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Google to Settle Pharmacy Ad Charges for $500 Million

     
3:50 pm on Aug 24, 2011 (gmt 0)

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Regulators will announce Wednesday that Google will pay $500 million to settle government charges that it has illegally shown ads for online pharmacies that operate outside the law, according to two people briefed on the investigation.

[bits.blogs.nytimes.com...]




Google Inc. has reached a $500 million legal settlement with the U.S. Justice Department to avoid prosecution over allegations that it knowingly accepted hundreds of millions of dollars in ads from Canadian online pharmacies.

The Justice Department said that the forfeiture was one of the largest ever in the U.S. and represented the gross revenue received by Google as a result of Canadian pharmacies advertising on Google, plus gross revenue made by Canadian pharmacies from their sales to U.S. consumers.

The ads resulted in the unlawful importation of controlled and non-controlled prescription drugs into the United States, the Justice Department said.
[online.wsj.com...]
5:01 am on Aug 27, 2011 (gmt 0)

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Justice Department investigators believed that Google Inc's Chief Executive Larry Page knew about improper online pharmacy ads that Google carried, and allowed the ads for years, the Wall Street Journal said...

"Larry Page knew what was going on," Peter Neronha, the Rhode Island U.S. Attorney who led the probe, told the Journal...

Prosecutors found internal emails and documents that, they say, show Page was aware of the allegedly illicit ad sales, the newspaper said...

The Justice Department contends that Google knew it was potentially violating U.S. law since at least 2003, but didn't take effective action to ban the ads until it mounted an undercover sting operation against the Internet search giant in 2009, the journal said.
- [reuters.com...]

But they allow the use of shareholder profits to be used as a "bribe" to avoid prosecution.

"Don't be evil," my arse...
10:08 pm on Aug 29, 2011 (gmt 0)

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[bbc.co.uk ]

Google boss 'knew about' unlicensed pharmacy adverts.

Google's chief executive Larry Page knew that adverts for unlicensed Canadian pharmacies were running on its US site, according to a government prosecutor.
9:24 pm on Aug 30, 2011 (gmt 0)

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Shareholders are now filing suit.

Google Inc's board of directors faces a lawsuit for...what it calls the "illegal importation" of the drugs.



[msnbc.msn.com...]

I wondered about using company (i.e. shareholder) profits to pay off the govt to call off prosecution of the individuals involved. From other sources that is not the basis of this particular suit however. This one appears to revolve around non-disclosure that led to artificially high valuations of G stock.
6:26 pm on Sept 2, 2011 (gmt 0)

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Citizens of the USA pay the highest drug prices in the world.

From an outsider's perspective I find it interesting that the government will prosecute those advertising cheaper prices, but won't enact laws to achieve cheaper prices and are removing the mechanisms that would help those who can't afford their drug costs in the US.


In the USA, there are a large number of folks that just don't see any thing wrong with the medical system as it stands.

7X more expensive, ranked #46 in the world for quality and 40+ million folks without affordable medical care is not a deterrent to this view...

What Google did was wrong – according to the law…
11:36 am on Sept 7, 2011 (gmt 0)

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"Citizens of the USA pay the highest drug prices in the world. "

That's becuase we subsidize the freaking world. Other impose price limits so they rip us off to make up for it. And then we pay indirectly for the free drugs for Africa and other poor countries.

By the way, Google didn't do this to help Americans save on drugs, they did out of sheer greed. And arrogance, because they thought Larry wouldn't go to jail. Which turned out to be true, but at a $500 Million price tag to the shareholders. Were these pharmas even regulated by the Canadian authorities, or there was a chance they'd sell fake drugs?
4:20 pm on Sept 9, 2011 (gmt 0)

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"Were these pharmas even regulated by the Canadian authorities, or there was a chance they'd sell fake drugs?"

...of course not, up here in the great white north we just let pharmaceutical companies run amok and do whatever they please...
4:52 pm on Sept 9, 2011 (gmt 0)

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That's becuase we subsidize the freaking world. Other impose price limits so they rip us off to make up for it. And then we pay indirectly for the free drugs for Africa and other poor countries.


This is utter nonsense and completely untrue.

Countries don't impose price limits, they impose profit margin limits. They aren't forcing pharma companies to sell drugs at a loss they are forcing them to have a reasonable markup so that people who need the drugs to stay alive don't have to go broke doing so just to maximize the profits of the pharma companies!

You do subsidize some drugs, but that is in the form of humanitarian relief efforts by your government.....

Private companies aren't being forced to sell a products at a loss causing them to rip off American consumers to recoup that loss. They charge Americans the highest prices in the world because the USA gov sees no reason to assure the quality of life of it's citizens over the profits of a company.

I am fine if someone rips us off on gas because I don't need gas to live. I can choose not to consume it. I am not fine with someone ripping us off for life saving drugs because we need those drugs to live.
5:35 pm on Sept 9, 2011 (gmt 0)

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@Demaestro
profit margins, limits on advertising or what not we pay more. If you limit profit they might not research the saying goes. No one is going to spend $1 Billion to MAYBE make 20% on it, when most fail anyway.

Either way, I know they spend more on ads than research and it's very complicated question. Personally I am not happy paying $150 for antibiotics especially when a $4 one works just as well. It happened to me recently, thanks to the pharmacist I paid just $4 and the refill was free.

Pharmas give away many drugs to Africa since they couldn't possibly afford them and it's not good PR to let millions of people die.
5:42 pm on Sept 9, 2011 (gmt 0)

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What Demaestro said, with a PS that Canadian pharmacies have in fact been recommended to me by US physicians as a reliable source for filling prescriptions when prices here (in California) were ridiculously high. One of these physicians, in fact, got his own prescriptions filled in Canada.

Personally I am not happy paying $150 for antibiotics especially when a $4 one works just as well.

I was about to post a similar example when walkman's post appeared. I've seen the price of an old "classic" antibiotic rise to a comparable range.
6:25 am on Sept 10, 2011 (gmt 0)

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Seems like this settlement was more to buy the Google top brass a pass at having to take the stand in a court of law than anything else.
12:55 pm on Sept 10, 2011 (gmt 0)

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Seems like this settlement was more to buy the Google top brass a pass at having to take the stand in a court of law than anything else.
That's how I see it too. If they had asked for $2 Billion they would have probably gotten it too. Google cannot even deny that they knowingly broke the law and that their top brass, Larry to be be specific, knew it. If they deny it, the agreement is off and the feds will press charges (It was on their settlement.)

However, to b fair, a nice chuck should have come from their personal pile, not shareholder's money. It's not like $20 Billion isn't enough to pay it and have some left.
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