Doctors' Dubious Excuses for Taking Pharmaceutical Companies' Money

Pro Publica has updated their database of payments by pharmaceutical payments to physicians and organizations.  It now has data from 15 companies totaling more than $2 billion from 2009 to 2012.

To accompany Pro Publica's report, a number of news outlets wrote about payments given to local or regional doctors.  These included, in semi-random order, the Los Angeles Daily News (via the Inland Valley Daily Bulletin), the Salt Lake (City, Utah) Tribune, the San Jose (California) Mercury News, NewsChannel5 in Nashville, Tennessee, the Pasadena (California) Star-News, the Bergen and Passaic, New Jersey Record Herald via NorthJersey, the Philadelphia Inquirer, and the Columbus (Ohio) Dispatch.

The combined reports showed that many physicians, including prominent academics and community practitioners, are still getting a lot of money from pharmaceutical firms.  Since Pro Publica was only able to get data from some US drug companies, albeit those who accounted for 47 percent of US drug sales, it is likely that many more doctors than those in the data base got such payments, and the doctors in the data base may have gotten more money from companies that do not report their payments.  In addition, it is likely that many more doctors get similar payments from medical device companies, health care information technology companies, and other for-profit corporations that promote health care products and services.  

We had discussed Pro Publica's initial reporting from its database here.  While there is evidence that most payments to doctors by pharmaceutical companies are intended to promote marketing, we discussed here how some doctors rationalized their payments as fully professional and proper.

Now the updated reporting has provided many examples of - not to put too fine a point on it - physicians making dubious excuses for their acceptance of payments, often large, from pharmaceutical companies. Their themes included

It's Education, What Could Possibly Go Wrong?

From Pro Publica,

[Dr Rakesh] Jain, of Lake Jackson, Texas, has earned $582,049.  [Dr Vladimir] Maletic, of Greer, SC, made $527,850, according to Dollars for Docs.

So,

Jain said he loves teaching and delivers the same lectures about drugs and medical conditions regardless of whether a drug company is paying him.

'I am not a marketer, I am an educator,' Jain said.

Also

Maletic said he speaks about treatments for mood disorders, schizophrenia and sleep-wakefulness disorders because he believes that 'good quality education about pharmaceutical products may be beneficial to both physicians and their patients.'

The LA Times found someone with a similar opinion.

'Pharmaceutical companies used to take doctors to dinner, but that was banned years ago,' said Dr. Arthur Chanzel Jeng, an infection control specialist at UCLA-Olive View Medical Center in Sylmar.  'Now they must provide some educational content.'

Jeng was paid $80,500 by Pfizer last year for several speaking engagements. As an infection control specialist at Olive View, he and others in his field are concerned about drug resistant diseases and the limited number of antibiotics. Drug companies have little incentive to produce new antibiotics, he said, so if they do, physicians in his field want to know more about the drugs. That's why he agrees to speak.

'We (speakers) provide education when a new antibiotic does get released,' he said. 'There needs to be education among doctors on how to use this new antibiotic.'

In addition, the Salt Lake Tribune noted that 

[Dr Eliot] Brinton received two of the single largest payments in Utah, both in excess of $85,000, for promoting drugs by GlaxoSmithKline, ProPublica’s database shows. He describes the lectures as educational and based on science.

'I love the science and I love to teach. And doctors are glad to better understand the drugs and how to use them. I’m careful not to act as a cheerleader,' he said. 'If I’m a shill for the drug company I lose my integrity and integrity is really all I have to offer my patients and the drug companies.'

The physicians above all asserted that since their activities were "educational," they must be worthwhile.

Note that the ostensibly educational activities described above all appear to be "drug talks," that is talks sponsored by the drug companies, probably through speakers' bureaus, and given probably not as part of formal, accredited continuing medical education.  Since the publication of "Dr Drug Rep" in the New York Times in 2007, the public has learned that such talks mainly include content provided by the pharmaceutical companies, and are meant by the companies as marketing exercises.  From that case we also learned that physicians who deviate from the marketing message do not last long on speakers' bureaus.  (See posts here and here.) 

In addition, pharmaceutical companies often pay physicians deemed to be "key opinion leaders," whose opinions are promoted supposedly for their brilliance and erudition.  However, as noted here and here, the companies buying their services believe they have bought the services of sales people.    Evidence about key opinion leaders actually performing like marketers has come from documents revealed during litigation (e.g., see this recent example of a huge monetary settlement made of charges that GlaxoSmithKline, a major multinational drug company committed fraud among other things, and in the course of its unethical activities used key opinion leaders as marketers).   Also, see the Neurontin marketing plan (see post here), and the Lexapro marketing plan (see post here) for examples of how company keaders view key opinion leaders as marketers.

Given the volume of evidence about drug talks, speakers' bureaus, and the marketing purposes of key opinion leaders, the assertion that because they were in some sense educational, these doctors' corporate financed talks were worthwhile is at best a silly excuse.

More formally, it may arise from a logical fallacy.  The doctors appeared to be arguing that education is an unalloyed good.  However, obviously not all education is good education, or unbiased education. Specifically in this case, logic, and evidence from several cases in which pharmaceutical companies' intentions as documented in communications revealed in litigation (see examples here) suggest that these companies pay physicians for education that they believe serves marketing purposes.Thus the doctors seem to be using the composition fallacy, the logical fallacy that an entire class (in this case, all of education) can be judged by some of its members (examples of unbiased, accurate, good education.) 

It's Research, What Could Possibly Go Wrong? 

Similarly, the doctors who get paid to do research say it's all about the research.  The Salt Lake Tribune reported on

CRI LifeTree Research, which has received at least $3.4 million in drug company payments since 2009, according to ProPublica. 

Co-founder Lynn Webster, an anesthesiologist, is listed as having received the single largest payment in the state: $1,687,771 from Cephalon, a big maker of pain medications. Only three other doctors in the country received more from Cephalon.

Nationally, Webster is among the top 50 for single largest payments received, behind marquee hospitals, such as the Mayo Clinic, Cleveland Clinic and Duke and Harvard Universities.

A nationally recognized expert in pain management, Webster is under investigation by the U.S. Drug Enforcement Administration, which is looking into opioid overdose deaths of patients of his former pain clinic. A Senate Committee is probing his financial ties to Big Pharma.

Webster insisted,

Research payments to him cover overhead and other costs, including his salary as a lead researcher, he said. 

'Research inevitably leads to better education, better systems and better therapies — things that are indispensable for medical advancement and quality care,' he said. 

The Pasadena Star-News provided this version,

Pasadena-based plastic surgeon John Edward Gross received more than $770,000 from Allergan, the maker of Botox and some breast implants.

In 2011-12, Allergan paid Gross to conduct research, consult, serve on health care panels and business travel.

'What I'm doing for Allergan is to advance breast surgery,' said Gross, a board certified surgeon and a former chemical engineer. 'Much of the research you do is industry-supported. They have a motivation to make better and new products.'

