Kentucky's 9th championship might come 12 months later than expected

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By Mike Rutherford  @CardChronicle on Nov 9, 2015, 10:54a

It should as no surprise that the Kentucky Wildcats are once again the No. 1 team in our preseason countdown.

The John Calipari era in Lexington has been loaded with firsts. First program to produce 15 first-round draft picks in five years. First program to bring in five consecutive top-ranked recruiting classes. First team to earn a preseason No. 1 ranking the year after missing the tournament entirely. First program to produce the No. 1 and No. 2 draft pick in the same year. First program since Duke (1990-94) to make four Final Four appearances in five years. First team to start a season 38-0.

The last item on that list was supposed to be different. Perfection was supposed to be the coup de grâce for Kentucky. Forty wins and no losses: the unreachable fruit that only Cal's Cats could grab, and the giant middle finger to the face of anyone with a problem. Instead, it was 38-1 -- good enough to be stuck somewhere between 2013-14 Wichita State and 1990-91 UNLV, and forever locked out of the home of those who hoisted the hardwood on the first Monday in April.

As is the case with any life-altering heartbreak, Big Blue Nation will never be able to fully rid itself of the scar that came with Kentucky's Final Four loss to Wisconsin. There may, however, be a major shot coming in five months that will effectively numb the pain.

Slotting UK at No. 1 has become the safe play for any preseason top 25 countdown, and with good reason. The Wildcats under Calipari have only really made preseason prognosticators look silly once, when a subpar national freshman class and a season-ending injury to star center Nerlens Noel left Kentucky finishing the 2012-13 season in the NIT. Outside of that, Cal has led the Cats to five Elite Eights, four Final Fours, two national title games and brought home the program's eighth NCAA championship. A healthy run at No. 9 figures to start on Nov. 13.

While the subject may rear its head again if they beat reigning national champion Duke on Nov. 17, Kentucky's 2015-16 campaign is unlikely to be dominated by the "pursuit of perfection" talk that was more prevalent than any other throughout last season. The Wildcats will be dealing with what should be a much-improved SEC, and in addition to the Blue Devils, UK has non-conference showdowns with Kansas, UCLA, Ohio State and Louisville. A slip-up at some point before the calendar makes the dramatic flip to March seems like more of an inevitability than it did last November.

Get Ready for New Season

Kentucky, UNC tie for No. 1 in first pollPreviews for our top 25 teams Though Kentucky carries the same coaches' poll ranking into this season as they did 12 months ago, there are few in Lexington who believe this group would match up all that favorably with the team that came so close to being college basketball's first unblemished champion in nearly four decades. That doesn't necessarily mean that the 2015-16 Cats don't have a better shot at finishing their season with some net-cutting.

From the first day of the 2014-15 season, the overwhelming consensus was that a "great" team was going to win the national championship. There were five or six teams that appeared to fit that mold, and it would have been extremely surprising if one of those squads didn't wind up claiming the title. One of them did. It just wasn't Kentucky. The Wildcats were a great team in a season that featured a handful of other great teams. They ran up against one of those teams on the season's final weekend, and that great team was better than they were on that particular night. It's as simple, and as painful, as that.

The sport's landscape would appear to be more navigable in 2015-16. There is no overly apparent dividing line between the group of teams who should rule the season and those who are merely staring up in envy. For Kentucky, a squad with yet another loaded class of newcomers, a returning starter at the most key of positions on a Calipari team, and a couple battle-tested bigs, this is an appealing setup.

Timing isn't everything in college basketball, but it's more important than it is in any other major American sport. Overwhelmingly positive or negative work that took four months to comprise can be completely wiped away by one or two good or bad weeks in March. In keeping with that theme, improved timing might be more important than an improved team when it comes to Kentucky's quest for championship No. 9.

