Legislative proposal would protect an industry frequently accused of defrauding the state
November 3, 2011
The contributions from executives and political action committees of the accused drug companies include $26,285 to Republican Governor Scott Walker; $136,101 to Democratic and Republican legislators and four legislative fundraising committees; $21,700 to GOP Attorney General J.B. Van Hollen whose office represents the state in cases against pharmaceutical companies; and $400 to Lieutenant Governor Rebecca Kleefisch (Table 1). Wisconsin Supreme Court Justices Annette Ziegler and Michael Gableman, who are technically nonpartisan, accepted contributions of $5,000 and $2,500, respectively, from one of the accused companies after they were elected in 2007 and 2008.
By party, elected Republicans accepted $143,111 from the accused companies – more than three times the $41,375 accepted by Democratic legislators.
The totals include individual contributions from June 2004 through 2010 and PAC contributions from June 2004 through June 2011. WDC tracked campaign contributions from pharmaceutical companies beginning in June 2004 when former Democratic Attorney General Peg Lautenschlager filed a state lawsuit against 20 drug makers. By the time she left office in early 2007, Lautenschlager had expanded the lawsuit to include about three dozen drug manufacturers. Van Hollen, who succeeded Lautenschlager, also has partnered with other states to sue additional drug companies.
One of the proposals the legislature is expected to consider at Walker’s request during its current special session would give pharmaceutical companies and medical device manufacturers immunity from lawsuits by people injured by a product approved by the U.S. Food and Drug Administration.
The legislative proposal begs the question whether the industry should get state protection from court action by people hurt by their products when many of the companies in the industry have been accused of defrauding public programs or fraudulent marketing about the effectiveness or safety of their products. It also begs the question whether elected officials should accept campaign contributions from individuals and PACs with corporations accused of defrauding programs paid for with taxpayer dollars.
A report issued last December showed the pharmaceutical industry had surpassed the defense industry to become the No. 1 defrauder of the federal government, accounting for at least 25 percent of all payments under the federal False Claims Act in the last decade. At the state level, most lawsuits and court settlements involve drug companies accused of deliberately overcharging state health programs like Medicaid and Medicare, according to the Public Citizen report.
A more recent report issued in late October by the Center for Justice & Democracy at New York Law School cited a 2009 decision by the U.S. Supreme Court that said granting the drug industry immunity from lawsuits was bad public policy. The conservative high court said in Wyeth v. Levine that state lawsuits are an added layer of consumer protection that help reveal long-term problems with drugs that injure and kill people that are not detected in FDA testing and are an incentive for manufacturers to disclose safety risks more promptly.
The state has collected about $75 million in Medicaid program reimbursements, forfeitures and other costs from 44 out-of-court settlements and awards with drug makers since mid-2004 to resolve several of the state complaints, according to a Democracy Campaign tally from public statements by the attorney general’s office. In some cases, the drug companies were accused of ongoing violations since the mid-1990s, involving widely used drugs like Claritin, Motrin, Paxil, Zocor, Vioxx and OxyContin among others.
Pfizer and Eli Lilly, whose employees and PACs have contributed the most among drug manufacturers to elected state officials (Table 2), are among the leaders in court settlements and awards paid to Wisconsin in the last seven years. Pfizer has paid the state about $16.4 million, followed by Merck at about $9.3 million and Eli Lilly at $8.4 million.
In a $2.3 billion settlement in 2009 between Pfizer and several states including Wisconsin, Van Hollen said the world’s largest drug maker was accused of fraudulent marketing, selling pain medication for unapproved uses, false statements about an antibiotic’s safety and effectiveness and giving doctors cash and expensive meals, trips and entertainment to get them to prescribe Pfizer’s drugs. Pfizer paid $5 million in restitution to Wisconsin’s Medicaid program.
Pfizer also has been involved in five other court settlements or judgments with the state to settle charges of Medicaid fraud or fraudulent marketing.
Eli Lilly contributed a total of $57,060 to elected officials, including $2,600 to Van Hollen between January 2007 and April 2009 amid two pending cases against the company in which the state ultimately collected about $8.4 million to settle multi-state and federal charges of fraudulent marketing, over billing Medicaid and giving kickbacks to doctors to promote and use Eli Lilly’s drugs.
Overall, contributions from all drug companies since June 2004 totaled $64,710 to Walker, $22,600 to Van Hollen, $169,518 to current legislators and legislative fundraising committees and $2,500 to the lieutenant governor. By party, current Republican officeholders have accepted four times more than Democratic legislators from all drug makers – $209,881 to $49,447.
|Republican Assembly Campaign Committee||R||A||$27,000|
|Van Hollen, J.B.||R||Attorney General||$21,700|
|Committee to Elect a Republican Senate||R||S||$13,500|
|Assembly Democratic Campaign Committee||D||A||$12,500|
|State Senate Democratic Committee||D||S||$11,750|
|Ziegler, Annette||Nonpartisan||Supreme Court||$5,000|
|Gableman, Michael||Nonpartisan||Supreme Court||$2,500|
|Van Roy, Karl||R||A90||$1,000|
|Taylor , Lena||D||S04||$800|
|Vruwink, Amy Sue||D||A70||$700|
|Brooks , Ed||R||A50||$500|
|Kleefisch, Rebecca||R||Lt. Governor||$400|
|Boehringer Ingelheim Pharmaceuticals||$100|