It is pretty amazing to see the notion that all clinical research is irreproachable in print.  We and others have documented huge numbers of cases and volumes of evidence that clinical research may be manipulated, and, if necessary, suppressed to support the commercial goals of those who make products or provide services assessed by such research.  In fact, the prestigious Institute of Medicine's report on Conflict of Interest in Medical Research, Education and Practice included the recommendation (4.1) that "individuals may not conduct research with human participants if they have significant financial interest in an existing or potential product or a company that could be affected by the outcome of research."  Given the volume of this evidence, the assertion that all pharmaceutical company clinical research should be irreproachable is just plain silly.

Again, formally the physicians' arguments, if they should be dignified with that name, seem to arise from the same logical fallacy discussed above.  The underlying argument seems similar to that made above about education: "I am doing research.  All research is good, unbiased, helpful to patients.  So what I am doing is good, unbiased, helpful research."  So it appears the composition fallacy again was in play.

It's Not Really My Money

The San Jose Mercury News provided this example,

The database links Dr. Gurkirpal Singh to more than $248,000 in Pfizer payments it lists for speaking, consulting, travel and meals since 2009. He said all the money went to Institute of Clinical Outcomes Research and Education in Palo Alto, where he is the chief scientific officer. Singh said the money paid for research.

'I receive nothing -- let me be very clear on that,' said Singh, who is an adjunct clinical professor at Stanford University.

The Columbus Dispatch added,

 Dr. Henry Nasrallah, a psychiatrist at the University of Cincinnati, netted $647,341 in speaking and consulting fees from drug companies, ranking him as Ohio’s top recipient of such payments over that four-year period. Cincinnati’s College of Medicine put that money toward his $222,232 annual salary.
'The (pharmaceutical) companies have a signed agreement with the university for my activities, not with me personally,' Nasrallah wrote in an email to The Dispatch.

'This is another reason why I maintain scientific and clinical impartiality about the various drugs I teach, because I do not have a direct personal gain,' wrote Nasrallah, a former chairman of Ohio State University’s psychiatry department.

Really, the boss doesn't care whether he brings in any money?

These doctors seem to be denying that money is fungible.  In other words, they seem to be arguing that money going to the organizations that pays them is different from money going directly to them, and that their bosses do not in fact care whether their activities bring any revenues to the organization.  This just flies in the face of common sense.

Someone Needs to Pay

NewsChannel5 was able to interview the top earner on the Pro Publica list, Dr Jon W Draud, who said among other things, 

it was only fair to accept payments for his speaking engagements because it makes up for what he would otherwise make while working at his practice.

 'It's not essential, I suppose, but I consider it a reasonable, fair compensation for being gone and traveling, and spending time away from my home and family,' Draud said.

If Dr Draud was providing education, a useful service, it seems reasonable that someone should pay for it.  However, he appears to beg the question of who should pay for it?  Underlying this question is the concern that since it was pharmaceutical companies, not students, who were paying, the education was being done primarily to benefit the former, through marketing, rather than the latter.  The apparent argument, that because it is not reasonable to get paid for services, any source of payment is acceptable, is again just plain silly. 


Who Cares About Money?

NewsChannel5 also reported that Dr Draud said

 accepting so much money did not create a conflict of interest between him and his patients. He said the information he gives out was not biased towards the drug companies.

However, the Institute of Medicine report on Conflict of Interest in Medical Research, Education and Practice defined conflict of interest as "circumstances that create a risk that professional judgments or actions regarding a primary interest will be unduly influenced by a secondary interest."  Asserting that receiving over $1 million could not create even a risk that his educational presentations were biased towards the interests of those who gave him that money seems like simple denial.  

The FDA Said it Was True

Top earner Dr Draud also said according to NewsChannel5,

 It has to be vetted by the FDA as being fair, balanced and non-biased toward the pharmaceutical company....

From the Philadelphia Inquirer, re Dr Warren S Joseph, a podiatrist who received over $650,000

Joseph acknowledged the payments in an email to Philly.com.

'All of my lectures given for the Pharma industry follow strict FDA guidelines and are consistent with the corporate integrity agreements entered into between the companies and the government,' Joseph said. 'There is full disclosure of this fact at all lectures.'

 These justifications appear to be just plain wrong.  As far as I know, the US Food and Drug Administration does not pre-approve "drug talks" given by physicians for pharmaceutical companies.

By the way, the statement by Dr Joseph approaches self parody.  As we have discussed, corporate integrity agreements are usually the products of legal settlements of charges of wrongdoing.  Drug companies do not sign such agreements because of previous good behavior.  Moreover, I have never heard of such an agreement that required pre-approval of drug talks, either. 

 Trust Me, I'm an Expert

 As reported by NorthJersey,

One of the top recipients in North Jersey was Thomas Dayspring, an internist and expert in cholesterol management, who earned just under $400,000 from Merck and GlaxoSmithKline. Dayspring said he was paid for lectures at conferences for doctors arranged by the drug companies, as well as continuing medical education programs.

'I’ve logged over 2 million miles, all over the world and in all 50 states,' said Dayspring, who served as the director of the North Jersey Institute of Menopausal Lipidology in Wayne until last summer. 'Guys like me who are nationally known attract a big audience. Not every speaker can trot out a CV like mine.'

New Jersey, you gotta love it.  The most charitable characterization of this is an appeal to authority, albeit an amazingly egotistical one. 

Summary

 Two years after Pro Publica's report, pharmaceutical companies are continuing to pay substantial sums to physicians and other health professionals, nominally for education and research.  Because these arrangements are financially beneficial to the professional recipients of the money, and likely financially beneficial via their marketing effects  to the companies that provide the money , it should be no surprise that they are continuing in the absence of any regulatory restrictions.

What is saddest about the latest reporting is the silliness of the excuses made by the conflicted physicians.  Professionals with four years of education post-college, and multiple years of experience, and who are often respected as academics or practitioners ought to be able to reason and argue better than they did in the examples above.  Of course, people who make a lot of money often come to believe they really deserve it.  And conflicts of interest produce conflicted thinking.  As Joe Collier wrote in the BMJ, " people who have conflicts of interest often find giving clear advice (or opinions) particularly difficult." (Look here.)

The IOM  report  on conflicts of interest suggested full disclosure of all payments that could be considered conflicts of interest, banning clinical research by conflicted individuals, prohibiting academic physicians from giving "drug talks" whose content was provided by industry, and developing methods to fund continuing medical education independent from industry.  This report, and its recommendations have gotten scant attention, maybe because they would threaten a status quo that enriches conflicted health professionals and the companies that create these conflicts.  However, in my humble opinion, implementing all the report's recommendations would only be a beginning down the road of restoring the integrity of clinical care, teaching, and research.  

