10 Largest Settlements and Judgments
Healthcare advocacy group Public Citizen did its recent update report on the number of criminal and civil judgments and settlements against pharma in the last couple of years. It found 74 settlements, totaling $10.2 billion in financial penalties, stemming from both federal and state actions between Nov. 2, 2010, the cutoff for a previous report, and July 18, 2012, when it quit counting.
In the first half of 2012 alone, a record year for both federal and state financial recoveries, there were $5 billion and $1.6 billion in settlements, respectively.
Among Public Citizen's findings was that much of the growth stemmed from states deciding to take on Big Pharma by themselves. The upside for a state in going solo is that it can sometimes employ the same approach and evidence used by federal prosecutors, adding little to the prosecution itself. If the state loses, it gets nothing, but if it is victorious, it gets the entire award. Arkansas, for example, won a $1.2 billion verdict this year against Johnson & Johnson ($JNJ) for its Risperdal marketing. J&J is appealing the verdict as excessive, but the state still stands to reap a sizeable amount, which could go a long way toward covering line items like state Medicaid costs.
Public Citizen found that single-state settlements accounted for nearly 60% of all settlements since the beginning of 2009, compared with only 25% of settlements prior to 2009. Going back to 1991, when it registered the first pharma settlement of size, 27 states have reached at least one single-state settlement with a pharmaceutical company. Kentucky leads the pack with 17 solo settlements. Texas boasts the highest number of single-state settlements in cases initiated by private whistleblowers, 6.
Since 2008, Public Citizen found that "single-state settlements have become, by far, the predominant type of state settlement, with 98 such settlements compared with 15 multi-state settlements."
Three of the 10 largest settlements and judgments in the 20-month period were single-state settlements. The report's researchers were unable to determine what prompted some states to take actions individually, and while federal penalties still make up the bulk of the cost to pharma, aggressive states have clearly added to the litigation risk for drugmakers. Click here to check out the full report >> -- Eric Palmer (email | Twitter)