Alex Chernavsky drew my attention to a report of the giant fines assessed drug companies for fraudulent marketing. For example,
Merck agreed to pay a fine of $950 million related to the illegal promotion of the painkiller Vioxx, which was withdrawn from the market in 2004 after studies found the drug increased the risk of heart attacks. The company pled guilty to having promoted Vioxx as a treatment for rheumatoid arthritis before it had been approved for that use. The settlement also resolved allegations that Merck made false or misleading statements about the drug’s heart safety to increase sales.
Fines, of course, are supposed to reduce bad behavior. Here are the fines by year:
- 2009: 2 fines
- 2010: 1 fine
- 2011: 1 fine
- 2012: 5 fines
This pattern does not suggest the fines are working. Drug companies, of course, are very big. I would like to see cross-industry comparisons: which industries pay the most in fines per dollar of revenue?