Last week Wall Street Journal reported that GlaxoSmithKline PLC would have to pay the US government a sum of $3 billion to settle some of the criminal and civil investigations into whether the company marketed some drugs illegally and defrauded the Medicaid program. The settlement would also resolve a Justice Department probe into GSK’s development and marketing of the diabetes drug Avandia, linked to heart attack risks in several patients across the US. The drug was withdrawn from all over the world last year. According to GSK, the settlement brings to an end the eight-year-old probe into its marketing of top-selling drugs, including the antidepressants Paxil and Wellbutrin, between 1997 and 2004. The investigation was on allegations that GSK promoted Wellbutrin for indications not approved by the US FDA. Just six weeks ago, Pfizer, world’s largest pharmaceutical company also 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 is 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 allegedly involved in illegal marketing of certain drugs and had to agree to make payment to the US government in the recent past.

Apart from the huge financial implications of these settlements, they also caused major dents on the credibility of these top global pharmaceutical companies. Public trust on these once prestigious drug makers has been on the decline for some time now with increasing instances of unethical and sometimes totally illegal marketing practices adopted by them. Market exclusivity for products with the help of worldwide patent protection enabled them to easily indulge in such practices. Frequent findings of serious adverse drug reactions of several of their approved drugs and subsequent withdrawals from the market have further damaged their reputation. The recall of Merck’s blockbuster drug, Vioxx, in 2004, Pfizer’s Bextra in 2005  and Celebrex in 2009 and GSK’s Avandia in 2010 are just a few cases in this regard. With the increasing number of drug failures in the market the US FDA has also become extremely cautious in granting marketing approval for new drugs. It has approved only 21 new drugs in 2010 as against 25 in 2009. The number of new drugs approved remained in the range of 20- 25 by the FDA during the past 4 years. What is driving these multinational drug companies to resort to unethical marketing activities is the fear of steady erosion in their profitability due to patent expiries of the blockbuster drugs and increasing competition from generics. This is at a time, the pipelines of most of top pharma companies are not at all promising. Therefore, serious efforts are necessary to intensify new molecular research and to bring out new drugs for various infectious and life style diseases. Currently, there are no drugs available to cure most of the life style diseases and some of the infectious disease like malaria and drug resistant TB.