Wednesday, October 27, 2010

Just the Cost of Doing Business

GlaxoSmithKline, the British drug giant, has agreed to pay $750 million to settle criminal and civil complaints that the company for years knowingly sold contaminated baby ointment and an ineffective antidepressant — the latest in a growing number of whistle-blower lawsuits that drug makers have settled with multimillion-dollar fines.

Altogether, GlaxoSmithKline sold 20 drugs with questionable safety that were made at a huge plant in Puerto Rico that for years was rife with contamination.


$750 million sounds like a lot of money, but here is the key to understanding the issue: "Whistle-blower cases have become so routine that Wall Street no longer takes much notice of individual suits, while the growing trend remains hidden." The facility in question produced $5.5 billion worth of products each year.

So $750 million is just the cost of doing business.

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