Projected Lineup

PG Tyler Ulis Sophomore

SG Jamal Murray Freshman

SF Isaiah Briscoe Freshman

PF Skal Labissiere Freshman

C Marcus Lee Junior

Key reserves: G Dominique Hawkins (Sophomore), F Alex Poythress (Senior), F Derek Willis (Junior), G Charles Matthews (Freshman), G Mychal Mulder (Junior), F Tai Wynyard (Freshman), C Isaac Humphries (Freshman)

How Kentucky can succeed: Let their latest dose of soon-to-be millionaires do their thing

Nothing that Kentucky has done since John Calipari arrived in 2009 has been ordinary, which is why it's impossible to handle previews of the Wildcats in any of the traditional fashions. Categories like "returning starters" and "percentage of scoring lost" are highly relevant for just about every team in the country, but UK is never like every other team in the country.

Where Karl-Anthony Towns, Willie Cauley-Stein, Trey Lyles and Devin Booker exited, Skal Labissiere, Jamal Murray, Isaiah Briscoe and Tyler Ulis enter. Think about that: four players from the same program were all lottery picks in the same draft, and that same program is sitting here as the projected No. 1 team in college basketball for the very next season. The fact that we don't find this occurrence even the least bit strange anymore might be even more insane than the actual phenomenon itself.

Any team that can count itself among the most talented in the country is going to enjoy a high level of success, and Kentucky appears once again to be loaded with players who will realize their lifelong dreams at next June's NBA Draft.

Recently cleared Labissiere has been at No. 1 or No. 2 on just about every 2016 NBA mock draft since their inception.  Murray never finds himself too far below his teammate, and many believe the Canadian might actually be the bigger star this season. Briscoe is yet another consensus top 10 recruit whose stay in college is expected to be short. Ulis was widely considered to be the best point guard on last year's Kentucky team, and would have likely been the fifth Wildcat to hear his name called in the first round of the draft had he elected to follow the worn-out path of the one-and-done. Instead, he's back for another year in Lexington, and may have a bigger impact than any returning player in the Calipari era.

If you're looking for comparisons between this squad and the 2012 one which cut down the nets in New Orleans, there's this: Calipari has had just one Kentucky team that has received significant production from a senior, the national championship team which saw Darius Miller average just under 10 points per game. This year's team figures to receive a similar boost from Poythress, who was never expected to be around this long, but who now finds himself as the first Calipari recruit to play four years at Kentucky.

The other major parallel is that this team will allow Calipari to get back to letting his guys get up and down the court, a style which was noticeably lacking the past two seasons with the more halfcourt-oriented Harrison twins running the show. It's a shift that figures to please both Big Blue Nation and its front man.

How Kentucky loses early: A culture clash finally goes down in Lexington

There is no lack of evidence to support the widely-held belief that the egos attached to the highest-profile basketball recruits in the AAU era have gotten out of control. With that being the case, maybe the most remarkable aspect of what Calipari has been able to do at UK is that he's brought together the cream of the recruiting crop and never seemed to have much of an issue with his players coming together to pursue one common goal.

There has been nothing so far this summer or fall to indicate that this trend is going to be broken in 2015-16, but if you're looking for a reason why the Cats might be unsuccessful this season, that's about all there is. Maybe Lee, Poythress and Ulis don't take kindly to the 2015 crew once they start stealing the spotlight. Maybe Willis finally freaks out over being a former highly-rated recruit who gets treated like a glorified walk-on. Maybe Mulder smells and it creates a bad locker room environment.

These are the types of things that Kentucky's competition has to hope for in the Calipari era.

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Fireballs are falling to Earth this week!

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Business Insider

Mon, Nov 9, 2015, 11:44pm EST

Fireballs are falling to Earth this week in numbers we won't see for another 10 years — here's how to watch

By Jessica Orwig 6 hours ago

Keep your eyes peeled this week for some spectacular fireballs — extremely bright meteors — lighting up the sky, like this one caught on camera in Thailand November 2:

Right now, Earth is passing through Comet Encke's tail, generating the Taurid meteor shower in the process.

"The best time to view the Taurids is from midnight to 3 am local time," NASA wrote in a Reddit AMA. "There should be a handful per hour. Taurid rates are not high, but the ones you will see will be very bright."

The peak of the shower — when we can see the most meteors per hour — will be the evening of Wednesday, November 11. But Monday and Tuesday night are also a good time to sit back and look up, weather permitting.

