Be good or you'll get TWO slaps on the wrist
The Senate voted today to, among other things, double the maximum fine that can be imposed on a drug company for violating drug safety standards. Really cracking down on these guys, aren't we? 'Cause now if it is demonstrated that a company knowingly sells drugs that put people at risk, they can be fined up to $2 million.
Seems like a lot for a fine until you consider the business we're talking about here. Merck, for example, made $5.8 billion profit in 2004 on $22.9 billion of sales. Of that, $1.5 billion came from Vioxx, a drug with Merck was later forced to pull from the market and is at the center of litigation for wrongful deaths.
So the maximum fine Merck could now face is 0.00009% of their yearly income. To put this in perspective, suppose some guy down the street knowingly sells some food that puts lives at risk, and let's say this guy is making a fairly tidy $100,000 per year. And the proportionate fine for this clown? $8.73.
If you had the chance to make $100,000 on drug sales and faced a maximum fine of $8.73 for causing wrongful death, how much time would you spend thinking about not doing it? $8.73 is worth approximately 10 minutes of your time per year.
So yeah. Good thing they doubled that, huh?
Source for financial figures: Merck 2006 annual report.
Seems like a lot for a fine until you consider the business we're talking about here. Merck, for example, made $5.8 billion profit in 2004 on $22.9 billion of sales. Of that, $1.5 billion came from Vioxx, a drug with Merck was later forced to pull from the market and is at the center of litigation for wrongful deaths.
So the maximum fine Merck could now face is 0.00009% of their yearly income. To put this in perspective, suppose some guy down the street knowingly sells some food that puts lives at risk, and let's say this guy is making a fairly tidy $100,000 per year. And the proportionate fine for this clown? $8.73.
If you had the chance to make $100,000 on drug sales and faced a maximum fine of $8.73 for causing wrongful death, how much time would you spend thinking about not doing it? $8.73 is worth approximately 10 minutes of your time per year.
So yeah. Good thing they doubled that, huh?
Source for financial figures: Merck 2006 annual report.