The ABCs of Corruption · Ledger B · Healthcare and Pharma

The Patient

A clearinghouse that lost the records of 192,700,000 people, an insurer accused of coding its members sicker than their charts, and three drugmakers that pleaded guilty to selling pills for uses the FDA never approved.

The patient in these five cases is a source of two things, data and diagnoses, and each was converted to revenue without the patient in the room. Pfizer, Merck and Abbott each pleaded guilty to misbranding, which in practice meant sales forces promoting a drug for a condition or a population the FDA had not cleared: a painkiller at doses the agency had refused, an arthritis claim made three years early, an anticonvulsant for agitated dementia patients in nursing homes. UnitedHealth is accused of the same move from the insurer's side, keeping diagnoses on its members' records because Medicare pays more for a sicker member. Change Healthcare, a UnitedHealth subsidiary, sat in the middle of a third of the country's patient records and lost what it held.

B1Data breach

Change Healthcare

UnitedHealth Group subsidiary

192,700,000people whose records were taken21 February 2024

Change Healthcare, a UnitedHealth Group subsidiary, handles about 15,000,000,000 healthcare transactions a year and touches one in three American patient records. Most of the people in those records had never heard its name. Intruders entered through a Citrix portal on 12 February 2024, and the ransomware group ALPHV, also called BlackCat, locked the systems on 21 February. UnitedHealth paid a ransom of $22,000,000 in bitcoin. The data taken included Social Security numbers, diagnoses, medications, test results and insurance IDs. UnitedHealth confirmed the theft publicly on 22 April 2024 and offered two years of credit monitoring. Letters to the individuals themselves began going out in late July, five months after the attack. The final count reported to the HHS Office for Civil Rights was approximately 192,700,000 people.

“They called it Change Healthcare. My identity changed without my consent.”

Since

HHS opened an investigation and has announced no penalty. The consolidated lawsuits in Minnesota federal court survived a motion to dismiss in part in December 2025, with no class certified and no settlement as of 30 September 2026. Nebraska's attorney general sued on 16 December 2024, and that case also survived a motion to dismiss.

B2Guilty plea

Merck

Vioxx

$950,000,000criminal fine and civil settlement22 November 2011

Merck withdrew Vioxx on 30 September 2004. On 22 November 2011 its subsidiary pleaded guilty to one misdemeanor count of introducing a misbranded drug into interstate commerce, for promoting Vioxx for rheumatoid arthritis for nearly three years before the FDA approved that use. A civil settlement resolved that marketing along with allegations that Merck's representatives made inaccurate, unsupported or misleading statements about the drug's cardiovascular safety. FDA scientist David Graham estimated in The Lancet that Vioxx caused 88,000 to 140,000 excess cases of serious coronary heart disease in the United States, and told the Senate Finance Committee that 30 to 40 percent of those patients probably died.

The $950,000,000

Civil settlement$628,364,000
Criminal fine$321,636,000
“They knew the risk. They just didn't put it on the label.”

Since

Merck paid $4,850,000,000 in 2007 to settle heart attack and stroke claims and $830,000,000 in 2016 to settle with its shareholders.

B3Guilty plea

Pfizer

Bextra, Geodon, Zyvox and Lyrica

$2,300,000,000criminal and civil2 September 2009

Pfizer subsidiary Pharmacia & Upjohn pleaded guilty to a felony for misbranding the painkiller Bextra, which it promoted for uses and doses the FDA had specifically declined to approve over safety concerns. The $1,195,000,000 criminal fine was, in the Justice Department's words, the largest ever imposed in the United States for any matter. A civil settlement of $1,000,000,000 covered Bextra, the antipsychotic Geodon, the antibiotic Zyvox and the epilepsy drug Lyrica, along with kickbacks paid to health care providers. The department called the total the largest health care fraud settlement in its history. Six whistleblowers shared more than $102,000,000.

The $2,300,000,000

Criminal fine and forfeiture$1,300,000,000
Civil settlement$1,000,000,000
“The world's biggest drugmaker, caught selling the world's biggest lie.”

Since

The record lasted until 2 July 2012, when GlaxoSmithKline paid $3,000,000,000.

B4Allegation, pending

UnitedHealth Group

Medicare Advantage risk adjustment

$2,100,000,000alleged by the Justice Department; denied by UnitedHealthFiled 24 March 2011

Benjamin Poehling, a former UnitedHealth finance director, filed a whistleblower suit on 24 March 2011. The Justice Department joined it on 16 May 2017. Medicare Advantage pays an insurer more for a sicker member. The department alleges that UnitedHealth sent reviewers through patient charts to find diagnoses that would raise its payments and ignored what the same reviews showed about diagnoses the charts did not support. By its figures Medicare paid UnitedHealth more than $7,200,000,000 on the strength of those reviews from 2009 through 2016 and would have paid $2,100,000,000 less without the unsupported codes. UnitedHealth denies the allegations. On 3 March 2025 a court-appointed special master recommended judgment for UnitedHealth. The department objected, a hearing was held on 19 November 2025, and Judge Fernando M. Olguin has not ruled.

“They didn't just profit off my sickness. They upcoded it.”

Since

The Wall Street Journal reported a civil Justice Department investigation of UnitedHealth's Medicare billing in February 2025 and a criminal one in May 2025. UnitedHealth confirmed on 24 July 2025 that it was answering formal criminal and civil requests. No charges have been filed.

B5Guilty plea

Abbott Laboratories

Depakote

$1,500,000,000criminal and civil7 May 2012

Depakote is approved for seizures, bipolar mania and migraines. Abbott pleaded guilty on 7 May 2012 to misbranding it. From 1998 through 2006 the company marketed the drug to control agitation and aggression in elderly dementia patients, and from 2001 through 2006 for schizophrenia, with neither use approved by the FDA. The resolution carried five years of probation, and the Justice Department called it the second largest payment by a drug company. On 17 October 2016 Omnicare, the country's largest nursing-home pharmacy, agreed to pay $28,125,000 to resolve allegations that it solicited and received kickbacks from Abbott, in the form of grants, educational funding and rebates, to promote the drug in the nursing homes it served.

The $1,500,000,000

Civil settlement$800,000,000
Criminal fine and forfeiture$700,000,000
“They didn't just treat seizures. They seized the profits.”

Since

Abbott paid a further $100,000,000 to the states under consumer protection laws.

CaseOutcomeOn the recordDate
Change HealthcareBreach, no penalty announced192,700,000 people21 February 2024
MerckMisdemeanor plea and civil settlement$950,000,00022 November 2011
PfizerFelony plea by subsidiary, civil settlement$2,300,000,0002 September 2009
UnitedHealth GroupAllegation, no ruling$2,100,000,000 allegedFiled 24 March 2011
Abbott LaboratoriesMisdemeanor plea and civil settlement$1,500,000,0007 May 2012

The three drug resolutions total $4,750,000,000. Pfizer's felony plea was entered by a subsidiary, and Merck's and Abbott's pleas were to misdemeanors. Pfizer's record stood for less than three years before GlaxoSmithKline broke it at $3,000,000,000. The UnitedHealth case is in its sixteenth year without a ruling on the merits, and a special master has recommended it end in the company's favor. The 192,700,000 people in the Change Healthcare breach were offered two years of credit monitoring for identifiers that do not expire.

‹ PreviousLedger A · The Public TrustSADHOTAll explainersNext ›Ledger C · The Tax Bill