Pharma companies inked settlements of all kinds this year, from deals to resolve off-label marketing investigations to payments in pricing-fraud suits to agreements that ended liability litigation. In fact, drugmakers earmarked more than $4.5 billion to resolve one legal wrangle or another, and at least nine drugmakers were party to those deals.
By our reckoning, GlaxoSmithKline led the settlement tally with more than $2 billion of the total: It settled a host of Avandia liability cases for $460 million, agreed to pay the U.S. government $750 million to settle an investigation into substandard manufacturing, and made a reported $1 billion deal to resolve lawsuits from parents alleging that the antidepressant Paxil caused their children's birth defects.
Meanwhile, AstraZeneca agreed to pay $520 million in civil penalties to wrap up a probe into off-label and other marketing violations with its antipsychotic drug Seroquel, and it settled thousands of Seroquel liability suits for some $11,000 per plaintiff, or around $200 million. Novartis resolved an off-label marketing case--involving epilepsy drugs--for $422.5 million, and it settled gender-bias litigation for $175 million.
Then there was the late summer parade of mismarketing investigations: Allergan said it would pay $600 million to resolve allegations of off-label marketing and other shenanigans with its muscle-and-wrinkle drug Botox; Forest Labs promised to pay $313 million to wrap up its off-label case; and Elan made a $203.5 million deal. Also this year, Johnson & Johnson pledged $81 million to wrap up a probe of its Topamax marketing.
The settlements came so fast and furious that industry observers raised new questions about whether the fines and paybacks actually keep drugmakers from overstepping their bounds. They brought new scrutiny for drugmakers, which found themselves on top of a ranking of industries that have defrauded the U.S. government. And FDA and other federal watchdogs said they'd step up their game by going after drug company managers themselves for violations, rather than just their companies.
Special Report: Big Pharma behaving badly: A timeline of settlements