According to a recent press release from the Department of Justice, the government has reached record highs in the recovery of fines settled under the False Claims Act. In 2011, over $3 billion were collected, bringing the total since January 2009 to $8.7 billion. This year’s total included $2.4 billion in recoveries involving fraud committed against federal health care programs.

Most of that money came out of the pockets of pharmaceutical companies. According to the release, the government recovered close to $2.2 billion in civil claims against pharmaceutical companies, including $1.76 billion in federal recoveries and $421 million in state Medicaid recoveries. Of that sum, $900 million was divided among only 8 companies, to settle allegations of unlawful pricing. GlaxoSmithKline paid out the largest single fine of $750 million, to resolve criminal and civil allegations that the company knowingly submitted, or caused to be submitted, false claims to government health care programs for adulterated drugs and for drugs that failed to conform with the strength, purity or quality specified by the Food and Drug Administration.

According to a 2010 report from Public Citizen, the pharmaceutical industry has the dubious distinction of being the largest defrauder of the US government, if measured by the number of settlements under the False Claims Act. The study found that pharmaceutical cases accounted for at least 25% of all federal FCA payouts over the past decade, with defense coming in second, at 11%. Moreover, the report found that more than half of the industry’s fines were paid by just four companies — GlaxoSmithKline, Pfizer, Eli Lilly and Schering-Plough. These four companies accounted for more than half of all financial penalties over the past two decades, paying $10.5 billion in fines collectively.

Has the stepped up pace of enforcement and the increasingly large fines made Pharma better citizens? Time will tell. There’s a considerable lag between when the crime was committed, and when the crime is prosecuted. Sales practices have been reformed in recent years, and Merck’s recent settlement, for example, also included a corporate integrity agreement with HHS. While I’m all for paying down the deficit, the industry should be striving to put those settlement dollars to better use.