The Dangers of Big Corporate Health Care: Deceptive Marketing of Cancer Treatments

A series of articles over the last few months, culminating in an investigative report by Reuters, provided the newest example of what can go wrong when corporations provide direct care to vulnerable patients.  In this case, the vulnerable patients had cancer, and the corporation that provided them care was the Cancer Treatment Centers of America (CTCA).  I will try to go through the case chronologically.

As Rueters reported, CTCA "was founded in 1988 by Richard J. Stephenson, who has been chairman ever since."

The Founder's Checkered Past

A Misdemeanor

As Reuters noted,

A graduate of Northwestern University Law School, Stephenson started out as an investment banker. In 1966 he became a trustee of Americans Building Constitutionally, an organization that helped wealthy individuals set up not-for-profit corporations and personal trusts to avoid paying federal income and inheritance taxes.

In 1969, a California state court found the group's top official and six others guilty of grand theft or conspiring to commit grand theft. Stephenson had pleaded no contest to false advertising, a misdemeanor, and testified for the state, according to media reports at the time.

Allegations of Use of Unproven Cancer Treatments

Stephenson seemingly stayed out of trouble until 1975, but

Stephenson ventured into healthcare in 1975, when he and partners bought Zion-Benton Hospital in Zion, Illinois, renaming it American International Hospital. By the late 1980s, American International was facing financial problems and its 'reputation had been severely damaged' by local press reports about its use of unproven cancer treatments, according to a 2004 court opinion on a successful petition by a former CTCA president seeking an increased valuation for his share of the company.

CTCA: No More Unsubstantiated Claims

Apparently around the time American International Hospital starting having major troubles, Stephenson branched out,

In 1988, Stephenson founded CTCA. He was motivated, said CEO Bonner, by the difficulty he had identifying and obtaining the best therapies for his mother after she developed bladder cancer. She died in 1982.

By 1996, CTCA got into trouble too,

 

Cancer Treatment Centers of America got in trouble with regulators in 1996, when the Federal Trade Commission accused it of, among other things, presenting survival claims it couldn't support. The company entered into a consent decree with the FTC and, without admitting any of the allegations, agreed not to make unsubstantiated outcomes claims.

"Unscientific Therapies"

As far as I can tell, all was then quiet until 2012.  Late that year, a Forbes columnist wrote,

 Alongside standard, science-based cancer therapies, CTCA also offers an array of questionable, unscientific therapies, which it proudly labels as part of its 'integrative cancer treatment.'  CTCA advertises many such treatments, including:

* Acupuncture
* Acupressure
* Chiropractic
* Naturopathy
* Homeopathy
* Mind-Body medicine (including Reiki and Qi Gong)

None of the treatments in this list has any scientific support showing that they provide a benefit to cancer patients.  Some of them carry a real risk of harm, as I’ve written about previously.

He further charged,

CTCA makes multiple unsupported, unscientific claims for its alternative treatments, such as:

• 'Naturopathic medicine can help reduce these [cancer-related] symptoms, strengthen the immune system and support the healing process throughout your brain cancer treatment.'
• 'Acupuncture may help to alleviate [cancer] treatment-related side effects, such as nausea and vomiting.'
• 'When used during your leukemia treatment, our chiropractic care services can help correct bone, muscle and joint problems and restore nerve function.'

These are just a few examples. These claims, and CTCA’s marketing of the therapies involved, present a huge ethical problem.

Manipulated Survival Statistics

Then, in March 2012, the Reuters investigative reporters charged that CTCA manipulated its survival statistics to make its results look better.

CTCA reports on its website that the percentage of its patients who are alive after six months, a year, 18 months and longer regularly tops national figures. For instance, 60 percent of its non-small-cell lung cancer patients are alive at six months, CTCA says, compared to 38 percent nationally. And 64 percent of its prostate cancer patients are alive at three years, versus 38 percent nationally.

Such claims are misleading, according to nine experts in cancer and medical statistics whom Reuters asked to review CTCA's survival numbers and its statistical methodology.

The experts were unanimous that CTCA's patients are different from the patients the company compares them to, in a way that skews their survival data. It has relatively few elderly patients, even though cancer is a disease of the aged. It has almost none who are uninsured or covered by Medicaid - patients who tend to die sooner if they develop cancer and who are comparatively numerous in national statistics.

Carolyn Holmes, a former CTCA oncology information specialist in Tulsa, Oklahoma, said she and others routinely tried to turn away people who 'were the wrong demographic' because they were less likely to have an insurance policy that CTCA preferred. Holmes said she would try to 'let those people down easy.'

Equally significant, CTCA includes in its outcomes data only those patients 'who received treatment at CTCA for the duration of their illness' - patients who have the ability to travel to CTCA locations from the get-go, without seeking local treatment first. That means excluding, for example, those who have exhausted treatment options closer to home and arrive at a CTCA facility with advanced disease.

Accepting only selected patients and calculating survival outcomes from only some of them 'is a huge bias and gives an enormous advantage to CTCA,' said biostatistician Donald Berry of MD Anderson Cancer Center in Houston.

Furthermore,

CTCA also appears to exclude the vast majority of its patients when it calculates survival data. In survival results from 2004 to 2008 posted on its website, CTCA reported 61 patients with advanced prostate cancer, 97 with advanced breast cancer, 434 with advanced lung cancer, and 165 with advanced colon or rectal cancer. These are the four most common solid tumors. In the same period, CTCA treated thousands of patients at its Zion facility alone, according to filings with state regulators.

'We agree that some of our sample sizes' are small 'and have always stated this as a limitation of our study,' said Xiong, the consultant to CTCA.

'I'd have some concerns about why and wonder if some cherry-picking was going on,' said Spectrum Health's Campbell.

Moreover, while the standard reporting period for cancer survival is five years after diagnosis, CTCA on its website doesn't go that far; for the four most common tumors, it reports survival up to four years at most. And as Reuters found, the company's advantage often diminishes as the five-year mark approaches

 
The Founder's Checkered Present

By the way, also in the last few months, watchdog groups have asked for an investigation of CTCA's founder for possible deceptive actions that might have violated US election laws.  In December, 2012, the Washington Post reported

In the weeks before the election, more than $12 million in donations was funneled through two Tennessee corporations to the FreedomWorks super PAC after negotiations with [CTCA Founder Richard J] Stephenson over a preelection gift of the same size, according to three current and former employees with knowledge of the arrangement.

Then,

 Two watchdog groups last week asked the Federal Election Commission and the Justice Department to investigate the donations from the two Tennessee companies. The groups, Democracy 21 and the Campaign Legal Center, say the arrangement could violate federal laws that prohibit attempting to hide the true source of a political contribution by giving it under another name.

Summary

In summary, there are now charges in the media that Cancer Treatment Centers of America manipulated its survival data to makes its advertised results appear better, while it also advertises unproven complementary and alternative medicine treatments  as effective.  In the past the company had signed a consent decree not to make (presumably any more) unsubstantiated claims.  Meanwhile, the company's founder, who has a past history of a no contest plea to false advertising, and who had previously run a hospital system also charged with making unsupported survival claims, has been accused of hiding political donations.

