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Group puts drug firms atop fraud list

By Matthew Perrone
Associated Press / October 26, 2010

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WASHINGTON — In the 1990s, the pharmaceutical industry repeatedly was named the most profitable industry in the world. More than a decade later, the industry tops a more dubious list: the No. 1 source of fraud-related settlements with the Department of Justice, an advocacy group says.

Pharmaceutical companies made up eight of the government’s top 10 settlements related to fraud in the last year, according to the advocacy group Taxpayers Against Fraud Education Fund.

An insurer and a hospital chain filled out the list.

Topping the list was specialty drug maker Allergan Inc. which paid out $600 million to settle allegations that it marketed the antiwrinkle injection Botox for unapproved uses.

Trailing just behind was AstraZeneca, which paid $520 million over allegations it inappropriately marketed its psychiatric drug Seroquel.

Other companies in the top 10 include Novartis Pharmaceuticals, Forest Laboratories, and Teva Pharmaceuticals.

In recent years, the Department of Justice has increasingly pursued cases of so-called off-label marketing by pharmaceutical companies, reaching record-setting settlements with Pfizer Inc. and Eli Lilly & Co.

Overall, the group estimates that in the fiscal year that ended Sept. 1, government prosecutors collected $3.1 billion under the False Claims Act, which allows the government to collect damages reported by private citizens.