Posts Tagged ‘oversight’

Defense contractors,who may never live down their reputation of overcharging the government (remember the $640 toilet seats?), can now offer up that there is a worse industry when it comes to cheating the government. A Public Citizen report released today found that the pharmaceutical industry has now become the biggest defrauder of the federal government.

The study found that pharmaceutical cases accounted for at least 25 percent of all federal Federal Claims Act violation payouts over the past decade, compared with 11 percent by the defense industry.

The fraud results were a key finding from a Public Citizen analysis of all major pharmaceutical company civil and criminal settlements on the state and federal levels since 1991 and found that the frequency with which the pharmaceutical industry has allegedly violated federal and state laws has increased at an alarming rate. Of the 165 pharmaceutical industry settlements comprising $19.8 billion in penalties during the past 20 years, 73 percent of the settlements (121) and 75 percent of the dollar amount ($14.8 billion) have occurred during the past five years.

Many of the infractions, and the single largest category of financial penalties, stemmed from the practice of off-label promotion of pharmaceuticals – the illegal promotion of a drug for uses not approved by the Food and Drug Administration (FDA). Off-label promotion can be prosecuted as a criminal offense because of the potential for serious adverse health consequences to patients from such promotional activities. Another major category of federal financial penalties was purposely overcharging for drugs under various federal programs, which constitutes a violation of the FCA.

Here’s the report: (more…)

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Sometimes it takes an accident to force government agencies into doing their job. But do we really need to have an accident for each agency that needs to step up its enforcement? The government needs more oversight and enforcement powers, Public Citizen’s Energy Program Director Tyson Slocum told MSNBC’s Ed Schultz yesterday and Howard Kurtz points out in today’s WaPo. He’s right. Many government agencies have failed to predict problems that should have been pretty obvious to those in the field.


  • The Minerals Management Service (MMS) allowed companies to drill for oil without the necessary permits. BP, the company responsible for the thousands upon thousands of barrels of oil gushing into the Gulf of Mexico, was just one of them. Now 11 workers are dead, oil is coating ocean wildlife and tar balls are beginning to make their way to shore. Countless workers helping to clean up this mess are risking their health, as well. Where was the oversight?
  • The Mine Safety and Health Administration (MHSA) failed to enforce workers’ safety and let thousands of violations stay in limbo while companies appealed; in the meantime, employees’ safety was still being jeopardized. What did we get? An explosion in a West Virginia mine, leaving 29 dead. Massey Energy had been issued two citations that very day. Where was the enforcement?

These are just two examples of government failing to prevent a problem. As Kurtz said:

Is there a single Washington agency that was found to have done its job well in recent years? The SEC was asleep at the switch during the Bernie Madoff swindle and other financial scams (perhaps because some staffers were busy watching porn). The banking agencies let the big Wall Street firms flood the market with junk loans, shaky derivatives and other useless paper. NHTSA was horribly slow in cracking down on Toyota acceleration problems. The Mine Safety and Health Administration couldn’t enforce its own citations before the explosion that killed more than two dozen at Massey Energy’s West Virginia mine. And we all remember FEMA in New Orleans.

Let’s hope the agencies can get with the program before the next big accident happens.

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