Thus this organization, run by someone who has his own history of deception, has been found to make exaggerated and/or unsubstantiated advertising claims of several types and at different times.  These claims could attract vulnerable patients who perhaps could get better care elsewhere, possibly leading to excess morbidity and even early mortality. 

So Cancer Treatment Centers of America seems to be the latest reason to worry about the laissez faire US system which allows lightly regulated for-profit corporations to provide direct "care" to our most vulnerable patients.   We have recently discussed how a for-profit hospital chain may have been over treating some patients and under treating others, possibly risking patients' health to increase revenues (look here);  how for-profit hospice corporations by enrolling patients who do not actually have terminal illness for palliative care only  could be denying potentially curative treatment to curable patients (look here); and how for-profit mental health clinics and drug treatment centers could be providing shoddy, and potentially dangerous care to boost revenues (look here and here).

We will see if the newest part of the pattern of news reports about CTCA and its founder, coupled with reports about other for-profit health care corporations that provide direct care to vulnerable patients provoke any official action.  However, the pattern is substantial enough so that it should make all health care professionals and all patients  reconsider whether ever to trust a for-profit hospital system, hospital, clinic or other site providing direct health care to patients.

On a policy level, as I have said before,....   In my humble opinion, before the health care bubble bursts, we need to challenge the notion that direct health care should ever be provided, or that medicine ought to be practiced by for-profit corporations. Before market fundamentalism became so prominent, many states prohibited the corporate practice of medicine, and the American Medical Association forbade the commercialization of medicine.

 It is time to heed that wisdom. I submit that we will not be able to have good quality, accessible health care at an affordable price until we restore physicians as independent, ethical health care professionals, and until we restore small, independent, community responsible, non-profit hospitals as the locus for inpatient care.

Oh, the Prices we Pay ... for Questionable Drug Marketing to Enrich Corporate Insiders - the Case of Questcor's H P Acthar Revisited

In 2007, we first discussed the case of the amazing pricing of H P Acthar, a very old drug of questionable usefulness, as an example of the irrationality of health care prices in the US, and of the failure of the organizations that ought to resist outrageous pricing in our mixed, pseudo-market based health care system to do so.  A recent New York Times article has updated this case.

Background

As we wrote in 2007, ACTH (adrenocorticotrophic hormone) is a naturally occurring hormone that stimulates the activity of the adrenal gland, which produces cortisol and other glucocorticoid and mineralocorticoid hormones.   ACTH produced from pigs' adrenals was first marketed as a biologic agent in the 1940s.  It was used for some conditions that appear to benefit from the effects of increasing cortisol production induced by ACTH.

It has been traditionally used to treat infantile spasms, a rare but distressing condition, and exacerbations of multiple sclerosis (MS).  However, since the drug was introduced so long ago, it was never subject to rigorous controlled trials to assess its efficacy and adverse effects for these indications.  Furthermore, since the 1940s, synthetic glucocorticoid hormones have become widely available as generic drugs.  Yet these slightly newer drugs have never been rigorously compared to ACTH for infantile spasms or MS.  The most recent review (edited in 2009) by the Cochrane Collaboration found that steroids and ACTH have some evidence in their favor for the treatment of acute MS, but found no evidence showing that ACTH was superior.  [Filippini G, Brusaferri F, Sibley WA, Citterio A, Ciucci G, Midgard R, Candelise L. Corticosteroids or ACTH for acute exacerbations in multiple sclerosis. Cochrane Database of Systematic Reviews 2000, Issue 4. Art. No.: CD001331. DOI: 10.1002/14651858.CD001331].  Also, the most recent review (edited in 2009) of treatment of infantile spasms concluded, "it is not clear which treatment [including ACTH] is optimal." [Hancock ED, Osborne JP, Edwards SW. Treatment of infantile spasms.  Cochrane Database of Systematic Reviews 2008, Issue 4. Art. No. : CD001770. DOI: 10.1002/14541858.CD001700.pub2.]

The Pricing of H P Acthar

Possibly because some physicians thought ACTH might be useful for some patients with two conditions, infantile spasms and acute exacerbations of MS, ACTH has remained on the market.  It was manufactured by a single company, Aventis, (now part of Sanofi-Aventis), the successor to Rhone-Poulenc-Rorer.  In 2001, Aventis sold the rights to manufacture ACTH, with the trade name H P Acthar, to a new, small biotechnology company, Questcor.  In 2007, Questcor raised the price of ACTH from $1650 per vial to more $23,000 per vial.  That got the attention of the Philadelphia Inquirer, on whose article we based our commentary. We used the price increase as an example of how pricing in health care has become untethered from any sort of clinical reality, and wondered why insurance companies and the US government seemed willing to pay this outrageous price for an old drug with little evidence from clinical research to support its use.  But the issue then seemed, like many others we have discussed , to become anechoic, until the very end of 2012.


Now the  New York Times story has provided an example of how health care corporations can do very well without doing anyone, except corporate insiders, much good.  It included instances of many of the kinds of ethically questionable practices we have discussed over the years on Health Care Renewal.

Deceptive Marketing

Per the NY Times,

Questcor did almost no research or development to bring Acthar to market, merely buying the rights to the drug from its previous owner for $100,000 in 2001. And while the manufacturing of Acthar is complex, it accounts for only about 1 cent of every dollar that Questcor charges for the drug.

Moreover, the tiny 'orphan' market soon became much bigger. Before long, Questcor began marketing the drug fo multiple sclerosis, nephrotic syndrome and rheumatologic conditions, even though there is little evidence that Acthar is more effective for those other conditions than alternatives that are far cheaper. And the company did so without being required to prove that the drug actually works. That is because Acthar was approved for use in 1952, before the Food and Drug Administration required clinical trials to show a drug is effective for a particular disease. Acthar is essentially grandfathered in. 

Today, only about 10 percent of the drug’s sales are for infantile spasms. The new uses, Mr. Bailey has told analysts, represent multibillion-dollar opportunities for Acthar and Questcor, its sole maker. 

The results have been beyond even the company’s wildest dreams. Sales of Acthar, which accounts for essentially all of Questcor’s sales, totaled nearly $350 million in the first nine months this year, up 145 percent from the period a year earlier. In the same period, Questcor’s earnings per share nearly tripled, to $2.12. In the five years after the big Acthar price increase in August 2007, Questcor shares rose from around 60 cents to about $50, in one of the best performances of any stock in any industry. 

So Questcor leadership was clever enough to use loopholes in the law to promote ACTH for particular kinds of patients without any good evidence that it did those patients any good.  Furthermore, Questcor used several questionable tactics 

in this promotion.

