Google to Settle Pharmacy Ad Charges for $500 Million

[travelin cat]

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...]

[Brett_Tabke]

Wow - that is alot of change for Pharma ads.

[Gibble]

I understand paying the penalty for "gross revenue received by Google as a result of Canadian pharmacies advertising".

But why does google have to pay for "gross revenue made by Canadian pharmacies from their sales to U.S. consumers."? I guess since you can't target the Canadian pharmacies, and it's too costly to go after the U.S. consumers?

Still that part seems wrong

[httpwebwitch]

The forfeiture includes the price of the ads, but also the revenue earned by the pharmacies themselves. Instead of slapping the pharmacies themselves, Google was punished severely for being the "enabler".

That makes Google responsible for the activity of its advertisers. Feels like there's some justice missing there.

[JohnRoy]

> some justice missing there

Let's look on it the other way. It's clear that Google made more than 500 million in this adventure. Anyone would agree to go into a deal, where for example would rake in 1 billion, and leave 1/2 billion in settlement fees.

Furthermore, a settlement is a settlement, based on the pre-consideration of all parties involved. If they all agreed, there's no justice missing.

[bwnbwn]

Let see Google breaks US Law by knowing this, turns a blind eye, racks in the cash at the expense of the US, and local economy. Probably allows countless thousands of illegial drugs across the border, maybe cost a few people their lives, and who knows what else.

Some were it written "The root to all evil is money" wonder were Googles policy of "Do no evil" went.

[httpwebwitch]

It isn't clear that Google earned $500M of advertiser revenue from Canadian pharmacies. It's stated that the settlement covered the ad revenue, but also the revenue earned by those pharmacies by selling drugs illegally to Americans.

I'm sure Google can pay the bill. but they're paying for what I interpret as being someone else's crime.

This leaves Google in a position where they should sue the pharma advertisers to get that money back. Will Google be able to do that?

[Rugles]

But why does google have to pay for "gross revenue made by Canadian pharmacies from their sales to U.S. consumers."?

I am guessing it is punitive.

[bwnbwn]

not on how much they made but "after Google became aware of the investigation" "Google acknowledged that it improperly aided the Canadian pharmacies — which operate illegally by failing to require a prescription or selling counterfeit drugs"

I guess we can take it like this Google violated TOS and as in adsense lost it all. I am sure in the investigation the Govt. had access to all the revenue G brought in and probably just guess at the conversion.

More like Rugles said they are being punished for allowing this to happen. Not like they didn't know. I get emails from time to time my Google Checkout has been disabled because I sell something that violates what they think is a supplement banned in the US, but can do this if so chose.

[MrFewkes]

Shouldnt the owners be jailed for this?

[Freedom]

Schadenfreude for a narcissistic company that is arrogant enough to be hypocritical of it's own "Do No Evil" mantra.

[Demaestro]

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.

Are some of you being serious cause I can't tell?

Probably allows countless thousands of illegial drugs across the border, maybe cost a few people their lives

It isn't illegal drugs, it is reasonably priced prescription drugs. It hasn't cost anyone any lives, where would you get such a thing from? That is insane! Most of the drugs in Canadian pharmacies were manufactured in the USA. It is the same thing you buy but at 25% to 50% less the cost!

they're paying for what I interpret as being someone else's crime

No they aren't because it isn't a crime for Canadian pharmacies to sell to Americans citizens unless they have no prescription. Nor is it a crime for an American to travel to purchase their drugs..... there are laws about bringing some drugs back from other countries but some drugs you are allowed to stock up on and bring back into the USA.

Who committing what crime that Google is paying for in this case?

[willybfriendly]

Justice missing?

If I were to facilitate the "importation" of controlled substances into the US I doubt very much that I would be able to buy my way out from under criminal prosecution for any amount.

Might I suggest that is where the "justice" is missing?

That said, I tend to agree with you Demaestro regarding the exhorbitant prices paid by US consumers for medications. One has to wonder if current law is to protect the consumer, or to protect the pharma industry and its insane profits.

[Seb7]

£500m, that should help the US deficit!

I am surprised at Google, knowingly doing something like this. Who was it that was in the know I wonder.

[austtr]

A fine of that magnitude for a company with a carefully managed brand image usually results is the CEO getting the chop. Wasn't Eric in control when the offenses occurred?

Be interesting to see if Wall St wants retribution.

[bw100]

IMHO, the key word here is "settlement".

