Pharmaceutical industry

Back Pedaling on Kickbacks?

It’s hard not to be suspicious when the Secretary of Health and Human Services promotes a supposed reform by stating that “President Trump has promised American patients a healthcare system with affordable, personalized care, a system that puts you in control, provides peace of mind, and treats you like a human being, not a number. But too often, government regulations have stood in the way of delivering that kind of care.”

Secretary Alex Azar used those dubious statements in a press release about his department’s plan to “modernize and clarify” the regulations that interpret the Physician Self-Referral Law (known as the Stark Law) and the Federal Anti-Kickback Statute.

Azar claims that the rule changes would promote new methods of delivering healthcare based on greater coordination among providers, including those with financial relationships with one another.

The changes are technical in nature, but I cannot help but worry that the scheme would serve to legitimize dubious dealings and enable providers to avoid prosecution under laws that have been in place for several decades.

I have become more familiar with these laws in the course of collecting data for Violation Tracker. The database currently contains more than 360 cases in which kickbacks and bribery are involved as the primary or secondary offense. These cases have resulted in more than $14 billion in fines and settlements involving many of the largest names in pharmaceuticals (Merck, Amgen, Bristol-Myers Squibb, Pfizer, et al.), hospitals (Tenet, HCA, among others) and pharmacies (such as CVS).

The biggest penalty is a $2.2 billion agreement signed by Johnson & Johnson in 2013 to resolve civil and criminal charges of paying kickbacks to physicians to encourage them to prescribe several of its drugs for uses not approved by the Food and Drug Administration.

One of those drugs was the anti-psychotic medication Risperdal, which was only approved for schizophrenia but which J&J was allegedly promoting for other less serious conditions among elderly patients through financial inducements to providers.

In an interesting coincidence, the announcement of the new HHS proposal came at almost exactly the same time that a jury in Philadelphia hit J&J with an $8 billion verdict over its marketing of Risperdal for use by children.

It will be interesting to see whether the new HHS rules on kickbacks, if they go through, manage to distinguish between more innocent financial dealings among providers and the corrupt practices that have been so common among the larger players. Given this administration’s track record on healthcare and so many other issues, we cannot give it the benefit of the doubt.

The Tainted Corporations Dominating the Opioid Industry

The release of a previously confidential database is providing insights into the opioid industry analogous to what would be contained in the secret accounts of all the Mexican drug cartels. The database, known as the Automation of Reports and Consolidated Order System, or ARCOS, is compiled by the U.S. Drug Enforcement Administration. It was made public by the federal judge in Cleveland overseeing a massive lawsuit brought by nearly 2,000 localities against opioid manufacturers and distributors.

A detailed analysis of the database by the Washington Post shows that the industry has been heavily concentrated in the hands of fewer than a dozen large corporations. These companies are among the defendants in the Cleveland case and are increasingly being targeted for their role in generating an epidemic that has caused hundreds of thousands of deaths.

The claims by the corporations that they are not to blame for the crisis is made harder to swallow by the fact that they each have a history of involvement in other types of corporate misconduct. That history, taken from their entries in Violation Tracker, is summarized below.

The Post analysis of ARCOS shows that just six companies distributed three-quarters of the 76 billion oxycodone and hydrocodone pills that saturated the country in the period from 2006 to 2012.

McKesson Corporation, which accounted for 18.4 percent of the pills, has accumulated more than $400 million in total penalties, more than half of which comes from False Claims Act cases. For example, in 2012 it paid $190 million to settle federal allegations that it reported inflated drug pricing information for a large number of prescription drugs, causing Medicaid to overpay for those medications. The company paid another $151 million to settle related allegations brought by 28 state attorneys general in a case not yet in Violation Tracker (but will be added in an expansion later this year).

Walgreens (16.5 percent) is now part of Walgreens Boots Alliance, which has total penalties of $589 million. Nearly half of that comes from a $269 million settlement of False Claims Act allegations of improper billing for insulin pens. In 2013 Walgreens paid $80 million in a Controlled Substances Act case.

Cardinal Health (14 percent) has more than $195 million in penalties, the largest portion of which includes four cases involving violations of the Controlled Substances Act. Among its other controversies: a $35 million settlement with the SEC of allegations it engaged in fraudulent accounting and a $26.8 million settlement with the Federal Trade Commission concerning anti-competitive practices.

AmerisourceBergen (11.7 percent) has accumulated $899 million in penalties, including a $625 million False Claims Act settlement and a $260 million criminal penalty for distributing misbranded oncology drugs.

