In recent events, pharmaceutical companies have been under the spotlight for unseemly marketing. A unit of Allergan has agreed to pay USD38 million to settle allegations of paying kickbacks between 2008 and 2012, to encourage doctors to prescribe four of its medicines.

Similar to other drug companies that committed the same practices, the company was found to reward high-prescribing doctors with speaking engagements that were billed as educational sessions. However, according to a whistleblower lawsuit that was filed in 2012 by a former sales rep for Forest Pharmaceuticals, which was later bought over by Allergan, these events, often held in fancy restaurants had another purpose - wooing other doctors to attend.

Allergan had used these methods to boost prescriptions of three medicines - the Bystolic high blood pressure pill, the Namenda treatment for Alzheimer's, and the Savella antidepressant - according to the Department of Justice. The former sales rep, Kurt Kroening, will receive USD7.8 million, before attorney fees, for his trouble.

This recurring behaviour in multiple drug companies is not new.

Whistleblower lawsuits common among pharmaceutical companies

Many pharmaceutical companies have been struck with whistleblower lawsuits by employees who claim to have witnessed unseemly marketing practices. Most of these companies have paid hefty fines to the US and state governments to settle charges of paying kickbacks or illegal promotion.

A total of USD743 million in fines and settlements with the governments was paid from 1991 to 2015, to settle kickback allegations, according to a report by Public Citizen, a consumer advocacy group.

These practices are also common in other countries, making it a global problem for both drug makers and governments.

Three of the world's biggest drug companies - GlaxoSmithKline, AstraZeneca and Novartis - along with two other smaller companies, agreed to pay a total of USD63 million this year, to settle allegations that they violated the US Foreign Corrupt Practices Act as they bribed doctors and government officials to promotes their medicines overseas.

Federal authorities have made good efforts as in the past decade, five drug makers settled claims under the foreign bribery act, and the number of settlements by the pharmaceutical industry has increased.

Pharma companies guilty of fixing generic drug prices

Other methods of illegal marketing practices include price collusion on generic drug prices. And the most recent, on 15 December, a day after the federal government arrested two former executives of Heritage Pharmaceuticals, 20 state attorneys general filed a lawsuit against several pharmaceutical companies, accusing them of conspiring to hike up and fix generic drug prices at consumers' expense.

The federal lawsuit was filed against Heritage Pharmaceuticals, Inc., Aurobindo Pharma USA, Inc., Citron Pharma, LLC, Mayne Pharma (USA), Inc., Mylan Pharmaceuticals, Inc., and Teva Pharmaceuticals USA, Inc., and accused them of fixing the prices of two drugs: doxycycline hyclate, a widely used antibiotic, and glyburide, an oral diabetes medication.

The lawsuit filed in Connecticut, labelled Heritage as the "principal architect and ringleader" that helped organise a "wide-ranging series of conspiracies" to fix prices.

Price hikes affect consumers the most

Connecticut Attorney General George Jepsen who leads the coalition said that significant resources were dedicated to the investigation for more than two years and compelling evidence of collusion and anticompetitive conduct has been found, across many companies that manufacture and market generic drugs in the US.

The other plaintiff states are Delaware, Florida, Hawaii, Idaho, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Nevada, New York, North Dakota, Ohio, Pennsylvania, Virginia, and Washington.

"While the principal architect of the conspiracies addressed in this lawsuit was Heritage Pharmaceuticals, we have evidence of widespread participation in illegal conspiracies across the generic drug industry," Jepsen said.

"Ultimately, it was consumers—and, indeed, our healthcare system as a whole — who paid for these actions through artificially high prices for generic drugs." MIMS

Read more:
Former drug company executives charged with generic drug price collusion
Australian school children reproduce overpriced drug for $2
Pfizer fined £84.2m by UK’s competition regulator for overcharging NHS
Clinical trial halts as two patients die from cerebral edema, FDA to answer questions

Sources:
https://www.statnews.com/pharmalot/2016/12/15/allergan-kickbacks-bribes-namenda/
http://www.commondreams.org/news/2016/12/15/prices-skyrocket-20-states-sue-drug-companies-collusion-conspiracy
http://www.wsj.com/articles/allergan-agrees-to-38-million-settlement-linked-to-marketing-sales-practices-1481834795