Manipulated Research

Apparently Questcor leaders decided they needed some sort of minimal research results to promote their products, so as the Times reported,

Because Acthar was approved for these conditions decades ago, Questcor has not had to do large clinical trials to show that the drug works. It has paid for some small studies, mainly by individual doctors, who then publish a paper that the sales force can present to doctors. 

The study that justified calling on rheumatologists involved five patients with rare conditions, all of them treated by a single doctor. All the patients had much improvement on Acthar after failing to benefit from more standard therapies, the doctor, Todd Levine, said in a Questcor conference call.

Too call the research Questcor sponsored minimalist would be too polite.  A case series of five patients, lacking any control group proves almost nothing.  It proves less when the research is done in an unblinded  fashion by a single doctor who presumably was invested in the outcome being favorable for his sponsor's product.  (I suppose some might quibble with calling this research manipulated, but I contend but doing such crude research when it would be possible to do something much more credible amounts to manipulation.)

Suppression of Research

Moreover, it seems that even such rudimentary studies sometimes failed to produce the wanted results.  In these cases, the Times reported that Questcor simply suppressed them.

Still, it appears that at least a couple of small studies that may have raised questions about the drug have been suspended. 

'From my standpoint it just didn’t work,' said Dr. Sungchun Lee, a Phoenix nephrologist who stopped a small study testing Acthar as a treatment for nephrotic syndrome. 'I think they were O.K. with me stopping because we weren’t getting the results,' he said. 

Another study that was terminated sought to determine whether multiple sclerosis patients who did not have a good response to steroids should be treated with either another round of steroids or with Acthar. The study was halted midway through 'to analyze data,' according to the summary of the trial on the federal clinical trial database. 

Use of Paid Key Opinion Leaders

Despite the lack of good clinical evidence in support ACTH, there are some physicians who defend its use.  One example in the Times article was a physician who is paid by Questcor

But some doctors say Acthar can be effective in cases that are not well treated by steroids. They say that there is emerging evidence that Acthar does more than just stimulate the body to produce its own steroids. 

'It really looks like the ACTH does bring something different to the table that standard steroids don’t,' said Dr Ben W Thrower, director of the multiple sclerosis institute at the Shepherd Center, a hospital in Atlanta. Dr. Thrower, who is a paid speaker for Questcor, said his institute had tried Acthar for about 60 of its 3,000 patients, ones who did not respond to steroid treatment. Acthar made the symptoms subside in about half of them.

Where to begin?  Just because ACTH is different does not mean it is better.  Since MS is a disease whose symptoms wax and wane, patients who fail standard treatment may get better on their own, and without a control group, it is impossible to say whether the ACTH given to such patients was the reason they got better. 

Creation of Institutional Conflicts of Interest for Disease Specific Foundations

Questcor's ACTH also has support from a disease specific foundation, but one that Questcor has also supported financially.

Dr Lawrence Brown, a neurologist at the Children's Hospital of Philadelphia, and the president of the Child Neurology Foundation, says of Questcor: 'They have gone out of their way to help every kid who needs the medicine to get it quickly and efficiently.'

This year, the foundation awarded its first corporate citizenship award to Questcor. Dr. Brown says Questcor’s donations — the amount has not been disclosed — to the foundation didn’t influence the award.

Who could be so naive to think that giving an organization funding might influence its actions?  After all, human response to financial incentives is the basis for most current economic thinking.

Insiders Get Rich

Admittedly, these questionable tactics did lead to an increase in "shareholder value,"  As the company's proxy statement boasted in 2011,

While we generated strong financial returns in 2011, we are most proud of our patient focus and investments in Questcor which we believe will generate sustainable value to our shareholders, employees, patients and all of the communities that we serve. We believe that our patient focus and commitment to generating sustainable value to all of our constituencies results in strong value creation for our shareholders.

However, as of today, Qustcor's share price has dropped to $26.74 from a peak of 53.42 in June, 2012, with most of the drop in December, 2012, around the time the Times article came out, according to Google Finance.  So whether share holder value will turn out to have increased in the long run is not clear. 

Meanwhile, some Questcor employees did very well.  The largess started with some drug representatives,

Questcor sales representatives who are lucky enough or skillful enough to have a big prescriber in their territory can reap bonuses of $50,000 a quarter, according to former employees of the company.

More highly placed corporate insiders did even better.

Executives are paid well, too. In 2009, Mr. Bailey, [the CEO]  hired his daughter Kirsten Fereday as director of business analytics and evaluation, a job that paid $275,000 in cash and stock last year. 

 Left out of the Times article, somewhat surprisingly, was what the top executives make.  Information from up to 2011 is publicly available, however, in proxy fillings.

In the company's 2012 proxy statement, we find the following figures for total compensation:
Don M Bailey, President and CEO - $4,546,230, up 192% of his compensation in $1,554,503 in 2009
Michael H Mulroy, Senior Vice President, Chief Financial Officer and General Counsel -  $1,749,891 (his first year)
Stephen L Cartt, Chief Operating Officer -  $2,298,308, up 168% from $855,460 in 2009
David J Medeiros, Executive Vice President and Chief Technical Officer - $1,232,556, up 78% from $692,188 in 2009
David Young Pharm D, Chief Scientific Officer - $1,948,804 up 182% from $1,066,159 in 2009

In addition, by 2011, Mr Bailey, the CEO, had acquired 1.92% of the company's total stock, 3,834,910 shares, today worth $102,545,490.

Finally, per the Times,

one group of shareholders has done pretty well for itself. Over the last two years, as the company’s share price mainly soared, Questcor insiders have sold more than $100 million of stock. 

Summary

 So, in summary, a small biotechnology company drastically increased the price of its only product, a drug which has never been subject to modern clinical trials, and whose efficacy has never been proven.  Its marketing tactics have included manipulation and suppression of research, and payments to physicians and non-profit organizations.  Although its most breathtaking price increases were made in 2007, they attracted little public attention until five years later.   Meanwhile, corporate insiders, from drug representatives to top executives and their relatives, have done very well for themselves.

In the US, there a lot of people who advocate free market based health care for its efficiency and innovation.  For example, see "Yes, Mr President, a Free Market Can Fix Health Care," published by the Cato Institute, in which its Director of Health Policy Studies proclaimed, "The great advantage of a free market is that innovation and more prudent decisionmaking means that fewer patients will fall through the cracks," and then "a free market can and would control costs, expand choice, improve health care quality, and make health coverage more secure." [italics added for emphasis]

Unfortunately, the case of Questcor's ACTH makes it seem that in the current US system, which is supposedly more market based than systems in many other countries, the efficiency and innovation is characteristic of the marketing of corporate health care, not of the health care itself.  Here is a stellar example of how clever, and not always very scrupulous marketing can be used to sell a very old drug with little demonstrated clinical value for a stratospheric price, enriching corporate insiders, perhaps enriching stockholders (although, not so much lately, and we will see how they do in 2013), at the expense of the public who pays taxes and insurance premium.  This case suggests a need for more attention to market failures and less insistence on market fundamentalism.  Of course, it also suggests the continuing need for health care professionals, policy makers, patients and the public to be extremely skeptical about heavily promoted commercial health products.