CVS (7.7 percent) has $850 million in penalties, more than half of which comes from 15 False Claims Act cases. Another $183 million resulted from Controlled Substances Act matters.

Rounding out the list of major distributors is Walmart (6.9 percent), which has accumulated $1.6 billion in penalties, 90 percent of which resulted from wage and hour cases.

According to the Post analysis, three companies accounted for 88 percent of opioid production during the 2006-2012 period.

SpecGx, a subsidiary of Mallinckrodt, accounted for the largest portion, 37.7 percent. Mallinckrodt has $139 million in penalties, including a $100 million antitrust settlement and a $35 million Controlled Substances Act settlement.

Actavis Pharma (34.6 percent) is now owned by Teva Pharmaceuticals, which has more than $2 billion in penalties, most of which comes from cases involving allegations that another subsidiary, Cephalon, engaged in anti-competitive practices and marketed drugs for purposes not approved by the Food and Drug Administration.

The last big manufacturer is Par Pharmaceutical (15.7 percent), a subsidiary of Endo International, which has total penalties of $287 million, including a $192 million settlement for marketing of drugs for unapproved purposes.

Purdue Pharma, which is often the leading target of criticism for the opioid crisis, showed up in the ARCOS database as producing only 3 percent of output.

Given the involvement of these companies in all kinds of corporate misconduct, it is highly unlikely that they were blameless in bringing about the opioid epidemic. Chances are that the lawsuit in Cleveland will result in substantial increases in their penalty totals.

Will Prosecutors Get Tough with the Largest Corporate Lawbreakers?

By the standards of corporate law enforcement, the Justice Department is throwing the book at Insys Therapeutics. To resolve a civil and criminal case alleging that the company paid illegal kickbacks to healthcare providers to market its powerful opioid Subsys, DOJ required Insys to pay a total of $225 million in fines and forfeitures. Its operating subsidiary had to plead guilty to five counts of mail fraud.

A few weeks earlier, a federal jury in Massachusetts delivered guilty verdicts against the Insys founder John Kapoor (photo) and four former top executives on racketeering charges relating to the kickbacks and other actions such as misleading insurance companies about the need for Subsys, which was supposed to be used in limited circumstances by cancer patients but which Insys tried to get prescribed more widely.

Although Insys itself was offered a deferred prosecution agreement, the company has felt the effects of these legal setbacks. It has been forced to file for Chapter 11 bankruptcy, its stock price has plunged, and it has agreed to sell off Subsys.

If Insys ends up going out of business entirely – and if Kapoor and the others end up in prison for a substantial period of time – this will serve as a warning to other players in the pharmaceutical industry that there can be dire consequences for serious misconduct.

Yet the challenge for prosecutors is whether they can apply similar punishments to larger malefactors in the drug business and related sectors. Insys, after all, had only $82 million in revenue last year and has a workforce of only 226. Its disappearance from the scene would not cause major disruptions.

Consider the case of Johnson & Johnson, with over $80 billion in annual revenues and about 135,000 employees. Despite a carefully cultivated image of purity in connection with its products for infants, J&J has been involved in a series of scandals over the past decade. Violation Tracker shows that it has paid out more than $3 billion in penalties.

The company has received a lot of unfavorable attention in recent months in connection with allegations that it covered up internal concerns about possible asbestos contamination of its baby powder and other talc-based products. J&J has been hit with a flood of lawsuits and has already received some massive adverse verdicts.

The company is also on the defensive for its role in the opioid crisis, facing a lawsuit brought by the state of Oklahoma, which has already collected substantial settlements in related cases brought against Purdue Pharma and Teva Pharmaceutics. J&J may wish it had settled.

An expert witness in the case recently accused the company of contributing to a “public health catastrophe” and charged that its behavior in some ways was even worse than that of widely vilified Purdue. It remains to be seen whether a company of the size and prominence of J&J will be subjected to the same kind of federal prosecutorial offensive launched against Insys. It is only when business giants face existential threats for their misdeeds that we may see real change in corporate behavior.

The Other Collusion

The Trump crowd may have escaped prosecution on charges of colluding with the Russians, but another case involving collusion is moving full steam ahead. Attorneys general from 43 states and Puerto Rico are pursuing a blockbuster lawsuit against the generic drug industry on charges of conspiring to artificially inflate and manipulate prices, reduce competition and unreasonably restrain trade for more than 100 different products.

