Emory Law News Center

New analysis questions whether multi-billion-dollar settlements with pharma actually deter
By Reuben Guttman | Emory Law | May 26, 2017

A recently published law review essay questions whether multi-billion-dollar settlements with some of the world’s largest pharmaceutical companies have sufficiently deterred the types of unlawful marketing practices that have drained healthcare dollars and placed patients at risk.

The piece, written by Emory Law Professor Paul Zwier and whistleblower attorney Reuben Guttman, an adjunct professor of law at Emory, also analyzes pharmaceutical pricing, making the claim that price gouging is pervasive where the government has no real ability to bargain for the lowest cost.

The essay, “A Failure of Remedies; the Case of Big Pharma,” analyzes 20 major settlements between the United States Government and the pharmaceutical industry in concluding that traditional remedies have failed to have necessary deterrence value.

Zwier and Guttman question why there are no formal and transparent Justice Department Guidelines for settlements and why cases are resolved without the public, and particularly the medical community, having a full report on how unlawful marketing practices may have impacted the market for honest medical information and, ultimately, the standard of care.  They raise the question of whether the Centers for Medicare and Medicaid Services (CMS) has delegated oversight and payment implementation to private vendors in a manner that has led to inefficiencies and payments for products that are not medically necessary and may cause harm. They also hint that purported research and development costs may be actually expenditures for studies to support unlawful off-label marketing tactics.  

“The data available strongly supports the claim that large pharmaceutical companies have handled large fines as the price of doing business, but it also suggests that neither the fines, nor the corporate integrity agreements, have altered their behavior. Fourteen companies can be categorized as repeat offenders,” the authors note.              

With government expenditure for prescription drugs costing taxpayers billions of dollars annually, the authors hope their analysis in this election cycle will focus debate and cause journalists to ask questions.

Read the full article from the Emory Corporate Governance and Accountability Review

The Emory Corporate Governance and Accountability Review (ECGAR) explores the relationship between the corporation and its stakeholders in the United States and abroad. This online, student-run publication seeks to identify the relevant actors in the corporate arena and addresses squarely how far to each of them corporate responsibility should extend.