugs over 10 years can be rationalized as the cost of doing business.”

For those of us interested in the machinations of Big Pharma, neither GlaxoSmithKline’s behavior nor the terms of the agreement are particularly surprising. Over the past decade these types of settlements have become increasingly common. In 2007, for example, Purdue Pharma settled for the relatively modest sum of $634 million for illegally promoting OxyContin as less addictive than other painkillers. In 2009, Eli Lilly settled for $1.4 billion for illegally marketing Zyprexa for the treatment of dementia, among other problems, despite being approved only for the use of schizophrenia and bipolar disorder. In the same year, Pfizer settled for $2.3 billion for illegally promoted its painkiller Bextra, and in 2011 Merck agreed to pay $950 million to settle complaints that it had illegally marketed Vioxx. In May of this year, Abbott Laboratories settled for $1.6 billion for illegally marketing an anti-seizure drug. Any day now, the Justice Department is expected to announce that Johnson & Johnson has settled claims that it illegally promoted Risperdal, a drug currently approved for the treatment of schizophrenia. The expected settlement is about $2.2 billion. Earlier in the year, a judge in Arkansas had ordered the company to pay $1.2 billion in fines for hiding the dangers of the drug in its promotional efforts. I could go on, but I think you get the point.

There is a tremendous amount to be said about all this, most of which isn’t good, but for the moment I want to focus on the effort to promote drugs for so-called “off-label” use. Under the 1938 Food, Drug, and Cosmetic Act (and subsequent amendments and laws), it is illegal for pharmaceutical companies to promote drugs for uses that are not approved by the FDA, or for the treatment of patients that are outside of the approved age range, or to promote the use of drugs at higher doses than for which they are approved. However, it is perfectly legal for physicians to prescribe drugs for any condition, to any patient population, and in any amount that they see fit. The result is that there is a tremendous incentive for companies to promote their products illegally:

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