'Tis the Season for Legal Settlements: GlaxoSmithKline, Eli Lilly, Orthofix, Sanofi all Settle

Reports of legal settlements by big health care organizations tend to dribble out towards the end of the year, maybe in a rush to finalize the year's accounting, maybe because the news will not register as well at times when people are distracted by holidays.  Here is a round-up in alphabetical order of some recent settlements of interest made by drug and device companies.

GlaxoSmithKline

Earlier this year GSK made the largest settlement, in monetary terms, ever by a pharmaceutical company (see this post).  At the end of the year it made two more.  Neither got much media attention.  The first was related to the earlier $3 billion settlement.  As reported by the [Great] Lebanon [Oregon] Express:

Oregon Attorney General Ellen Rosenblum announced in a press release that pharmaceutical giant GlaxoSmithKline has agreed to pay $90 million to Oregon and 37 other states to settle claims that it unlawfully promoted its diabetes drug, Avandia.

As the co-leader of the lawsuit, Oregon will receive $3.9 million of the settlement, according to the release.

The 38 attorneys general claimed in lawsuits filed Nov. 15 that GlaxoSmithKline misrepresented the cardiovascular risks posed by Avandia. A negotiated consent judgment was filed shortly thereafter.

 Avandia was a blockbuster drug for GlaxoSmithKline. First approved by the Food and Drug Administration in 1999, annual sales peaked at more than $2.5 billion in 2006.

Furthermore,

 Oregon and the 37 other states claim GlaxoSmithKline made safety claims about Avandia not supported by the scientific evidence.

The states allege the company failed to disclose negative information about Avendia’s cardiovascular health effects.

In addition to the monetary settlement, the agreement included all sorts of pledges by GSK:

As part of the consent judgment between the parties, GlaxoSmithKline agreed to reform how it markets and promotes diabetes drugs. It agreed to several conditions:
 • To refrain from making false, misleading, or deceptive claims about any diabetes drug;
• To refrain from making comparative safety claims not supported by substantial evidence or substantial clinical experience;
• To refrain from presenting favorable information previously thought of as valid but rendered invalid by contrary and more credible recent information;
•   To refrain from misusing statistics or otherwise misrepresenting the nature, applicability, or significance of clinical trials.

The Consent Judgment also has the following terms that are effective for at least eight years:
• GlaxoSmithKline must post summaries of all company sponsored observational studies or meta-analyses conducted by the company that are designed to inform the effective, safe, and/or appropriate use of its diabetes drugs;
• The company post summaries of company-sponsored clinical trials of diabetes products within eight months of the primary completion date;
• GlaxoSmithKline must register and post all company-sponsored clinical trials as required by federal law.

Even more under the radar was a second, unrelated settlement, only briefly chronicled by Reuters (here via the Chicago Tribune):

 British drugmaker GlaxoSmithKline Plc has reached a $150 million preliminary settlement with U.S. drug wholesalers who claimed the company improperly delayed entry to the market of generic alternatives to its nasal spray Flonase, according to court documents.

The settlement was reached with, among others, AmerisourceBergen Corp, Cardinal Health Inc, and McKesson Corp, who maintained that Glaxo had abused the citizen's petition process to maintain a market monopoly and overcharge for the spray by restricting access to less expensive generic versions.

Note that while the first settlement was clearly about misleading, deceptive marketing of a relatively dangerous drug as safe, a practice that likely lead to suffering and death of some patients, the second settlement which involved an unfair business practice that likely increased the cost of care to some patients, and decreased the profits of some competitors, lead to a monetarily larger settlement.

Again, these latter two settlements seem to just ice the cake of the $3 billion settlement earlier this year.

 Eli Lilly

Eli Lilly pleaded guilty to a misdemeanor charges and settled allegations about questionable marketing practices for its anti-psychotic drug Zyprexa for over $1 billion in 2009 (see post here).  The settlement provided some instructive information about how big pharmaceutical companies employ ghost writing to sell product (see this post).  Now at the end of 2012, Eli Lilly has settled charges that it bribed government officials in countries outside of the US.  The most colorful version of this story appeared in the Wall Street Journal.  In summary,

 Eli Lilly & Co. agreed to pay $29.4 million in a settlement of U.S. government allegations that the drug maker's units made improper payments to foreign government officials to win business.

Indianapolis-based Lilly didn't admit or deny the allegations, but agreed to have an outside consultant review the company's internal controls and its measures to comply with the U.S. Foreign Corrupt Practices Act, or FCPA. 

The colorful details were:

The SEC said in a civil complaint filed in U.S. District Court for the District of Columbia that employees of Lilly's China unit falsified expense reports to provide spa treatments, jewelry and other gifts and cash payments to government-employed doctors between 2006 and 2009.

The SEC also alleged: Lilly hired a drug distributor in 2007 that paid bribes to health officials in a Brazilian state to facilitate about $1.2 million in sales of a Lilly drug to the state; Lilly's Polish unit paid $39,000 between 2000 and 2003 to a charitable foundation run by the head of a regional government health authority and dedicated to restoring a castle in Chudow, Poland; and that its Russian unit paid millions of dollars between 1994 and 2005 to offshore entities that the SEC said 'appear to have been used to funnel money to government officials' to obtain business for the Lilly unit.

The SEC said Lilly didn't curtail the activities of its Russian unit for several years, even after an internal Lilly review raised questions about its use of these offshore arrangements.

As in the previous set of settlements, no individual was charged or had to pay any penalty for authorizing, directing, or implementing any unethical actions.  Note that the alleged bribery went on in multiple different countries, suggesting a systemic problem with the operations of the company.  Note also that the allegations involved bribing doctors as well as bureaucrats.

Orthofix

We discussed three settlements made by medical device company Orthofix only a month ago.  These involved various vivid details including bribes to physicians disguised as consulting and royalty agreements, bribes of foreign government officials disguised as chocolate, and a device sales representative turned stripper.  As best as I can tell, Orthofix just made yet another settlement, maybe not quite so picaresque.  As per Bloomberg,

Orthofix International NV won court approval of a settlement of federal regulators’ claims that the maker of bone-repair products defrauded Medicare through a kickback scheme involving doctors, prosecutors said.

U.S. District Judge William G. Young in Boston yesterday accepted an Orthofix unit’s offer to plead guilty to a felony count of obstructing an audit and pay a $7.6 million criminal fine....

This settlement like some of the previous ones involved allegations of payments to doctors to induce them to use Orthofix devices.

As part of the agreement, Orthofix also will pay $32.3 million plus interest to resolve civil claims first raised in a whistle-blower’s lawsuit that the company defrauded the federal Medicare program through payments to doctors who used its bone-growth stimulators....

