Pharma Deals With The DOJ

A look at the settlement agreements pharma companies have struck with the Department of Justice in the last three years; the size of the deals has declined dramatically since 2012.

Four years ago, pharmaceutical companies were forking out huge payments to the US Department of Justice to resolve allegations of improper marketing of their products.

GlaxoSmithKline PLC set a new record in July 2012 with its $3bn. settlement to resolve three separate government investigations. It was the fourth company to reach a deal in excess of $1bn. The first to do so was Eli Lilly & Co., which in 2009 paid $1.4bn for marketing its atypical antipsychotic Zyprexa (olanzapine) for unapproved uses. That deal was surpassed a few months later when Pfizer Inc. entered a $2.3bn settlement for off-label promotion of four drugs and kickbacks involving nine other products. And Abbott Laboratories Inc. joined the billion dollar club in May 2012 when it agreed to pay $1.5bn and pled guilty to promoting its neurologic drug Depakote (divalproex) off-label. (Also see "The Era Of Billion Dollar Pharma Settlements" - Pink Sheet, 11 Jun, 2012.)

Since then the size of settlements has dropped. Only one company has reached an agreement of that magnitude, Johnson & Johnson with its $2.2bn settlement resolving criminal charges of off-label promotion and kickbacks involving its atypical antipsychotic Risperdal and two other drugs (see chart below of agreements reached in the last three years).

The government was then going after companies primarily for marketing drugs for unapproved uses and making payments to health care providers to induce them to prescribe their products. More recently, the DOJ has begun to look at other practices, particularly those related to drug pricing. (Also see "Pharma Pricing, Non-Profit Ties Get Increasing Scrutiny From Prosecutors" - Pink Sheet, 14 Sep, 2016.)

Drug Maker Settlements With Department of Justice
Year	Company	Settlement
June 2016	Roche and OSI Pharmaceuticals	Companies agreed to pay $67m to resolve claims they misrepresented the effectiveness of the non-small cell lung cancer drug Tarceva (erlotinib), diverting patients from first-line treatments. (Also see "Tarceva Off-Label Marketing Caused 'Earlier' Death, DOJ Alleged" - Pink Sheet, 10 Jun, 2016.)
March 2016	Johnson & Johnson	J&J's Acclarent subsidiary reached an $18m settlement to resolve allegations of off-label promotion of its Relieva Stratus MicroFlow Spacer product as a drug delivery device. On July 2016, the former CEO and former VP of sales were convicted of misdemeanor violations. (Also see "Off-Label Convictions Of Device Execs Could Impact Pharma Sales Reps" - Pink Sheet, 23 Jul, 2016.)
February 2016	Pfizer	After a seven-year legal battle, Pfizer agreed to pay a $784.6m fine to resolve complaint its Wyeth subsidiary offered steep discounts to hospitals that purchased both its oral and IV Protonix (pantoprazole) acid suppressant drugs while reporting higher prices to the government. (Also see "Pfizer Protonix Settlement May Deter Price Bundling" - Pink Sheet, 16 Feb, 2016.)
October 2015	Novartis	Reached a $390m settlement with DOJ and several states to resolve a civil complaint alleging it paid kickbacks to specialty pharmacies to induce them to recommend that patients order Novartis drugs Myfortic (mycophenolic), Exjade (deferasirox), Tasigna (nilotinib), Gleevec (imatinib) and TOBI (tobramycin). (Also see "Does Former Warner Chilcott Exec’s Arrest Portend More Prosecutions?" - Pink Sheet, 2 Nov, 2015.)
October 2015	Warner Chilcott	Pled guilty to illegal promotion of several drugs and agreed to pay $125m to resolve criminal and civil liability alleging kickbacks and improper sales and marketing.
February 2015	AstraZeneca	Reached a $7.9m settlement to resolve allegations it paid kickbacks to Medco Health Solutions for preferred formulary placement of its heartburn drug Nexium (esomeprazole). (Also see "AstraZeneca Settles Nexium Kickback Suit; Deals Prohibiting Authorized Generic Sales Alleged" - Pink Sheet, 11 Feb, 2015.)
January 2015	Daiichi Sankyo	Agreed to pay federal government and state Medicaid programs $39m agreement to resolve allegations it paid kickbacks to induce physicians to prescribe its cardiovascular products.
September 2014	Shire Pharmaceuticals	Agreed to pay $56.5m to resolve civil allegations of improper marketing of several drugs, including that it promoted its attention deficit hyperactivity disorder drug Adderall XR for certain uses without supporting clinical data and overstated the drug's efficacy.
April 2014	Astellas Pharma US	Agreed to pay $7.3m to resolve allegations it marketed the antifungal Mycamine off-label for pediatric use.
March 2014	AstraZeneca	Agreed to pay $27.6m to DOJ and state of Illinois to resolve allegations of kickbacks to one doctor. (Also see "Teva False Claims Settlement Stems From Kickbacks To Single Doctor" - Pink Sheet, 11 Mar, 2014.)
February 2014	Endo Health Solutions and Endo Pharmaceuticals Inc.	Agreed to pay $192.7m to resolve criminal and civil liability from marketing Lidoderm (lidocaine patch) for unapproved uses; Endo admitted the claims in a deferred prosecution agreement. (Also see "Government Briefs: White House Moves On Patent Reform, DOJ Settles Endo Off-Label Complaints" - Pink Sheet, 24 Feb, 2014.)
November 2013	Johnson & Johnson	As part of $2.2bn settlement pled guilty to marketing atypical antipsychotic Risperdal for off-label uses to elderly patients and resolved civil allegations of marketing newer antipsychotic Invega (paliperidone) and congestive heart failure drug Natrecor (nesiritide) for unapproved uses and paying kickbacks to physicians and Omnicare. (Also see "J&J Risperdal Off-Label Settlement Includes Exec Pay Recoupment Provision" - Pink Sheet, 4 Nov, 2013.)
July 2013	Pfizer	Wyeth subsidiary pled guilty to off-label marketing of the immunosuppressive drug Rapamune (sirolimus) and agreed to pay $490.9m to resolve criminal and civil liability. (Also see "Wyeth Rapamune Off-Label Marketing Settlement Will Not Alter Pfizer’s CIA" - Pink Sheet, 30 Jul, 2013.)
May 2013	Ranbaxy	Ranbaxy USA Inc. subsidiary pled guilty to seven felony counts and agreed to pay $500m to settle criminal and civil allegations involving data fraud and drug manufacturing violations. (Also see "Ranbaxy’s $500 Million Settlement Includes Criminal Penalties" - Pink Sheet, 13 May, 2013.)