Multinational drug companies which earned the reputation and respect for bringing out modern drugs for treating various ailments of humanity in the fifties and sixties of last century are gradually losing all that. Their greed for excessive profits from the sale of drugs is the prime reason for this negative perception. With very few new drugs in the pipeline and loss of patents for several blockbusters during the last four to five years, MNCs seem to be desperate to maintain their super profits. And in that process, they are being caught by the authorities for various unethical and illegal practices. The most recent case is in China where the authorities raided the offices of British drug multinational GSK in Shanghai, Beijing, and Changsha for alleged bribery charges by its sales staff. The company’s activities in China are under investigation since early this month and the authorities are looking for evidences after detaining the senior executives and seizing accounting documents. According to Chinese officials, senior executives of the company had organized fake conferences, over billed for training sessions and paid kickbacks in cash and luxury travel to doctors and government officials contributing to the high prices of drugs sold in China. Before this, GSK came into problem in the US also in November 2011 when the US government ordered GSK to pay a sum of 3 billion dollars to settle some of the criminal and civil investigations into whether the company marketed some drugs illegally and defrauded the Medicaid programme.
GSK is not the only MNC which has been found to be indulging in such unethical and illegal activities in recent years. In mid 2011. Pfizer agreed to pay $14.5 million to the US government to resolve False Claims Act allegations related to its marketing of the drug, Detrol. This was the last of the 10 whistleblower suits filed in the District of Massachusetts and two other districts against the company beginning in 2003. The other nine suits against Pfizer including the one on painkiller, Bextra, were settled or dismissed in 2009 as part of the US government’s global resolution with Pfizer, under which the company agreed to pay $2.3 billion to resolve civil claims and criminal charges regarding a few other drugs. Eli Lilly and Abbott were also reportedly involved in illegal marketing of certain drugs and agreed to make payments to the US government in the recent past. Apart from the financial implications caused by the government actions, the MNCs have also suffered major dents to their credibility after these incidents. In India, a large number of essential drugs are being imported and sold by MNCs at very high prices as the country has not yet imposed any control on prices of patented drugs. Considering good track record of most MNCs in discovering modern drugs for several human ailments in the past should they adopt such a disgraceful path for maintaining high profits? This is a question to be pondered by the top managements and shareholders of these corporations.