The best way to watch any meteor shower is to get far away from city lights and look up, no special equipment required.

Look to Taurus

Meteor showers usually happen when Earth passes through a comet's stream of residual dust and debris in space.

The debris collides with our planet, is pulled toward Earth's center by gravity, and burns up in the atmosphere, producing bright streaks in the night sky that we sometimes refer to as falling stars.

Compared to other meteor showers, the Taurid meteors are relatively sluggish, colliding with Earth at speeds of about 65,000 mph — less than half the speed of the rapid Perseid meteors, which move at about 133,000 mph.

As a result, the Taurids appear to move slowly across the sky, so you can easily spot and track them with your naked eye.

Most of the meteors will likely appear to come from the direction of the constellation Taurus, hence the name Taurid meteors. Between the hours of midnight and 3 a.m., Taurus, shown at right, will be high in the night sky above the southern horizon.

You can use an app like Star Chart to figure out where Taurus will be in your night sky at peak viewing times.

Watch for fireballs

There are a couple of reasons why NASA suspects that this year's Taurid meteor shower will be worth watching.

First is that when the meteor shower peaks on the evening of Wednesday, November 11, the moon will be new.

So there will be no moonlight to outshine the meteors, and observers will have an especially dark night sky to enjoy the show. NASA estimates that during peak hours viewers can see between seven and 10 meteors an hour.

While those numbers don't stack up to the 100 meteors an hour you can sometimes see during the Perseid meteor shower in August, it's still worth watching since some of these meteors are likely to be brilliant fireballs.

That's one of the special features about the Taurid meteor shower: It often produces a number of fireballs, which are meteors defined by their brightness.

Fireballs are at least as bright as Venus, the brightest object in the night sky besides our moon. A single fireball can briefly light up a large chunk of the night sky, and therefore are some of the most exciting meteors to watch for.

2015 is a swarm year

Typically, the Taurid meteor shower is weak and, therefore, neglected by viewers. But this year's meteor shower is different.

About every 10 years, Earth passes through a particularly dense stream of Comet Encke's tail — leftover debris that the wind and heat from the sun blew off the comet's surface and into space. These years are called "swarm years."

The last time we saw a noteworthy Taurid meteor shower was in 2005, which means 2015 is also a swarm year and our lucky, once-in-a-decade opportunity for a good show with above-average meteor rates and more fireballs.
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Health Care in America - Illegal "Off-Label" Conspirators

The Broken American Health Care System

Big Pharma Promotes Illegal “Off-Label” Drug Uses

When Drug Makers’ Profits Outweigh Penalties

By David Evans

Washington Post

Originally Published in Bloomberg News

Sunday, March 21, 2010; G01

http://www.washingtonpost.com/wp-dyn/content/article/2010/03/19/AR2010031905578.html

On the morning of Sept. 2, 2009, another Pfizer unit, Pharmacia agreed to plead guilty to the same crime. This time, Pfizer executives had been instructing more than 100 salespeople to promote Bextra — a drug approved only for the relief of arthritis and menstrual discomfort — for treatment of acute pain of all kinds.

For this new felony, Pfizer paid the largest criminal fine in U.S. history: $1.19 billion. On the same day, it paid $1 billion to settle civil cases involving the off-label promotion of Bextra and three other drugs with the United States and 49 states.

“At the very same time Pfizer was in our office negotiating and resolving the allegations of criminal conduct in 2004, Pfizer was itself in its other operations violating those very same laws,” Loucks, 54, says. “They’ve repeatedly marketed drugs for things they knew they couldn’t demonstrate efficacy for. That’s clearly criminal.”    

The penalties Pfizer paid for promoting Bextra off-label were the latest chapter in the drug’s benighted history. The FDA found Bextra to be so dangerous that Pfizer took it off the market for all uses in 2005.

Across the United States, pharmaceutical companies have pleaded guilty to criminal charges or paid penalties in civil cases when the Justice Department finds that they deceptively marketed drugs for unapproved uses, putting millions of people at risk of chest infections, heart attacks, suicidal impulses or death.