This series of cases is unusual because they resulted in a guilty plea to a felony (but by a subsidiary of the company, not the company itself), and in guilty pleas by some company employees (but not apparently any penalties to top management).

Five Orthofix employees have pleaded guilty in connection with the probe, the U.S. Justice Department said. Thomas Guerrieri, a company vice president, pleaded guilty to violating the federal anti-kickback statute by setting up fake consulting agreements for doctors who used the company’s products. 

Sanofi

French multinational pharmaceutical corporation Sanofi-Aventis settled charges of overcharging the US Medicaid system in 2009 for over $90 million  (see post here),  and of overcharging the US Medicare system in 2007 for over $190 million (see post here).  Now it just settled charges that it gave kickbacks to doctors to induce them to prescribe its product.  Per Bloomberg,

 Sanofi,  France’s biggest drugmaker, reached a settlement to pay $109 million over allegations that its U.S. units gave doctors free doses of a medicine to win their business and subvert Medicare’s drug reimbursement system.

Sanofi sales representatives entered into 'illegal sampling arrangements' with physicians, giving them the arthritis drug Hyalgan as kickbacks and 'promising to provide negotiated' amounts of the medication to lower its effective price in violation of the False Claims Act, the U.S. Justice Department said yesterday in a statement.

'Kickback schemes subvert the health-care marketplace and undermine the integrity of public health-care programs,” Stuart Delery,  who heads the department’s civil division, said in the statement. 'We will continue to hold accountable those who we allege are providing illegal incentives to influence the decision-making of health-care providers in federal health-care programs.'

Again, no individual suffered any negative consequences for authorizing, directing or implementing the bad behavior in this case.

Summary

So here we go again, four more settlements by large, rich, well known pharmaceutical and device companies.  Most of the companies involved now have a history of recent settlements for a variety of ethical misadventures.  Most of the new settlements involved allegations of deceiving and bribing physicians.

As we have noted endlessly before, legal settlements like this are useful to provide documentation of how unethical the practices, particularly marketing practices of large health care organizations have become.  However, the increasing number of repeat settlers suggest that the settlements are not deterring bad behavior.  Since the fines involved are usually small compared to the revenues that can be generated by deceptive and unethical marketing of expensive drugs, and the fines are paid out of company coffers, and are thus spread out in their impact over employees and stockholders alike, they usually have no more impact than a lash with a wet noodle, maybe at best a slap on the wrist.  Since the people involved in authorizing, directing and implementing the bad behavior can likely greatly improve their "numbers" and hence generate big salaries and bonuses, but face a minimal risk of any individual negative consequences, they are likely to continue unethical practices.

Given that so many of these cases involve deception and/or bribery of health care professionals, I still hope that some will get upset at the effect on their professional values to take action.

Meanwhile, I repeat until blue in the face....   we will not deter unethical behavior by health care organizations until the people who authorize, direct or implement bad behavior fear some meaningfully negative consequences. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.

Pfizer's 13th Legal Settlement - Will it be Enough to End the Impunity?

It has been almost two months since we lasted noted misbehavior by giant global pharmaceutical firm Pfizer Inc. With little fanfare, however, a few small news items noted the corporation's latest legal settlements.

Deceptive Marketing of Protonix

The first settlement merited only a few paragraphs from Reuters.  The gist was:

Pfizer Inc will pay $55 million plus interest to settle charges that Wyeth promoted its acid reflux drug Protonix for unapproved uses and made unproven claims about the medicine, the U.S. Department of Justice said on Wednesday. 

The infractions took place between February 2000 and June 2001, long before the world's largest drugmaker acquired Wyeth in 2009 for $68 billion.

A report in the examiner explained that Wyeth did not merely go beyond the label in promoting Protonix, it went beyond the evidence.

Wyeth allegedly promoted Protonix as the 'best PPI for nighttime heartburn' even though there was never any clinical evidence that Protonix was more effective than any other PPI for nighttime heartburn. 

Furthermore, the charges were that systemic efforts to mislead were sanctioned by top management:

 The allegations in the complaint are that this superiority slogan was formulated at the highest levels of the company. Wyeth retained an outside market research firm, at the cost of tens of thousands of dollars, to ensure that sales representatives delivered that misleading superiority message.

Finally, the government asserted that Wyeth corrupted physicians' continuing medical education in the process:

Finally, the government alleges that Wyeth used continuing medical education (CME) programs to promote Protonix for unapproved uses. CME programs are sponsored by accredited independent providers, such as universities, nonprofit organizations, or specialty societies. Pharmaceutical companies are permitted to provide financial support for CME programs, but they are not permitted to use CME programs as promotional vehicles for off-label indications.

According to the complaint, Wyeth spent millions of dollars providing 'unrestricted educational grants' to CME providers, and these grants invariably included promises that Wyeth would not attempt to influence the content of the program in any way. Nevertheless, the government alleges that one of Wyeth’s core marketing tactics for Protonix was to use CME programs to drive off-label use of the drug. According to the complaint, the Protonix 'brand team' influenced virtually every aspect of these CME programs: program topics, speaker selection, organization, and content. In addition, the government alleges that Wyeth even insisted that the CME program materials use the same color and appearance as Protonix promotional materials–a tactic that Wyeth and the vendor called 'branducation.'

So it seemed that the company put on quite an effort to promote what we have called elsewhere pseudo-evidence based medicine, yet, like many other legal settlements involving large health care organizations, this one involved no penalties of any type against the people within the organization who authorized, directed, or implemented the bad behavior. 

 Misleading Marketing of Zyvox, Lyrica 

Another settlement, for a few dollars less, got even less attention.  Fox Business news did report this:

 Pfizer Inc. (PFE) agreed to pay a combined $42.9 million to North Carolina and 32 other states in a settlement of allegations that the drug maker used unfair and deceptive practices in the marketing of antibiotic Zyvox and nerve-pain medicine Lyrica.

I could find no detail about the sorts of deception allegedly involved in the news media.  What little more Fox provided did suggest that this case also involved pitching drugs in instances in which their use was unsupported by good evidence:

The states had alleged that Pfizer had marketed Zyvox as superior to another antibiotic in fighting certain types of infections, though there allegedly wasn't substantial evidence to support superior results for some uses that Pfizer claimed.

The states also alleged that Pfizer marketed Lyrica for some off-label, or unapproved, uses.

There was no hint that again any individual would suffer any negative consequences for this particular set of deceits either.

Avoiding Impunity as a Topic of Polite Discussion

We have discussed a seemingly endless parade of legal settlements by large health care organizations.  In almost none was there any consequence beyond a fine paid by the company, and sometimes a pledge that the company would thereafter behave better.  While these relatively small costs were diffused throughout the organizations, almost never did the people who authorized, directed, or implemented the bad behavior pay any price or suffer any penalty.  Thus we have opined again and again (e.g., most recently here) that these settlements have become just another cost of doing business, and have no power to deter future bad behavior.

