Over the course of the past two decades, U.S. spending on prescription drugs increased from $40 billion to more than $230 billion. Illegal drug company activities are one factor contributing to the inflated spending. A recent study looked at trends in federal and state criminal and civil actions against drug companies in order to assess the impact.
Among other findings, the study showed that, while the defense industry used to be the biggest defrauder of the federal government under the False Claims Act, the drug industry has overtaken them. In fact, the drug industry now tops all other industries in the total amount of fraud payments for actions against the federal government under the False Claims Act.
Public Citizen reports:
“The practice of illegal off-label promotion of pharmaceuticals has been responsible for the largest amount of financial penalties levied by the federal government over the past 20 years. This practice can be prosecuted as a criminal offense because of the potential for serious adverse health effects in patients from such activities. Deliberately overcharging state health programs, mainly Medicaid fraud, has been the most common violation against state governments ... [B]oth increased financial penalties and appropriate criminal prosecution of company leadership may provide a more effective deterrent to unlawful behavior by the pharmaceutical industry.”