January 2011 Archives

January 28, 2011

Pharmaceutical Companies Are Responsible for the Most Federal Fraud Lawsuits Filed in the U.S.

Q: What Industry do you think is the leader in Federal Fraud Lawsuits in the United States?
A: Pharmaceutical Industries.

Photo credit: mconnors from morguefile.com

According to a report released by False Claims Act comes from pharmaceutical companies. The report shows that Drug Companies are the leader in Federal Fraud Lawsuits. Defense Companies accounted for 11% of fraud settlements, this makes them the second highest in federal fraud lawsuits, in the United States.

Public Citizen was founded in 1971 and serves as the people's voice in the nations capital. It is a nonprofit organization responsible for being the voice of many in all aspects of the government. They go before Congress, the executive branch agencies and the court systems. They challenge various agencies, such as pharmaceutical, nuclear and automotive industries.

The report analyzed civil and criminal settlements under the False Claims Act at the state and federal levels since 1991 in order to determine the leaders in federal fraud suits.

The False Claims Act is a law that allows people who are not affiliated with the government to file actions against federal contractors they accuse of committing claims fraud against the government. People who file under the Act stand to receive a portion of any recovered damages. This act provides a legal tool to counteract fraudulent billings turned in to the federal government. The original False Claims Act was passed in 1863 and it has since been revised. The last revision was in 1986 and since then almost $22 billion has been recovered by the federal government.

Out of the almost $22 billion recovered since 1986, 75% of the money and 73% of the cases happened in the last 5 years. The U.S. Department of Justice (DOJ) files most of these fraud cases that are brought against the pharmaceutical companies. Most of these cases are for attempting to market medications that have not yet been approved by the U.S. Food and Drug Administration (FDA). It is illegal under federal drug regulations for a company to promote their products that have not been approved by the FDA.

In 2009, Pfizer was fined $1.2 billion for illegally marketing the painkiller Bextra. This is currently the largest criminal fraud fine in history. The second highest was Elan Pharmaceuticals. It was fined $203 million for illegally marketing the epilepsy drug Zonegram.

January 19, 2011

Motorist Complaints on the Rise in 2010

As of December 14, 2010, the National Highway Traffic Safety Administration (NHTSA) reported that car complaints were four times higher than in recent years, with over 40,000 formal complaints being made, according to data from Edmunds.com, an auto research site. The majority of the complaints came from drivers of Toyota vehicles, as a result of the massive Toyota recall made in 2010. Toyota accounted for over 25% of the complaints filed in 2010.

The average complaints made in the auto industry were 47 for every 100,000 autos sold. In 2010, these numbers were much higher. Toyota was the auto company that received the most complaints. It had 87 complaints for every 100,000 cars sold. Nissan came in second with 62 complaints for every 100,000 autos sold and Volkswagen came in third with 58 complaints for every 100,000 autos sold. This was a huge increase from the 30 complaints per 100,000 cars sold average in 2009.

Toyota announced in 2010, that it would pay $32.4 million in penalties for their lack of informing safety regulators of their vehicles defects, which left millions of hazardous vehicles on the road. Clarence Ditlow, executive of the Center for Auto Safety stated, "People are now more aware that there is an agency called NHTSA and that you can complain to it. Complaints are a good thing." After a complaint is made, changes are made, and hazardous vehicles are taken off the roads and fixed. All of which are positive outcomes. For more information, visit the NHTSA website at www.nhtsa.gov.