HHS: Misbehaving drugmakers could lose patent rights

Big Pharma has paid big money to resolve big government investigations over the past 10 years--$8 billion, in fact, according to USA Today's calculations. That's no secret to anyone who follows the industry. Nor is it a secret that the companies that found themselves named in Justice Department press releases are still quite happily doing business with Medicare and Medicaid--the very programs they were accused of defrauding.

And it's no trouble to determine why: If Pfizer ($PFE), which inked the biggest Justice Department settlement so far, were barred from Medicare, for instance, then seniors wouldn't have easy access to its cancer treatments Aromasin or Sutent, or to its pain drugs Lyrica and Celebrex, or any of the drug giant's other products.

How to keep companies in line, then? Fines apparently aren't enough; a Health and Human Services official told USA Today that some drugmakers are under investigation for the second or third time. Corporate integrity agreements are "not sufficient to deter further misconduct," Gregory Demske, assistant inspector general for HHS, told the paper. And the department's first attempt to hold individual executives accountable for their companies' misdeeds backfired.

Two new ideas: HHS could revoke a company's patent rights as part of a settlement, Demske said, and that approach could start with cases that are under investigation right now. And Sen. Chuck Grassley has introduced a bill that would give the government more options, such as excluding individuals from HHS business even after they've left the company involved in a settlement.

But a similar bill in the House is already attracting opposition from pharma, the paper notes. At least a dozen pharma and device companies are lobbying against that bill. As for exclusion, PhRMA says it should only apply to execs who knew about the misconduct and didn't try to stop it.

- read the USA Today piece