It used to be legal for companies to promote drugs in the United States for any use. Congress banned the practice in 1962, requiring pharmaceutical companies to first prove their drugs were safe and effective for specific uses.

If the law is clear, why do drug companies keep breaking it? The answer lies in economics. Pharmaceutical companies spend about $1 billion to develop and test a new drug. To recoup their investment, the companies want doctors to prescribe their drugs as widely as possible.

Since May 2004, Pfizer, Eli Lilly, Bristol-Myers Squibb and four other drug companies have paid a total of $7 billion in fines and penalties. Six of the companies admitted in court that they marketed medicines for unapproved uses. In September 2007, New York-based Bristol-Myers paid $515 million — without admitting or denying wrongdoing — to federal and state governments in a civil lawsuit brought by the Justice Department. The six other companies pleaded guilty in criminal cases.

 In January 2009, Indianapolis-based Lilly, the largest U.S. psychiatric drugmaker, pleaded guilty and paid $1.42 billion in fines and penalties to settle charges that it had for at least four years illegally marketed Zyprexa, a drug approved for the treatment of schizophrenia, as a remedy for dementia in elderly patients.

In five company-sponsored clinical trials, 31 people out of 1,184 participants died after taking the drug for dementia — twice the death rate for those taking a placebo, according to an article in the Journal of the American Medical Association.

“Marketing departments of many drug companies don’t respect any boundaries of professionalism or the law,” says Jerry Avorn, a professor at Harvard Medical School. “The Pfizer and Lilly cases involved the illegal promotion of drugs that have been shown to cause substantial harm and death to patients.”

The widespread off-label promotion of drugs is yet another manifestation of a health-care system that has become dysfunctional.

“It’s an unbearable cost to a system that’s going broke,” Avorn says. “We can’t even afford to pay for effective, safe therapies.”

About 15 percent of all U.S. drug sales are for unapproved uses without adequate evidence the medicines work, according to a study by Randall Stafford, a medical professor at Stanford University.

 As large as the penalties are for drug companies caught breaking the off-label law, the fines are tiny compared with the firms’ annual revenue.

The $2.3 billion in fines and penalties Pfizer paid for marketing Bextra and three other drugs cited in the Sept. 2 plea agreement for off-label uses amount to just 14 percent of its $16.8 billion in revenue from selling those medicines from 2001 to 2008.

The total of $2.75 billion Pfizer has paid in off-label penalties since 2004 is a little more than 1 percent of the company’s revenue of $245 billion from 2004 to 2008.

Lilly already had a criminal conviction for misbranding a drug when it broke the law again in promoting schizophrenia drug Zyprexa for off-label uses beginning in 1999. The medication provided Lilly with $36 billion in revenue from 2000 to 2008. That’s more than 25 times as much as the total penalties Lilly paid in January.

Companies regard the risk of multimillion-dollar penalties as just another cost of doing business, says Lon Schneider, a professor at the University of Southern California’s Keck School of Medicine in Los Angeles. In 2006, he led a study for the National Institute of Mental Health of off-label use of drugs, including Zyprexa.

“There’s an unwritten business plan,” he says. “They’re drivers that knowingly speed. If stopped, they pay the fine, and then they do it again.”

Paying the doctors

In pushing off-label use of drugs, companies find ready and willing partners in physicians. Under the fragmented system of U.S. medical regulation, it’s legal for doctors to prescribe FDA-approved drugs for any use. The FDA has no authority over doctors, only over drug companies, regarding off-label practices. It’s up to the states to oversee physicians.

“I think the physician community has to take some ownership responsibility and do their own due diligence beyond the sales and marketing person,” says Boston’s former U.S. Attorney Michael Sullivan.

Doctors generally don’t tell people they’re prescribing drugs pitched to them by pharmaceutical salespeople for unapproved treatments, says Peter Lurie, former deputy medical director of Public Citizen, a Washington-based public interest group. Most doctors don’t keep track of FDA-approved uses of drugs, he says.

“The great majority of doctors have no idea; they don’t even understand the distinction between on- and off-labeling,” he says.