Led by Connecticut Attorney General William Tong (photo), the coalition claims to have extensive evidence in the form of emails, text messages, telephone records, and statements from former company insiders documenting that 20 companies such as Teva, Sandoz and Mylan engaged in a “broad, coordinated and systematic campaign” to conspire with each other to generate prices increases that in some instances exceeded 1,000 percent.

The case, which could result in a multi-billion-dollar settlement, is a reminder that price-fixing, one of the oldest forms of corporate crime, remains a live issue. The main change is the method by which companies collude. Adam Smith’s discussion of the practice in The Wealth of Nations (1776) stated that “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” Now the same results can be achieved electronically, without face-to-face encounters.

Price-fixing accounts for more of the federal criminal cases in Violation Tracker than any other offense type besides environmental matters. The 212 cases have resulted in $10 billion in penalties, including more than two dozen cases in which the defendants had to pay more than $100 million.

Many of those cases involve industries such as auto parts, electronic components and chemicals; in other words, business-to-business transactions. Federal antitrust prosecutors have focused much less on goods purchased by individual consumers.

That’s where the states come in. The current case against the generic drug companies is just the latest in a string of lawsuits in which state AGs have banded together to address anti-competitive practices that affect consumers.

We’re now in the process of collecting data on those cases to add to Violation Tracker. So far, we have identified more than 100 multistate lawsuits involving price-fixing and related matters. Quite a few of these involve drug and vitamin producers.

There have even been some brought against the same generic producers targeted in the new case. For example, in 2000 Mylan agreed to pay $108 million to settle multistate allegations that it conspired with other companies to control the market for generic anti-anxiety drugs.

The past and current allegations against companies such as Teva and Mylan are especially troubling because these generic producers were supposed to be the heroes of the drug industry. Instead of acting as a check on the avaricious impulses of the brand-name producers, it appears that they jumped on the profit-maximization bandwagon. This should serve as another indicator that market forces are not up to the task of eliminating price-gouging in the pharmaceutical industry. Strong government intervention is the only remedy.

Prosecuting Corporate Drug Dealers

It looked like another of the countless perp walks in which a newly arrested drug dealing suspect is paraded before the cameras by prosecutors. But this time the individual in handcuffs was a 75-year-old former chief executive of a major corporate pharmaceutical distributor.

The U.S. Attorney for the Southern District of New York charged Laurence F. Doud III with one count of conspiracy to distribute controlled substances – opioids – which carries a maximum sentence of life in prison and a mandatory minimum sentence of 10 years, and one count of conspiracy to defraud the United States, which carries a maximum prison term of five years.

It is rare enough for corporate executives (or in this case, a retired executive) to be individually prosecuted for anything in the United States. It was even more amazing in this case to see such a person facing the kind of charges normally brought against figures such as El Chapo.

U.S. Attorney Geoffrey Berman made it clear he was sending a message with the prosecution of Doud, who until 2017 ran the Rochester Drug Cooperative (RDC), which is among the top ten pharmaceutical distributors. Berman vowed that in combating the opioid epidemic his office would target not only street-level dealers but also “the executives who illegally distribute drugs from their boardrooms.”

In addition to Doud, Berman brought charges against William Pietruszewski, the company’s former chief compliance officer. Pietruszewski pled guilty to the charges and is said to be cooperating with prosecutors. Doud’s lawyer maintained his client’s innocence and claims Doud is being scapegoated by others at the company.

RDC itself was also targeted in the case, but the company was offered a non-prosecution agreement in exchange for a $20 million fine and an admission that it intentionally violated the federal narcotics laws by distributing dangerous, highly addictive opioids to pharmacy customers that it knew were being sold and used illicitly.

RDC’s deal is just the latest in a series of drug cases brought against companies. Violation Tracker lists about 90 instances in which corporations have been penalized under the Controlled Substances Act, but only six of these were criminal cases.

SDNY has opened an important new front in the battle against corporate involvement in the opioid crisis, complementing the wave of class action lawsuits brought against the likes of Purdue Pharma.

But for the offensive to be truly effective, it needs to target not just former executives like Doud but also those still in their posts. And it needs to go higher up the ladder from the likes of RDC to executives at the big three distributors: AmerisourceBergen Corporation, Cardinal Health, Inc., and McKesson Corporation.

These companies together generate more than half a trillion dollars in annual revenue and control more than 90 percent of the U.S. pharmaceutical wholesale market.

The opioid epidemic is the outcome of one of the most egregious cases of corporate irresponsibility in U.S. history. Both the companies themselves and those who ran them need to prosecuted to the full extent of the law.