A settlement can be considered an indicator of several things, among them the desire of the (potential) defendant to avoid both the costs of litigation and the potential of conviction (if the case goes to court).

Google's business decision is seemingly balanced between those two factors.

Legal bills for a Federal Court trial add-up quickly, and escalate rapidly. The actual trial may be delayed for years, with the lawyers' meters are running the entire time.

Toss in the probability (?) of a conviction,

On Wednesday, the government said Google was aware it was violating U.S. law since at least 2003. However, it "continued to allow Canadian pharmacy advertisers to target consumers in the U.S.," the Justice Department said.

and you've got a "slam-dunk" for a settlement decision by the alleged defendant.

(Emphasis: The company is aware that they are violating U.S. law, but continues the illegal business practice for almost 8 years)!
Google took a (business) risk, they got caught, and now they have to pay. IMHO this is not about "justice" (and with large companies it rarely is), but about a penalty ($ plus future business practice stipulations) to pay for the infraction. Now both the DOJ and Google can continue their respective businesses without the inconvenience of litigation.

Good business decision (settlement) following a previous bad business decision (accepting "offshore" pharmacy advertising for U.S. users of Google's search services).

It would be interesting to learn the "other" (non-financial) terms of the settlement: one can hope that the DOJ takes somewhat of a hard line on this, denying Google any confidentiality stipulation, and allowing publication of the settlement agreement.

Maybe some B-school will select this action for a case study in business ethics.

[ponyboy96]

I'm with WillyB on this. Had this been any of us, we would be in jail and/or out of business. The US has no justice system. If you have money, you get out of jail, if you don't, they throw you under it.

Plenty of cases to prove that true.

[jmccormac]

The !Evil Empire gets nailed for enabling dodgy viagra ads? :) The stench of hypocrisy is overwhelming.

Regards...jmcc

[bwnbwn]

Demaestro not sure were you're coming from because. The main problem is without a physician siging off this patient has been examined and the drug they are taking will help in the cure. Here lies the problem people were buying drugs for what they thought would help, have no clue taking the other medication they were taking would cause a bad reaction or death. I don't know and certainly you don't have a clue as to this may have killed someone. The point is there are laws in the US to follow I assume it would be ok for the US to go around canada laws and do what we want.

It hasn't cost anyone any lives, where would you get such a thing from

BTW this may help understand the problem and why you are way off with your thinking.
[theconference.ca...]

[wildbest]

Here lies the problem people were buying drugs for what they thought would help

Let them decide what is of their best interest. Why do you think they are just idiots that must be protected from harming themselves?

[pageoneresults]

Do No Evil

Quick correction, Google is very clear on this, the exact phrase is...

Don't Be Evil

Big difference between the two.

This lawsuit is all par for the course. Ever notice how Google will just do whatever they want? They know there is potential for litigation but they'll do it anyway knowing that the revenues they make will far exceed any litigation costs.

So, you have to wonder just how much money they made during all of this. For Google, it's the cost of doing business. They probably made a billion or two during that run.

Google Inc. has reached a $500 million legal settlement with the U.S. Justice Department to avoid prosecution.

They bought their way out of it.

[Demaestro]

bwnbwn, I think your confused as to my point. I clearly state that if they have a prescription then there is no other crime other than the ads.

I am sure that there were some companies selling to people without prescriptions, but to assume that all the companies that were advertising pharmacies were illegally selling prescriptions is insane. If the selling without a prescription were that wide spread then the USA and Canadian govs would have done a sting and shut them down.

I am not advocating selling drugs to people without a prescription at all. I am simply saying that I find it sad that your government makes lower drugs prices impossible in your country and makes advertising the places you can get your prescriptions for cheaper illegal.

BTW this may help to understand the problem and why I am not way off with my thinking
[medscape.com...]

I also find it interesting that Google can seemingly buy their way out of a conviction. How does the old saying go.

"It is easier to beg for forgiveness than ask for permission"

I guess in this case it is

"It is easier to buy forgiveness than ask for permission"

[freejung]

This is simply Google admitting that they don't have as much political power as the drug cartels.

With any luck, it'll pi$$ them off enough to do something about it.

[Demaestro]

The link I provided doesn't seem to work unless Google is the referrer


But you can search this and then access the article
medscape.com/viewarticle/462504

[aleksl]

Demaestro, thanks

Demaestro:
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.

Are some of you being serious cause I can't tell?

You can't tell because people don't see through this.