Pfizer’s marketing program offered doctors up to $1,000 a day to allow a Pfizer salesperson to spend time with the physician and his patients, according to a whistle-blower lawsuit filed by John Kopchinski, who worked as a salesman at Pfizer from 1992 to 2003.

“By ‘pairing up’ with a physician, the sales representative was able to promote over a period of many hours, without the usual problems of gaining access to prescribing physicians,” Kopchinski says. “In essence, this amounted to Pfizer buying access to physicians.”

Pfizer spokesman Chris Loder says the company stopped what it calls “mentorships” in 2005. He says Pfizer paid doctors $250 a visit. The goal was clear: Get doctors to prescribe a new drug as widely as possible.

Pfizer’s Neurontin is a case in point. The FDA approved the drug as a supplemental medication to treat epilepsy in 1993. Pfizer took in $2.27 billion from sales of Neurontin in 2002. A full 94 percent — $2.12 billion — of that revenue came from off-label use, according to the prosecutors’ 2004 Pfizer sentencing memo.

Since 2004, companies that are now Pfizer divisions have pleaded guilty to off-label marketing of two drugs. Pfizer continued off-label promotions for these medications after buying the firms, according to documents.

Pfizer first stepped into an off-label scheme in 1999, when it offered to buy Warner-Lambert, based in New Jersey. Prosecutors charged that Warner-Lambert marketed Neurontin off-label between 1995 and 1999.

Warner-Lambert admitted doing so for one year in a May 2004 guilty plea for which Pfizer paid $430 million in fines and penalties.

When the FDA approved Neurontin in 1993 to be used only along with other epilepsy drugs, the agency wrote that as a side effect, the drug can induce depression and suicidal thoughts in patients.
The whistle-blower

Much of what prosecutors learned about Warner-Lambert’s marketing of Neurontin comes from a former employee, David Franklin, who holds a Ph.D. in microbiology.

Franklin, 48, whose title at Warner-Lambert was medical liaison, says his job involved more salesmanship than science. He told doctors that Neurontin was the best drug for a dozen off-label uses, including pain relief, bipolar disease and depression.

“Technically, I had responsibility for answering physician questions about all of Parke-Davis’s drugs,” Franklin says. “In practice, my real job was to promote Neurontin for off-label indications heavily — to the exclusion of just about everything else.”

Franklin says he knew such uses of the drug had no scientific support for effectiveness and safety.

 “I was actually undermining their ability to fulfill the Hippocratic oath,” Franklin says, referring to a physician’s pledge to “First, do no harm.”

After working for Warner-Lambert for three months, Franklin quit and filed a whistle-blower lawsuit on behalf of taxpayers to recover money the government paid for illegally promoted drugs. He stood to collect as much as 30 percent of any settlement the company made with the government.

Franklin had to wait four years — until 2000 — before the Justice Department began a criminal investigation. In November 1999, Pfizer made its public offer to buy Warner-Lambert. In January 2000, a federal grand jury in Boston issued subpoenas to Warner-Lambert employees to testify about the marketing of Neurontin.

That March, Warner-Lambert’s annual report disclosed that prosecutors were building a criminal case. Undeterred, Pfizer bought Warner-Lambert in June for $87 billion — the third-largest merger in U.S. history.

More sales than Viagra

A year after the acquisition, the FDA discovered that Neurontin was still being marketed off-label. In a June, 2001 letter to the company, the agency wrote that Pfizer’s promotion of the drug “is misleading and in violation of the Federal Food, Drug and Cosmetics Act.”

Pfizer marketed Neurontin off-label after receiving that letter, agency records show. For 2001, Pfizer reported revenue of $1.75 billion from Neurontin sales, making it the company’s fourth-largest-selling drug that year, ahead of impotence pill Viagra, which Neurontin topped for four years.

As Neurontin sales soared to $2.27 billion in 2002, the FDA found that Pfizer was improperly claiming that the drug was useful for a broader range of brain disorders than scientific evidence had established.

