Schering-Plough is now facing eight lawsuits in coordinated federal MDL proceedings in Newark. These lawsuits follow a plea agreement in which the company agreed to pay $435 million to settle criminal and civil charges stemming from its improper, off-label marketing programs and payment of “kickbacks” to prescribing physicians. The pending lawsuits involve several popular Schering-Plough drugs: Intron and PEG-Intron (chronic hepatitis), Temodar (brain tumors), Eulexin (prostate cancer), Integrillin (heart conditions), and Fareston (breast cancer). One of the examples of improper conduct by Schering-Plough was the payment of $1,000 to $1,500 for each patient that prescribing physicians enrolled in a clinical trial for a cancer drug that, apparently, Schering never even sought to have approved for use.
The $435 million settlement was the third such settlement in five years for the company, which has paid approximately $1.3 billion in civil and criminal fines since 2002. However, Schering-Plough is not alone in this type of conduct. Years of pharmaceutical litigation have shown that it is not uncommon for drug company sales forces to reward their highest prescribing physicians with invitations to participate in small studies of somewhat questionable scientific value in exchange for the payment of tens of thousands of dollars.
These lawsuits against Schering-Plough include claims under New Jersey’s Consumer Fraud Act and have been brought by unions and health insurers who allege that they were defrauded into paying for expensive Schering medications when there were other safer, more effective, or cheaper medications available for their members. A similar consumer fraud class action brought by health insurers who paid for Vioxx prescriptions was struck down by the New Jersey Supreme Court last week.
These types of actions represent a new frontier for pharmaceutical litigation, as they focus on how fraudulent pharmaceutical marketing efforts have driven up the costs of prescription drugs. The industry has always tried to shift the focus instead to their investments in research and development, but the truth is that most of their budgets are instead spent on expensive direct-to-consumer television advertising, aggressive sales forces that personally visit physicians on a regular basis, and payments to prescribing physicians for studies to expand the use of their drugs and counter the claims of competing drugs. If we truly want to make drugs affordable, we need to eliminate off-label promotion and kickback schemes and give the FDA the support and legislative authority that it needs in order to properly police the pharmaceutical industry.
For more information on this subject matter, please refer to the section on Drugs, Medical Devices, and Implants.