The White House, Congress and just about everyone else debating HR 3200 and other pending legislative delights, have overlooked yet another factor in the high cost of health care: Illegal activities by pharmaceutical companies. When caught, they pay large fines (that could be increased) but they also pay large settlements in lawsuits over false claims about their marketed drugs. Under the law, drug companies can only market their drugs for FDA approved uses. Doctors can, however, prescribe them for any use (called off label use). Giant drug maker Pfizer is about to pay the Federal Government the largest settlement of its kind -$2.3 billion – over charges that it illegally promoted several of its drugs.
By the end of the year, Pfizer will have sealed a $68 billion deal to purchase another pharmaceutical company, Wyeth. Time was when Wyeth seemed the most sued pharma company in the world. Wyeth made drugs marketed as Redux and Pondimin, which were used as the fenfluramine half of the fen-phen combination formula for weight reduction that caused valvular heart failure in some patients. [http://en.wikipedia.org/wiki/Fen-phen] It was alleged that Wyeth knew the drug could be fatal and did not withdraw it in a timely manner from the market. They suffered legal damages of over $13 billion – a hefty sum that kept them from being a buyout candidate for many years.
Pfizer and Wyeth are prime examples of the high stakes business big pharma has become. Research costs are substantial, CEO salaries excessive and of course there is the costly retention of large legal departments to fend off lawsuits. Drugs cause changes within the human body and that’s the tricky part – the sometimes costly part.
Congress and the President are in no way thinking of tort reform as part of reducing the cost of health care. When one thinks of tort reform, one immediately thinks of lawsuits directed at health care providers. But what about lawsuits against the drug makers that may need to be capped to keep costs down? In short: here are two large areas of needed cost containment NOT considered in the current debates. Either our leaders are ill informed (no pun intended) or deaf and blind. But of course, how silly of me, they are, for the most part, attorneys and would one attorney tell another attorney that his business practices need to be “managed”?