The agency sent a letter dated July 1, 2002, that said the company’s marketing practices were in violation of FDA rules. It asked Pfizer to stop using misleading promotions. Pfizer reported $2.7 billion in revenue from Neurontin in 2003. Overall, the drug has provided Pfizer with $12 billion in revenue.

Pfizer spokesman Chris Loder says, “Regarding the 2001 and 2002 FDA letters, we do not believe that they were suggestive of any continuing off-label promotion.”

For blowing the whistle on his employer, Franklin collected $24.6 million under the False Claims Act.

Prosecutors Loucks and Sullivan got involved in the case after Franklin filed his suit, relying on information from Franklin and their own investigation. Before 2004, prosecutions for off-label marketing were rare.

“Until a couple of these cases became public, companies were probably saying, ‘Everybody does it this way,’ ” Sullivan says.

Loucks had a track record in off-label prosecutions. In 1994, he negotiated a $61 million settlement with C.R. Bard of New Jersey, which pleaded guilty to promoting off-label use of a heart catheter that led to patient deaths.

The off-label campaign

In the January 2004 settlement negotiations with Loucks, Sullivan and two other prosecutors, Pfizer’s lawyers assured the U.S. Attorney’s Office that the company wouldn’t market drugs off-label.

“They asserted that the company understood the rules and had taken steps to assure corporate compliance with the law,” Loucks says. “We remember those promises.”

What Pfizer’s lawyers didn’t tell the prosecutors was that Pfizer was at that moment running an off-label marketing promotion using more than 100 salespeople who were pitching Bextra, according to a Pfizer sales manager who pleaded guilty to misbranding a drug in March 2009.

Pharmacia; Upjohn developed Bextra, which was approved by the FDA in 2001 for only the treatment of arthritis and menstrual discomfort.

Pfizer had by then crafted a joint marketing agreement to sell the drug. In November 2001, Mary Holloway, a Pfizer Northeast regional manager, began illegally training and directing her sales team to market Bextra for the relief of acute pain, Holloway admitted in the plea.

On Dec. 4, 2001, Pfizer executives sent Holloway a copy of a nonpublic FDA letter to the company. The agency had denied Pfizer’s application to market Bextra for acute pain. Clinical trials had shown Bextra could cause heart damage and death.

Pfizer bought Pharmacia from Upjohn in April 2003. From 2001 through 2003, Pharmacia operated first as an independent company and then as a unit of Pfizer, paid doctors more than $5 million in cash to lure them to resorts, where salespeople illegally pitched off-label uses for Bextra, it was admitted.

In her guilty plea, Holloway said her team had solicited hospitals to create protocols to buy Bextra for the unapproved purpose of acute pain relief. Her representatives didn’t mention the increased risk of heart attacks in their marketing.

They told doctors that side effects were no worse than those of a sugar pill, Holloway said.

In 2003, Holloway reported her unit’s off-label promotions of Bextra up the corporate ladder at Pfizer, according to a presentencing memo to the judge written by Robert Ullmann, Holloway’s attorney. Top managers didn’t attempt to halt the illegal conduct, the memo said.

By late 2004, Bextra reached blockbuster status, with annual sales of $1.29 billion. Holloway promoted Bextra until the FDA asked Pfizer in April 2005 to pull it from the market for all uses.

The agency concluded that the drug increased the risk of heart attacks, chest infections and strokes in cardiac surgery patients. In June 2009, Holloway, 47, was sentenced to two years on probation and fined $75,000. She didn’t return phone calls seeking comment.

‘We regret . . . ‘

By 2007, the criminal and civil cases against Pfizer, its employees and its subsidiaries had begun to mount. The tally of drugs cited by federal prosecutors for off-label promotion reached six by 2009. In April 2007, Pfizer pleaded guilty to a felony charge of offering a $12 million kickback to a pharmacy benefit manager. Pfizer paid a criminal fine of $19.7 million. In September 2009, Pfizer agreed to pay $2.2 billion in fines and penalties. Pfizer pleaded guilty to a felony charge of misbranding Bextra with the intent to defraud. After the settlement, Pfizer general counsel Amy Schulman said the company had learned its lesson.

