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Why Big Pharma Keeps Doing It

It is no secret that the large pharmaceutical corporations have been caught with their pants down on numerous occasions over the past several years – and the situation just keeps getting worse. Recently, Boston University law professor Kevin Outterson prepared a compilation of data on “major violations” by major drug companies. His report included Glaxo-Smith-Kline (GSK), manufacturer of the diabetic drug Avandia – shown to significantly increase the chances of cardiac arrest. 

GSK suppressed clinical research and threatened those whose research revealed the danger – then continued  to market and promote Avandia aggressively.

GSK is one of eight major, global pharmaceutical and medical device manufacturers that have had to pay out $11 billion in fines and penalties for “unethical and illegal practices,” including kickbacks to doctors, private hospitals and insurance companies to encourage use of their products as well as making false and misleading claims about their products. (Despite the fact that under U.S. law, these corporations are now “people,”  nobody has gone to prison over these violations.)  GSK alone has had to enter pleas of “guilty” to three criminal charges. One of these consisted of “misbranding” products by marketing them for treatments not approved by the FDA (known as “off-label” promotions). Another violation was failure to report safety data on Avandia.

Total cost to GSK to settle all criminal and civil cases: $3 billion. In addition, GSK – along with seven other top pharmaceutical companies – are now required to operate under Corporate Integrity Agreements, in which company operations must be monitored by an independent third party who reports to the federal government.

Yet, Outerson says that such fines and penalites are unlikely to change corporate behavior. The reason? These fines and penalties are chump change to these corporations. For example, in 2011 alone, GSK reported total revenues in excess of $44 billion US dollars. Outterson says, “Companies might well view such fines as merely a cost of doing business,” adding that it represents “...a quite small percentage of their global revenue and often a manageable percentage of the revenue received from the particular product under scrutiny.”

Former U.S. attorney Robert M. Thomas, founder of a Boston law firm specializing in whistleblower protection, believes a major part of the solution lies in finally holding corporate executives – who actually make these illegal and unethical decisions – to account.  Mr. Thomas has been quoted on many health care advocacy websites as stating: “GSK is a recidivist. How can a company commit a $1 billion crime and no individual is held responsible?”

This is a question that lawmakers need to be asking.  The main problem is that a company cannot be put to death (except by revoking its corporate charter), nor can it be jailed. Despite the fact that a series of ill-founded court decisions starting with Santa Clara County v. Southern Pacific Railroad  in 1886 and culminating in the travesty of  Citizens United v. FEC has given corporations more rights and protections than natural human beings, these same corporations are free from accountability and the responsibilities required of natural, human citizens.

The  Corporate Integrity Agreement under which GSK operates addresses only part of the problem. For example, when it comes to Avandia, GSK must “commit itself to “research and publication practices” designed to make more clinical trial information available to clinicians and regulators.” However, there are a couple of loopholes: according to Outterson, “...GSK will 'generally' seek publication for research results, and summaries of clinical trial data will be posted on a clinical study register 'with rare exception'”  (italics mine).

What “rare exceptions” is GSK referring to? And what happens when the Corporate Integrity Agreement expires in 2017?

Finally, Mr. Outterson points out that such fraud cases usually rest on “internal documents” provided by whistleblowers. Heroic efforts by legal professionals such as Robert Thomas notwithstanding, we have seen the treatment of such courageous individuals in recent years. Such was the case of Helen Ge, who was marginalized and eventually fired from her position at Takeda Pharmaceuticals when she attempted to issue reports on the connection between Actos and bladder cancer.

While strengthening whistleblower protections under the False Claims Act could make it easier to hold these corporations accountable, the sad fact is that the entire situation is simply a symptom of the  deeper, debilitating disease that is profit-driven medicine and health care. What is required is a major shift in the mindset of those who own and operate the means of production of drugs and medical device, to one that is not focused on maximizing profits at the expense of society and human life.

Unfortunately, without making examples of the natural human executives who are actually in control of these decisions by putting them in prison, such a shift in mindset is unlikely to occur.

Sources

Laurance, Jeremy. “Drug Giants Fined $11 Bn for Criminal Wrongdoing.” The Independent, 20 September 2011.

Outterson, Kevin, J.D. “Punishing Health Care Fraud – Is the GSK Settlement Sufficient?” New England Journal of Medicine,  20 September 2012.

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