European Drug Company AstraZeneca had its wrist slapped this week by the Food and Drug Administration (‘FDA’). The FDA fined AstraZeneca for illegally promoting the anti-psychotic drug Seroquel and for illegally paying doctors to prescribe the drug. Seroquel has been the best-selling anti-psychotic drug on the market since it was introduced in 1997 and is AstraZenca’s second best-selling drug. FDA fined AstraZeneca $520 million for promoting this powerful drug to prescribing doctors for uses the FDA never approved; including for anxiety, depression and sleeplessness.
Some might think $520 million is a large fine. Consider this, however, AstraZeneca had annual Seroquel sales of more than $2.8 BILLION. That’s right BILLION. Considering annual sales of $2.8 billion for the drug and profit percentages exceeding 30 percent, the fine was only a small percentage of AstraZeneca’s profits from this drug. One could argue that is not much of a deterent. Which might explain why other big drug companies, Merck and Pfizer, have all also been recently fined by the FDA for illegall drug promotion practices. These illegal practices will likely happen again.
If the drug companies can make $7 billion in profit before they have to pay out a multi-million dollar fine, then what incentive is there for the drug companies to change? That is where our civil justice system can help. When 8 or 10 or 12 ordinary common sense Americans tell a drug company or an insurance company or some other large entitled corporation, by an award of money damages, that Americans are just not going to take it anymore, then maybe things will change. I applaud the Obama administration’s FDA for stepping up enforcement of violations of the food and drug laws, but until the drug companies wrongdoing is punished at a level fitting of the crime, nothing will change.