Consumer Law & Policy Blog

Glaxo Reportedly Settles Charges of Advertising Fraud for $3 Billion; But Is That Enough?

This Washington Post article describes a reported settlement between GlaxoSmithKline and the U.S. government over charges that the drug company fraudulently advertised a number of its drugs, including the diabetes drug Avandia, which has been linked to increased risk of heart attack and stroke. Among other things, the government probe reportedly concerned Medicaid fraud and Glaxo's unlawful pushing of its drugs for off-label uses (that is, uses not approved by the FDA). Although $3 billion isn't pocket change, what if the company makes more money than that from its illegal conduct, and, so, the fine (even with the other negative consequences of the settlement) may not be enough to deter similar conduct in the future? Consider this:

"The size of the penalties, although large, are not as large as the money [the drug companies] make and so they keep doing it over again,” said Sidney M. Wolfe, director of Public Citizen’s health research group. “The only way this is going to stop, or get reversed, is to greatly increase the size of the penalties or to start sending some of the executives to jail, if appropriate.”

 

The Banks Change Their Mind: No Monthly Debit Card Fees

This article explains that even Bank of America and Suntrust, the banks that seemed insistent on imposing monthly debit card fees, have backed off, and it speculates that the Occupy movement has something to do with it. More here.

Gagging Provisions in Settlement Agreements

Plaintiffs in civil rights and consumer cases often agree when they settle not to talk about the underlying facts of the case and/or the settlement amount. These gagging provisions may induce settlement (or bigger settlements than there would be without those provisions), but they can impede the free flow of information on matters of public concern. For instance, Herman Cain now admits that when he headed the National Restaurant Association the Association paid money to one of its employees to settle the employee's claim that Cain had sexually harrassed her. Cain is speaking out. He says there was no sexual harrasment. But according to this Washington Post article, the employee's lawyer says his client would like to speak out, too, but can't because the settlement agreement with the Association gags her. Her lawyer has called on the Association to free the employee to speak about her claims against Cain. We'll see.

HT to Leah Nicholls.

UPDATE (10/3/2011): The employee referred to in this blog entry has decided that she does not want to go public.