“We regret certain actions we’ve taken in the past,” she said. “Corporate integrity is an absolute priority for Pfizer.”
 
One reason drug companies keep breaking the law may be because prosecutors and judges have been unwilling to use the ultimate sanction — a felony conviction that would exclude a company from selling its drugs for reimbursement by state health programs and federal Medicare.

At Pfizer’s Pharmacia sentencing in October, U.S. District Court Judge Douglas Woodlock said companies don’t appear to take the law seriously. “It has become something of a cost of doing business for some of these corporations, to shed their skin like certain animals and leave the skin and move on,” he said.

As prosecutors continue to uncover patterns of deceit in off-label marketing, millions of patients across the nation remain in the dark. Doctors often choose the medications based on dishonest marketing by drug company salesmen.

Loucks says that putting an end to the criminal off-label schemes will be difficult. As drugmakers repeatedly plead guilty, they’ve shown they’re willing to pay hundreds of millions of dollars in fines as a cost of generating billions in revenue.

The best hope, Loucks says, is that drug companies actually honor the promises they keep making — and keep breaking — to obey the law of the land.

As much as $100 million for health-care fraud enforcement is tied up in the stalled reform legislation, according to Loucks.

“It will be increasingly hard for the threat of exclusion to seem credible and thus serve as a deterrent to bad corporate behavior,” he says, “unless Congress supports health-care fraud prosecutions with more money.”

A version of this story originally appeared in Bloomberg Markets Magazine. It was awarded a 2010 Society of American Business Editors and Writers award for enterprise reporting and general excellence.
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Health Care in America - Increasing Criminal and Civil Monetary Penalties Against the Pharmaceutical Industry

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The Broken American Health Care System

Rapidly Increasing Criminal and Civil Monetary Penalties Against the Pharmaceutical Industry: 1991 to 2010

Sammy Almashat, M.D., M.P.H, Charles Preston, M.D., M.P.H, Timothy Waterman, B.S., Sidney Wolfe, M.D.

Public Citizen’s Health Research

Group EXECUTIVE SUMMARY

Background

U.S. spending on prescription drugs has increased from $40 billion in 1990 to$234 billion in 2008. In this era of rapidly rising drug costs, the illegal pharmaceutical company activities that have contributed to such inflated spending have garnered a significant amount of media attention. Recent billion-dollar settlements with two of the largest pharmaceutical companies in the world, Eli Lilly and Pfizer, provide evidence of the enormous scale of this wrong doing.  However, the total size, varied nature, and potential impact of these illegal and potentially dangerous activities have not been previously analyzed. This study examined trends from 1991 to the present in federal and state criminal and civil actions against pharmaceutical companies in order to address these questions.

Analysis

The purpose of this study was to compile a comprehensive database of all major criminal and civil settlements between federal and state governments and pharmaceutical companies. Press releases from both federal and state governments, in addition to existing online databases, were used to identify all settlements of at least $1 million during the past 20 years.

Main Findings

• Of the 165 settlements comprising $19.8 billion in penalties during this 20-year interval, 73 percent of the settlements (121) and 75 percent of the penalties ($14.8 billion) have occurred in just the past five years (2006-2010).
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• Four companies (GlaxoSmithKline, Pfizer, Eli Lilly, and Schering-Plough) accounted for more than half (53 percent or $10.5 billion) of all financial penalties imposed over the past two decades. These leading violators were among the world’s largest pharmaceutical companies.
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• While the defense industry used to be the biggest defrauder of the federal  government under the False Claims Act (FCA), a law enacted in 1863 to prevent defense contractor fraud, the pharmaceutical industry has greatly overtaken the defense industry in recent years. The pharmaceutical industry now tops not only the defense industry, but all other industries in the total amount of fraud payments for actions against the federal government under the False Claims Act.
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• The practice of illegal off-label promotion of pharmaceuticals has been responsible for the largest amount of financial penalties levied by the federal government over the past 20 years. This practice can be prosecuted as a criminal offense because of the potential for serious adverse health effects in patients from such activities.
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• Deliberately overcharging state health programs, mainly Medicaid fraud, has been the most common violation against state governments and is responsible for the largest amount of financial penalties levied by these governments. This type of violation is also the main factor in the considerable increase in state settlements with pharmaceutical companies over time.
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• Former pharmaceutical company employees and other “whistleblowers " have been instrumental in bringing to light the most egregious violations and have been responsible for initiating the largest number of federal settlements over the past 10 years. From 1991 through 2000, qui tam (whistleblower) cases made up only 9 percent of payouts to the government, but from 2001 through 2010, they comprised 67 percent of total payouts.