In addition, we have noted not only have multiple organizations made such settlements, some organizations have settled again and again.  Yet even in the cases of these multiple organizational offenders, the individuals involved maintain their immunity from any negative consequences.  Thus these are examples of impunity.  

Transparency International declared 23 November, 2012, as the International Day to End Impunity, explained as follows:

At Transparency International we view impunity as getting away with bending the law, beating the system or escaping punishment. Impunity is anathema to the fight against corruption.

However, impunity is one of those concepts which never seems to be a subject of polite conversation in health care, or, as we say, it has become anechoic.  

Therefore, it is fascinating that while these two Pfizer settlements were announced almost simultaneously, each was discussed, such as it was, as if it occurred in a vacuum.  Moreover, it also seems that each settlement was crafted by law enforcers without any attention to the record of the company making the settlement.  Thus, any implications about impunity were avoided.

Pfizer's Multiple Ethical Opfenses

In fact, during the time we have been posting on Health Care Renewal, Pfizer has become one of the great repeat ethical offenders in the health care arena.  Its track record since the beginning of the 21st century, (with yello colored background below, compiled from this post), is remarkable.

In the beginning of the 21st century, according to the Philadelphia Inquirer, Pfizer made three major settlements,

October 2002: Pfizer and subsidiaries Warner-Lambert and Parke-Davis agreed to pay $49 million to settle allegations that the company fraudulently avoided paying fully rebates owed to the state and federal governments under the national Medicaid Rebate program for the cholesterol-lowering drug Lipitor.

May 2004: Pfizer agreed to pay $430 million to settle DOJ claims involving the off-label promotion of the epilepsy drug Neurontin by subsidiary Warner-Lambert. The promotions included flying doctors to lavish resorts and paying them hefty speakers' fees to tout the drug. The company said the activity took place years before it bought Warner-Lambert in 2000.

April 2007: Pfizer agreed to pay $34.7 million in fines to settle Department of Justice allegations that it improperly promoted the human growth hormone product Genotropin. The drugmaker's Pharmacia & Upjohn Co. subsidiary pleaded guilty to offering a kickback to a pharmacy-benefits manager to sell more of the drug.

Thereafter, Pfizer paid a $2.3 billion settlement in 2009 of civil and criminal allegations and a Pfizer subsidiary entered a guilty plea to charges it violated federal law regarding its marketing of Bextra (see post here).  Pfizer was involved in two other major cases from then to early 2010, including one in which a jury found the company guilty of violating the RICO (racketeer-influenced corrupt organization) statute (see post here).  The company was listed as one of the pharmaceutical "big four" companies in terms of defrauding the government (see post here).  Pfizer's Pharmacia subsidiary settled allegations that it inflated drugs costs paid by New York in early 2011 (see post here).   In March, 2011, a settlement was announced in a long-running class action case which involved allegations that another Pfizer subsidiary had exposed many people to asbestos (see this story in Bloomberg).  In October, 2011, Pfizer settled allegations that it illegally marketed bladder control drug Detrol (see this post). Finally, in August, 2012, Pfizer settled allegations that its subsidiaries bribed foreign (that is, with respect to the US) government officials, including government-employed doctors (see this post). 

By my count, the two current settlements would be numbers twelve and thirteen.  Of course, while I believe this list is accurate, it may be incomplete.

Since none of these posts involved any negative consequences for any individuals who authorized, directed, or implemented the bad behavior, or who profited from it, and none involved any changed in the leadership or organization of the company, this becomes an amazing record of the impunity of Pfizer leadership over time and space. 

Will Impunity Finally Lead to Outrage?

Impunity, though, is a concept that is beginning to command some attention.

The Brasilia Declaration which was published at the conclusion of the 15th International Anti-Corruption Conference (hosted by Transparency International) included:

it is clear we all face a common challenge in our work: impunity for those who abuse positions of power. 

If impunity is not stopped, we risk the dissolution of the very fabric of society and the rule of law, our trust in our politics and our hope for social justice.

Activists, businesspeople, politicians, public officials, journalists, academics, youth and citizens who gathered in Brasilia to discuss the threat of corruption made it clear that impunity undermines integrity everywhere.

Whether we are investing collective efforts and resources in fighting poverty, human rights violations, climate change or bailing out indebted economies, we need to give the people a reason to believe that impunity will be stopped.

While the two latest Pfizer settlements barely got media coverage, maybe a $1.9 billion dollar settlement in the US by international banking giant will get more attention.  The charges in this case were not merely deceiving some doctors and patients about drug efficacy and safety.  The company was accused of aiding money laundering by drug cartels, and facilitating rogue regimes get around international sanctions.  As the New York Times reported,

State and federal authorities decided against indicting HSBC in a money-laundering case over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system.

Instead, HSBC announced on Tuesday that it had agreed to a record $1.92 billion settlement with authorities. The bank, which is based in Britain, faces accusations that it transferred billions of dollars for nations like Iran and enabled Mexican drug cartels to move money illegally through its American subsidiaries.

Unlike Pfizer's slow-motion impunity, this example got attention.  The Los Angeles Times noted,

The massive penalty still was not enough to appease some critics. No bank executives were charged as part of the investigation, leading some analysts to question the government's willingness to hold powerful Wall Street firms accountable.

'It's mind-boggling how they think you can have a financial system and allow this kind of impunity,' said William Black, a former banking regulator who aided federal prosecutors during the savings and loan crisis of the 1980s and 1990s. HSBC 'put the world at enormous risk.'

A NY Times editorial opened,

It is a dark day for the rule of law.   Federal and state authorities have not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system.  They have also not charged any top HSBC banker in the case, though it boggles the mind that a bank could launder money as HSBC did without anyone in a position of authority making culpable decisions.

Clearly, the government has bought into the notion that too big to fail is too big to jail.  When prosecutors choose not to prosecute to the full extent of the law in a case as egregious as this, the law itself is diminished.  The deterrence that comes from the threat of criminal prosecution is weakened, if not lost.

So maybe this huge financial case will prove to be the straw that breaks impunity's back.  So I will close by quoting the end of the Brasilia Declaration, in the hope that a few people will take it to heart in the context of health care, as well as in finance.

To take this important struggle forward the international anti-corruption community should promote greater people engagement and find ways to provide greater security for anti-corruption activists.

Reducing impunity also requires independent and well-resourced judiciaries that are accountable to the people they serve.

We call on leaders everywhere to embrace not only transparency in public life but a culture of transparency leading to a participatory society in which leaders are accountable.

We call on the anti-corruption movement to support and protect the activists, whistleblowers and journalists who speak out against corruption, often at great risk.

It is up to all of us in government, business and society to embrace transparency so that it ensures full participation of all people, bringing us together to send a clear message: We are watching those who act with impunity and we will not let them get away with it.