Penalties for Fraud in the Pharmaceutical Industry: A Financial and Reputational Analysis

Abstract

In this study, we examined federal cases involving fraud by pharmaceutical manufacturers between 2000 and 2022, including only publicly held companies whose settlements were at least $1 million. 169 cases were identified. Our goal was to determine if the penalties would simply be a nuisance to the company or if they would have a significant financial impact. In addition, we discussed a private pharmaceutical company and included the findings from a content analysis of public sentiment to assess the lingering impact of fraud on a brand. For both the public and private firms, we found evidence of negative impact, both financial and reputational. We also highlighted the fact that the financial penalties were significant for only a portion of the companies analyzed and that many of the manufacturers continue to commit violations repeatedly, regardless of the penalties assessed.