Report: Drug companies biggest defrauders of government

The study also found that alleged violations of state and federal laws by drug makers have been increasing at an "alarming rate": Of the 165 pharmaceutical industry settlements comprising $19.8 billion in penalties during the past 20 years, 73 percent of the settlements (121) and 75 percent of the dollar amount ($14.8 billion) have occurred during the past five years.

"These figures show that the industry has engaged in such activities as dangerous, illegal promotion for unapproved uses of drugs and deliberately overcharging vital government health programs, such as Medicare and Medicaid," study author Sidney Wolfe, who is the director of the Health Research Group at Public Citizen, said in a statement.

The industry trade group Pharmaceutical Research and Manufacturers of America said in a statement that it has taken a tougher stance on compliance since adopting a new code of conduct two years ago.

"Our member companies devote significant resources to internal compliance programs and thorough investigations of any reported misconduct – activities that complement the government’s enforcement efforts. However, we can’t speculate on trends in legal actions," PhRMA Executive Vice President and General Counsel Diane Bieri said in a statement. "In 2008, PhRMA revised and strengthened its Code on Interactions with Healthcare Professionals as part of an ongoing effort to ensure that biopharmaceutical company marketing practices comply with the highest standards, and, in fact, the alleged conduct that formed the basis of the complains at issue in the settlements in Public Citizen’s report likely pre-date the 2008 Code revision.”

The report comes just as the Irish drug maker Elan and its U.S. subsidiary agreed Wednesday to pay more than $203.5 million to resolve criminal and civil charges. Elan is accused of illegally promoting its epilepsy drug Zonegran for uses not approved by the Food and Drug Administration, including as a treatment for bipolar disorder, migraine headaches and even as a weight-loss pill.

Since January 2009, the U.S. Department of Justice has recovered more than $5.8 billion under the False Claims Act, including $2.2 billion in cases involving fraud against federal healthcare programs.

This post was updated at 4:15 p.m. with industry comment