Conclusion

Over the past two decades, especially during the past 10 years, there has been a marked increase in both the number of government settlements with pharmaceutical companies and the size of the accompanying financial penalties.  The reasons for these increases are likely related to a combination of increased violations by companies and increased enforcement on the part of federal and state governments.  The danger to public safety and the loss of state and federal dollars that comes with these violations require a more robust response than the government’s current practices. Given the relatively small size of current financial penalties when compared to the perpetrating companies’ profits, both increased financial penalties and appropriate criminal prosecution of company leadership may provide a more effective deterrent to unlawful behavior by the pharmaceutical industry.

Worst Offenders and Largest Settlements

Individual Companies: Total Penalties, 1991-2010

There are 20 pharmaceutical companies that paid a total of at least $100 million each in financial penalties over the past 20 years. The four worst offenders, with at least $1 billion in penalties each, were GlaxoSmithKline, Pfizer, Eli Lilly, and Schering-Plough. Together they accounted for more than half (53percent) of all financial penalties paid out by pharmaceutical companies.

Twenty Largest Settlements, 1991-2010

The 20 largest settlements over the past two decades follow. In the largest settlement of the past 20 years, GlaxoSmithKline agreed to pay the federal government $3.4 billion in 2006 for failing to pay required taxes over a 17-year period.

The second and third largest settlements included the two largest criminal fines ever levied by the federal government against any company. In January 2009, Eli Lilly was forced to pay $515 million (the largest criminal fine ever received by a corporation at that time) and Pfizer, later that year, was fined$1.2 billion (the largest criminal fine ever imposed in the U.S.). Both companies were fined for illegal off-label promotion.

The majority (14) of the 20 largest settlements have occurred within the past five years (2006-2010), consistent with the dramatic increase in pharmaceutical industry financial penalties in recent years.  Of note, almost all cases (16 of 20) involved violations of the federal FCA, at least in part. Multiple blockbuster drugs (i.e., those with sales exceeding $1 billion per year), such as Neurontin (gabapentin), were involved in these settlements. For example, in the Pfizer case of 2004, the company was charged with illegal off-label promotion of Neurontin, a drug which in 2002 generated 94 percent of its $2.27-billion revenue from off-label use.

Table 2. Pharmaceutical Company Penalties: Worst Offenders

Company - Fine in millions of dollars - Percent of Total

GlaxoSmithKline                                     4501              22.7

Pfizer                                                            2935             14.8

Eli Lilly                                                        1712               8.6

Schering-Plough                                      1339               6.8

Bristol-Myers Squibb                             890                4.5

AstraZeneca                                               883                4.5

TAP Pharmaceutical Products            875                4.4

Merck                                                           806                4.1

Serono                                                          704                3.6

Purdue                                                         620                3.1

Allergan                                                      600                3.0

Novartis                                                       524                2.6

Cephalon                                                     425                 2.1

Johnson & Johnson                                353                 1.8

Forest Laboratories                                313                 1.6

Sanofi-aventis                                           310                 1.6

Bayer                                                            301                 1.5

Mylan                                                           267                 1.3

Teva                                                              181                 0.9

King Pharmaceuticals                          167                 0.8

Other                                                          595                 3.0

*Parent company names are current names without corporate (e.g. inc. or plc) designations. If company is non-existent now, name at time of most recent settlement was used.**Data for 2010 include only the first 10 months of the calendar year (through Nov. 1, 2010)***Percent of $19.813 billion in overall penalties. Percents do not add up to 100% as some cases were excluded due to inability to determine individual company share in settlement.

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