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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.
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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..../...
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.
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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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