Plenty of Blame to Go Around

Called to testify before a Congressional committee about the soaring price of insulin, producers of the life-saving medication tried to give the impression that they were part of the solution rather than the source of the problem. Eli Lilly, Novo Nordisk and Sanofi pointed to their patient assistance programs to argue that help was available to anyone who needed it.

The tactic of offering selective discounts is widely used in the pharmaceutical industry but it seems to be losing its effectiveness as a way of blunting criticism of unjustifiable price boosts. In the hearing before a House investigative subcommittee, the manufacturers had to resort to another maneuver: blaming others in the supply chain. They argued that the real culprits were the big pharmacy benefit managers (PBMs) and the rebates they demand from the producers.

Appearing at the same hearing were representatives of three big PBMs – Optum Rx, Express Scripts and CVS Health – who, not surprisingly, denied responsibility. “I have no idea why the prices are so high, none of it is the fault of rebates,” said Amy Bricker, a senior vice president for Express Scripts.

It remains to be seen whether this mutual finger-pointing will be successful. The truth is probably that both sets of parties deserve plenty of blame. You only have to look at their track records. Each of the companies has a history of breaking the rules.

Eli Lilly has been involved in drug safety controversies at least since the 1950s and marketing controversies for two decades. In 2009 it pleaded guilty to criminal and civil charges of promoting its drug Zyprexa for uses not approved by the Food and Drug Administration. It paid criminal fines and civil settlements totaling $1.4 billion and signed a corporate integrity agreement with the federal government covering its future conduct.

Novo Nordisk, based in Denmark, paid $25 million in 2011 to resolve its own off-label marketing case brought by the U.S. Justice Department. It, too, signed a corporate integrity agreement, yet in 2017 it had to pay more than $58 million to resolve a DOJ False Claims Act case involving one of its diabetes medications.

Sanofi, headquartered in France, and its subsidiaries have been involved in five False Claims Act cases in the United States, for which they have paid a total of more than $436 million. Last year it paid more than $25 million to resolve allegations of foreign bribery.

The PBMs have had issues as well.

In 2012 Express Scripts, now owned by Cigna, had to pay $2.75 million to settle Drug Enforcement Administration allegations that its practices violated the Controlled Substances Act.

CVS Health, which merged with the PBM Caremark in 2007 and recently acquired Aetna, and its subsidiaries have been involved in a dozen Controlled Substances Act cases, paying more than $182 million in settlements. They have also had to pay more than half a billion in 15 False Claims Act cases.

Yet perhaps the most controversial of the PBMs is Optum Rx, which is owned by UnitedHealth Group. A decade ago, Optum, then known as Ingenix, was targeted by the New York Attorney General, among others, for creating a database that allegedly helped insurers shortchange customers on reimbursements for out-of-network claims. Ingenix settled with New York by agreeing to spend $50 million to create a fairer database and entered into a $350 million settlement to resolve a class action lawsuit brought over the issue. It was in the wake of all this bad publicity that Ingenix changed its name to Optum.

Given the growing controversy over the price of insulin and other medications, drug companies may be wishing that they could resort to something like a name change to shield themselves. But the pressure is not going to disappear until there is systemic change in the country’s prescription drug system that puts an end to price gouging.

Resisting the Trump Organization Business Model

A recent 60 Minutes episode provided further evidence of how the pharmaceutical industry successfully pressured federal regulators to allow excessive prescribing of powerful opioids, paving the way for the ongoing epidemic of fatal overdoses. In recent days there have been reports that Purdue Pharma, the company at the center of the crisis, is planning a bankruptcy filing to reduce the risk from the 1,600 lawsuits that have been brought against the company.

These developments illustrate how the main structures that are supposed to deter corporate misconduct – government regulation and the civil justice system – are not up to the task. Despite the endless complaints from the business world about rules and lawsuits, there are in fact few meaningful limits on corporate behavior.

Despite years of evidence showing that many industries dominate and neutralize the government agencies that are supposed to oversee them, the proponents of deregulation all too often carry the day. The current presidential administration has embraced that ideology whole-heartedly and has even tried to promote the idea that relaxed regulation benefits not only corporations but workers and consumers.

Yet there’s growing evidence that what interests Trump most is using regulatory powers to punish his political enemies and reward his friends. That’s the message of new reporting by Jane Mayer in The New Yorker that Trump personally urged the Justice Department to try to block AT&T’s acquisition of Time Warner, apparently thinking that by sinking the deal he would harm Time Warner’s CNN unit and boost its rival, the exceedingly Trump-friendly Fox News.

