Abstract

Background: Pharmaceutical fraud can be very profitable. Those working in pharmaceuticals are in a tempting position as the nature of the product and supply is complex, making detection of fraud difficult and expensive. However, a reliable pharmaceutical supply can often be a life-or-death situation for patients. Thus, when detection of fraud occurs, a Regulator's Dilemma often emerges (recall a drug for which a supplier is the sole source, or allow a substandard product to be sold)—generally resulting in pharmaceutical companies receiving minimal penalties even for the worst acts. Despite pharmaceutical companies' unique leverage over regulators and profitability, studies are rare in the scientific literature regarding pharmaceutical fraud.

Purpose: The primary aim of this article is to increase awareness of the various types of pharmaceutical frauds. In addition, the secondary objective is to provide insight into the influence economics possesses in motivating pharmaceutical fraud. Method: Case studies and examples of pharmaceutical fraud are described. Reviewed case studies include purchasing and distribution of products from unlicensed sellers, unlawful promotion of Paxil, Wellbutrin, and Avandia, and concealing bladder cancer risk associated with pioglitazone. Economic information is gathered through mining the US Department of Labor Statistics, Govinfo, US Securities and Exchange Commission, companies annual reports, and US Department of Justice databases. Economic screenshots are used to summarize the frauds surrounding economics both within and external to the companies.

Results: Purchasing and distribution of products from unlicensed sellers occurred between December 2006 to August 2009 and took place solely in the US. Economic snapshots of this time show that the US was in an economic recession. During this time raw material costs were high and the pharmaceutical industry was experiencing major lay-offs. The scheme resulted in the company grossing over $50 million-dollar in added proceeds.

The unlawful promotion of Paxil, Wellbutrin, Avandia, Avair and others occurred between 1998 to 2010 on a global scale. The economic snapshot of this time shows the company faced patent expiration of several highly profitable patents during this period, starting in 1997 with Zantac’s expiry and then with the loss of Augmentin in 2002, several years before its patent expiration of 2018. Avandia lost market exclusivity in 2008 and Advair lost market exclusivity in 2010. The company also faced several regulatory challenges. In addition, more than one economic recession occurred during this time including the Asian and US markets. Finally, the concealment of cancer risks with pioglitazone occurred from the approval of the drug in 1999 to the settlement in 2015. Between 1995-1999 the company was growing and had launched several worldwide ventures. In addition to expanding, the company faced regulatory black-box challenges as well as encountering recessions in the US.

Conclusions: History suggests that monetary incentives are motivators in unethical behavior and fraud cases. Economic recessions, patent expirations, and company expansion are among the most consistent economic pressures surrounding the cases studied, suggesting these variables may be predictors of potential drug quality issues.

Document Type

Article

Publication Date

7-2021

Notes/Citation Information

Published in CIC Pharmaceutical Sciences.

© 2021 Authors

The copyright holders have granted the permission for posting the article here.

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