Jail is not for Big Pharma

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In the largest health care fraud settlement in U.S. history, A federal judge on approved an agreement to fine British drugmaker GlaxoSmithKline for criminal and civil violations involving 10 drugs.

Questions:
1. Do you think fines can deter unlawful behavior at Big Pharma? In your opinion, why didn’t anyone go to jail for these violations?
2. What drugs did the company promote for unapproved uses? What were the uses and what were the risks?
3. What was the fine approved by the agreement? How are fines accounted for in the financial accounting records under GAAP or IFRS? How are fines accounted for in income tax records according to IRS regulations?

Sources:
Associated Press Staff. (2012). GlaxoSmithKline pleads guilty to health fraud, Associated Press, July 5 (Retrievable online at http://www.foxnews.com/us/2012/07/05/glaxosmithkline-pleads-guilty-to-health-fraud/)

NYT Video (2012). Business Day Live, The New York Times, July 3 (Retrievable online at http://video.nytimes.com/video/2012/07/03/business/100000001643644/business-day-live-july-3-2012.html)