There were earlier reports that Trump’s criticism of Amazon’s contract with the U.S. Postal Service was an indirect assault on the Washington Post, owned by Amazon CEO Jeff Bezos.

Aside from being an obvious abuse of presidential power, this approach is no better than a “principled” deregulatory stance. While Trump may occasionally direct his ire against companies that deserve to be punished, the vast majority of miscreants will end up being let off the hook.

Many of the same business apologists who criticize regulation also fulminate against lawsuits. These tort reformers don’t explain how else we are supposed to deal with rogue corporations. Nor do they acknowledge that such companies can greatly limit their exposure with the help of the bankruptcy court.

Purdue Pharma would be far from the first corporation to use Chapter 11 in this way. The filing would not shield the company entirely, but it would greatly reduce its financial liability and make it easier to survive the process.

Moreover, the Wall Street Journal pointed out that “Purdue’s assets may not be enough to resolve the company’s potential liability, in part because most of its profits had been regularly transferred to members of the company’s controlling family, the Sacklers.” In other words, much of the corporation’s ill-gotten gains are already out of the reach of the plaintiffs.

When restraints are weak or non-existent, it is more likely that companies will adopt the business model of the Trump Organization, which appears to be that of breaking every rule and cheating everyone it can. Our challenge is to find new ways to fight back.

Dealing Boldly with Big Pharma

Three days after Donald Trump took office in 2017, the Pharmaceutical Research and Manufacturers of America trade association launched a multimillion campaign to bolster its image in the face of criticism from across the political spectrum of exorbitant drug price hikes. Under the banner of Go Boldly, PhRMA sought to persuade lawmakers and the public that biopharmaceutical producers were doing great things to improve our quality of life and were not just price-gouging crooks.

Two years later, the campaign is still in operation, apparently because the public has not been won over. That’s not surprising, given that Big Pharma is still behaving badly. Relieved that the Trump Administration’s drug cost initiative turned out to be toothless, major drug makers are implementing new rounds of price increases.

Promoting the idea that the industry is preoccupied with innovation is also being made more difficult by the announcement that Bristol-Myers Squibb is seeking to spend $74 billion to acquire rival Celgene. The deal would unite two companies that each have been struggling with their cancer treatments.

Bristol’s Opdivo drug has been losing ground to Merck’s Keytruda while Celgene has been experiencing setbacks in clinical trials and is facing a patent expiration in 2022 for its major product Revlimid. A marriage of the two companies would serve mainly as an excuse to eliminate jobs and raise prices, while doing little that would benefit patients.

The merger would also bring together two companies that have checkered legal and regulatory track records. According to Violation Tracker, Bristol has racked up nearly $1 billion in fines and settlements for a wide range of offenses. These include a $515 million settlement with the Justice Department of allegations relating to drug marketing and pricing; a $150 million settlement with the SEC concerning accounting fraud; a $14 million settlement of Foreign Corrupt Practices Act allegations; and a $3.6 million settlement of Clean Air Act violations.

It has also faced criminal charges, including one case in which it paid $300 million and got a deferred prosecution agreement to resolve allegations of accounting manipulation and another in which it pled guilty to lying to the federal government during an investigation of a secret agreement to thwart a generic competitor to its blood thinner Plavix.

For its part, Celgene paid $280 million in 2017 to resolve allegations that it promoted two cancer drugs for uses not approved by the Food and Drug Administration.

The prospect of one ethically challenged and market weakened drug company paying $74 billion to acquire another is emblematic of what is wrong with the U.S. pharmaceutical industry. It provides additional justification for aggressive reforms such as the bill introduced by Bernie Sanders and Ro Khanna that would allow the federal government to authorize generic alternatives to overpriced drug or the proposal by Elizabeth Warren and Jan Schakowsky that the federal government itself produce generic alternatives under certain circumstances.

If we want to Go Boldly, let’s do it with alternatives that empower patients not drugmakers.

Novartis and Cohen: Two of a Kind

“Yesterday was not a good day for Novartis.” That’s what the chief executive of the pharmaceutical giant told his staff in the wake of embarrassing reports that it was among a handful of large corporations that made questionable payments to President Trump’s personal fixer Michael Cohen. Novartis, which initially struggled to come up with a plausible explanation for its $1.2 million contract with Cohen, ultimately admitted it was a “mistake.”

