A Call to Prosecute Drug Company Fraud As Organized Crime

51 Pages Posted: 17 Jul 2019

See all articles by Eugene McCarthy

Eugene McCarthy

University of Illinois, Springfield; James Madison University - Finance and Business Law Program

Date Written: July 16, 2019

Abstract

This article argues that drug companies operate like the Mafia and that the government should therefore prosecute prescription drug fraud as organized crime under the Racketeering Influenced and Criminal Organizations Act (RICO). RICO provides prosecutors with procedural and evidentiary advantages that specifically target and help combat organized crime. Currently, Food and Drug Administration rules tempt drug company executives to engage in criminal fraud related to the testing, advertising, and sale of prescription drugs. As a result, prescription drugs are the leading cause of accidental death in the U.S. and kill more than 100,000 Americans every year. Despite these tragic outcomes, pharmaceutical executives and other complicit parties face few (if any) criminal sanctions for conducting these fraudulent schemes. Like the Mafia, drug companies utilize organized structures to delegate crimes (and criminal intent) throughout a strict hierarchy in order to avoid meaningful government sanction. A recognition that these executives, researchers, and doctors are engaged in organized crime would help stem this rising tide of corruption by triggering RICO. RICO treats everybody in the crime syndicate equally and does not allow high-ranking members to escape liability simply by having underlings carry out the enterprise’s overt criminal activity. Using RICO, the government joins complicit parties together and prosecutes the defendants for the same offense of participating in a criminal enterprise. A RICO conviction carries a 20-year prison sentence and a mandatory forfeiture of assets. These serious sanctions would force executives and sales representatives to think twice before misrepresenting clinical trial data and bribing doctors to prescribe harmful and ineffective drugs. Potential RICO liability would also dissuade doctors from accepting kickbacks and might even force politicians to reconsider accepting quid-pro-quo campaign contributions from drug company executives.

Suggested Citation

McCarthy, Eugene, A Call to Prosecute Drug Company Fraud As Organized Crime (July 16, 2019). Available at SSRN: https://ssrn.com/abstract=3421124 or http://dx.doi.org/10.2139/ssrn.3421124

Eugene McCarthy (Contact Author)

University of Illinois, Springfield ( email )

Springfield, IL 62703
United States

James Madison University - Finance and Business Law Program ( email )

Zane Showker Hall
Harrisburg, VA 22801
United States

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