Some of the biggest pharma is owned by the same oligarchs who control US government. Rockefellers (who's been controlling government via CFR since god knows, 100? easily over 50 years) own a bucnh of big pharmas, they've been creating fake "flue epidemics" god knows, since 1918? Bush was director at Eli Lilly.

Demaestro: It isn't illegal drugs, it is reasonably priced prescription drugs.

And better yet:
a) the market of natural remedies in US is completely destroyed, except for things like the most profitable substance on earth vitamin C (10000% profit, can't have enough 0-oes here), which, naturally, every drug deal...err..."doctor" recommends ;)
b) the market of drugs doesn't look at how to cure diseases. they look at how to get you ON DRUGS, permanently, that's the most profitable niches.

So, naturally, you are guilty of trying to step into this mother of milking cows.

[JohnRoy]

PAGEONERESULTS:

So, you have to wonder just how much money they made during all of this. For Google, it's the cost of doing business. They probably made a billion or two during that run.

JOHNROY:

It's clear that Google made more than 500 million in this adventure.

HTTPWEBWITCH:

It isn't clear that Google earned $500M of advertiser revenue from Canadian pharmacies. It's stated that the settlement covered the ad revenue, but also the revenue earned by those pharmacies by selling drugs illegally to Americans.

[Maurice]

@Demaestro yeh right I have a chronic condition managed by meds and I saw some very snake oil adverts advertised against the brand name for my medications - tanking these nostrums instead of the real deal would end up killing some people.

And also do you think that you should just be able to buy say Prednisalone (a steroid) over the counter with no prescription OK its righteous #*$! but has some interesting side effects (pysocative and boosts you agression levels throiugh the roof) and I saw a tragic story where a child had an allergic reaction to preds and died she was only a 50% higher dose than the one I was on.

[Demaestro]

@Maurice,

Sigh......
I clearly state in BOTH posts that I am not talking about NO PRESCRIPTION, so you really must be trying hard to ignore what I am saying.

I am not talking about buying crap meds, I am not talking about getting meds with no prescription, I am talking about legit pharmacies selling to Amercians with prescriptions at a fraction of the cost... why is this a confusion point for you?

Do you think it is fair that a person has to give up eating to afford insulin, because the prices are too high? Don't you think if there were someone offering the EXACT SAME THING for cheaper the guy skipping meals for meds would like to know about it?

That is my point. Read slower and don't react before you understand what is being said.

[Maurice]

@Demaestro for some small value of legit eh. What Google was facilitating is as I understand illegal in the USA

If you dont like it lobby your politicians to vote for a NHS or a German Style system - which the USA was moving towards in the late 40's and 50's it was the red scare plus big industrial Unions going for company provided health benefits that helped pull that plug.

 And how do you know where or what you're buying? counterfeit drugs are a major problem are you getting the real deal or a placebo or somthing that will harm you.

From reading a write-up of the case Google refused to work with the AMA approved system for validating the prescriptions and even after being warned repeatedly - that's why the fine is big.

[Demaestro]

What Google was facilitating is as I understand illegal in the USA

If you are talking about the ads then yes, the advertisements were illegal.

If you dont like it lobby your politicians

I am sure that wouldn't do anything seeing as I live in Canada

And how do you know where or what you're buying

Research

counterfeit drugs are a major problem are you getting the real deal or a placebo or somthing that will harm you.

I agree which is why you have to use legit pharmacies who only accept legit prescriptions... which from what I have read was the case with the majority of the pharmacies in question

From reading a write-up of the case Google refused to work with the AMA approved system for validating the prescriptions and even after being warned repeatedly

I have no issue with the fine. I think you could benefit from a reading comprehension course.

I will try to simplify this for you. Read slowly and then re-read slowly so you don't misunderstand what I am saying.


1) I find it sad that the USA government will not do anything to bring down the costs of drugs in the USA.

2) I find it even more sad that the USA government will go after those adverting legitimate prescriptions at a fraction of the cost when people can't afford their required prescriptions, when you consider that they won't do anything to help control the costs.

3) I feel this is made even worse when the USA government is discussing removing the few services that it's citizens can use to subsidize the highest prescription prices in the world. (medicaid and medicare)

Try not to turn those 3 points into, "You want people taking illegal drugs?" or "you want people taking prescription drugs without a prescription?"

I don't want those things, I want people to be able to afford their required medicine and have it not negatively impact their lives financially, even if that means buying drugs from ... gasp... Canada