If so, it was not quite a honest mistake. Novartis, like the rest of Big Pharma, was unnerved by the seeming populism of Trump on the issue of drug prices. Yet it also apparently realized this was an administration that was susceptible to outside influences, especially if they came via someone like Cohen, who in 2017 seemed to be a much more significant player than he turned out to be.

It should come as no surprise that Novartis would resort to dubious measures to promote its interests, which include getting federal blessing for its leukemia drug Kymriah, which costs nearly $400,000 for a course of treatment.

The Swiss company has a long history of improper behavior. For example, in 2010 it had to pay $422 million to resolve criminal and civil liability arising from charges that it engaged in illegal marketing of its epilepsy drug Trileptal, including the payment of kickbacks to doctors to get them to prescribe the medication for off-label purposes. In 2015 Novartis agreed to pay $390 million to settle a case brought by the U.S. Attorney in Manhattan accusing it of making illegal kickbacks to get specialty pharmacies to recommend two of its drugs, Exjade and Myfortic.

Novartis does not limit its illicit marketing to the United States. In 2016 the Securities and Exchange Commission announced that the company would pay $25 million to settle charges that it violated the Foreign Corrupt Practices Act when its China-based subsidiaries engaged in pay-to-prescribe schemes to increase sales.

While Novartis seems willing to make questionable payments to sell its products or gain regulatory favor, it has been less interested in paying some of its employees what they should have received in compensation. The company will be featured in a report on wage theft my colleagues and I will publish next month.

That’s because of a collective action lawsuit brought on behalf of the company’s sales representatives, who alleged that they were improperly classified as exempt from overtime pay. In 2012 Novartis paid $99 million to settle the suit.

In 2005 a group of women who had worked as sales reps for Novartis in the United States filed a lawsuit saying they were discriminated against in pay and promotions, especially after becoming pregnant. In 2010 a federal jury ruled in favor of the women, awarding them $3.3 million in compensatory damages and $250 million in punitive damages. Novartis appealed and then settled the case for $152 million.

All of this is to say that Novartis had long engaged in less than pristine business practices and got the impression it could go on doing so with the Trump Administration.

A Nirvana for Rogue Corporations

The SEC’s enforcement action against Theranos Inc. and its founder Elizabeth Holmes puts a new focus on the persistence of corporate crime in the healthcare sector after a period in which the business culprits getting the most attention were banks such as Wells Fargo and automotive companies such as Volkswagen and Takata.

Another reminder of the checkered history of health companies comes in a new report from Public Citizen on the trend in legal penalties imposed on pharmaceutical firms. The study, an update of three previous analyses on the subject done by the group, documents a disturbing trend: Although there is no reason to think that egregious drug company misbehavior has disappeared, aggregate criminal penalties against those firms have plunged.

Public Citizen finds that criminal penalties in 2016-2017 were just $317 million, down 88 percent from four years earlier. Combined federal criminal and civil penalties over the same period of time declined from $8.7 billion to $2.8 billion, a drop of more than two-thirds.

At the heart of this trend, the report finds, is a falloff in penalties from settlements of cases involving the unlawful promotion of prescription drugs. Those penalties are down by 94 percent from their peak in 2012-2013.

It is probably true that Big Pharma has toned down the brazen behavior that led to giant penalties such as the $3 billion imposed on GlaxoSmithKline, the $2.3 billion imposed on Pfizer, the $2.2 billion imposed on Johnson & Johnson, the $1.5 billion imposed on Abbott Laboratories, the $1.4 billion imposed on Eli Lilly, the $950 million imposed on Merck, etc.

One problem that has by no means disappeared is the improper distribution of opioids. Although Purdue Pharma was penalized $461 million in 2007 and various wholesalers and pharmacy chains have been hit with smaller fines since then, there is no indication that the misconduct is receding.

Part of the problem is that the president of the United States has directed little criticism against the drug industry while making inflammatory statements about illicit traffickers, including the suggestion of imposing the death penalty. He has also expressed his admiration for the extra-judicial executions of drug dealers in the Philippines.

The decline in drug industry fines is part of a larger tendency by the Trump Administration to scale back penalties against corporations in all industries. As I previously noted, the latest update to Violation Tracker through the end of Trump’s first 12 months shows a remarkable drop in penalties, especially for the very largest companies in the Fortune 100.

This can be seen as a form of stealth deregulation. Increasingly, Big Pharma and other industries benefit both from rolled-back rulemaking and from diminished financial consequences if they break the rules still on the books. It is truly a nirvana for rogue corporations.