Pfizer Inc, which boasts of being the world's largest research based pharmaceutical company, also seems to be one of the world's largest examples of health care corporations that have withstood an amazing number of settlements, fines, and at times convictions for misbehavior without major apologies, significant changes in leadership or corporate culture, or bankruptcy. (Look here for a list of the cases, and here for all we have written about Pfizer).
Pfizer, amazingly, has the malodorous distinction of having been convicted by a US jury as a RICO - a racketeering influenced corrupt organization in 2010 (look here). Pfizer executives, of course, kept their office of counsel busy by appealing the conviction, all the way up to the US Supreme Court.
As discussed on the 1BoringOldMan blog, the court has now turned down the appeal and let the conviction, which had been affirmed by lower federal court, stand. So Pfizer is now officially a racketeering influenced corrupt organization.
Yet although the description of the RICO statute that 1BoringOldMan quoted notes the law can be used to go after the leaders of organized crime, no individual at Pfizer who authorized, directed, or implemented the relevant misbehavior, which was in this case the promotion of Neurontin for off-label uses, for which its benefits were at best unproven, at worse nonexistent, even if its harms are well-documented. Thus even this RICO conviction has not affected the impunity of top health care corporate leaders.
As we have said endlessly, true health care reform will not occur until the leaders of large health care organizations are made accountable for their actions, and are prevented from becoming amazingly rich while their organizations repeatedly commit unethical or illegal acts that harm patients' and the public's health.
ADDENDUM (14 December,2013) - The followup post at 1BoringOldMan on this topic includes some optimism that now that the validity of the RICO concept applied to a large health care corporation has been affirmed, more stringent law enforcement may follow.
Roy M. Poses MD for Health Care Renewal
Showing posts with label Pfizer. Show all posts
Showing posts with label Pfizer. Show all posts
Pfizer's Umpteenth Settlement (for $491 Million Plus a Guilty Plea), but No Person Held Responsible
Wednesday, July 31, 2013
The world's largest research based pharmaceutical company was in court again, as reported by the New York Times,
In particular,
The drug maker Pfizer agreed to pay $491 million to settle criminal and civil charges over the illegal marketing of the kidney-transplant drug Rapamune, the Justice Department announced on Tuesday.
In particular,
The recent case centers on the practices of Wyeth Pharmaceuticals, which Pfizer acquired in 2009.Rapamune, which prevents the body’s immune system from rejecting a transplanted organ, was approved by the Food and Drug Administration in 1999 for use in patients receiving a kidney transplant. However, federal officials said Wyeth aggressively promoted the drug for use in patients receiving other organ transplants, even offering financial incentives to its sales force to do so.Accusations of Wyeth’s practices became public in 2010 after a whistle-blower lawsuit filed by two former employees was unsealed.After lawmakers announced a Congressional inquiry, the Justice Department opted to join the lawsuit. The settlement announced Tuesday, which also resolves a second, similar whistle-blower suit, includes a criminal fine and forfeiture of $233.5 million, and a civil settlement of $257.4 million with the federal government, all 50 states and the District of Columbia.
The case did not get much media coverage. So far, the only other somewhat detailed article on it was put out by Bloomberg. In fact, the lawyer for two of the whistle-blowers who alerted federal authorities to what Wyeth was doing had to say
the spate of pharmaceutical settlements in recent years had blunted reaction to what he said were shameful practices. 'Everybody’s been asking me why this case is different than any other,' he said. 'We used to trust these companies. You can’t trust these companies anymore.'
However, we should not be too blase. This case was not only about money. The over-promotion of a potentially dangerous drug likely lead to patients being harmed in the absence of any benefits. Rapamune suppresses the immune system and increases risks of serious infections and malignancy. Specific serious adverse events have been reported when it is used in transplants of organs other than the kidney (e.g., lung and liver transplants). (See full prescribing information here.) Bloomberg reported that 90% of Wyeth's revenues from Rapamune came from off-label uses, suggesting that quite a few people may have been adversely affected by its excess use.
As in most other members of the march of legal settlements by big health care organizations, this case involved no negative consequences for anybody who authorized, directed, or implemented the improper marketing practices. While such people must have existed, they were not even named in the press coverage. At least this settlement involved a guilty plea to a crime, albeit a misdemeanor (misbranding as reported by Bloomberg), so the company did have to admit some wrongdoing.
A Pfizer manager, however, tried to disavow responsibility, as noted by Bloomberg,
'Pfizer was not a subject or target of this matter, and cooperated fully with the government from the time it learned of this investigation in October 2009,' Chris Loder, a Pfizer spokesman,...
But Pfizer had purchased Wyeth, and in doing so got not only assets and profits, but responsibility for actions.
Also, neither the settlement nor the criminal plea seemed to take into account Pfizer's amazingly sorry recent track record. I am losing count of all of Pfizer's settlements and/or guilty plea or convictions since 2000. (The updated list of previous legal results is in the Appendix.)
People found guilty of small-time Medicaid or Medicare fraud often forfeit all their assets and go to jail. Yet actions by large pharmaceutical companies that may harm patients and cost many millions of dollars almost never result in any individual facing any negative consequences, or even being named and shamed. Meanwhile, the managers of these companies may make gargantuan amounts of money partially rationalized by the revenues produced by such recurrent misbehavior. In 2012, according to the company's 2013 proxy filing, Pfizer CEO Ian Reed's total compensation was $25,634,136, and the four next most highly paid executives all made more than $5,000,000.
So the Kabuki play that is regulation of and law enforcement for large health care organizations goes on. As our society is being increasingly divided into a huge majority in increasingly difficult economic circumstances and a small and increasingly rich minority, it also seems to be increasingly divided into little people who may be ruined by lawsuits, and imprisoned for even minor infractions, and big people who have impunity.
True health care reform would need to start by making leaders of big health care organizations accountable for their organizations' misbehavior.
APPENDIX - Pfizer's Settlements
In the beginning of the 21st century, according to the Philadelphia Inquirer, Pfizer made three major settlements,
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).
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).
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).
In December, 2012, Pfizer settled federal charges that its Wyeth subsidiary deceptively marketed the proton pump inhibitor drug Protonix, using systematic efforts to deceive approved by top management, and settled charges by multiple states' Attorneys' General that it deceptively marketed Zyvox and Lyrica (see this post).
In January, 2013, Pfizer settled Texas charges that it had misreported information to and over-billed Medicaid (see this post).
Labels:
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Pfizer May No Longer be Able to Delay Paying Its Asbestos Claims of Nearly $1 Billion
Friday, June 28, 2013
Pfizer, which claims to be the "world's largest research-based pharmaceutical company," is one step closer to paying a nearly one billion dollar settlement of legal claims of harms due to the asbestos products it used to manufacture.
Pfizer Settles - More or Less - Some of its Asbestos Liability
Most people would not think of Pfizer as a producer of asbestos. However, the back-story, as reported in the Philadelphia Inquirer, and as we discussed here in 2011, is that
So,
By apparently holding out the legal fiction that Quigley was an independent entity, Pfizer seemed to use to use the bankruptcy filing to delay making any payment of these claims, most of which likely involved illnesses due to asbestos exposure. As the Inquirer article said,
notwithstanding the fact that Pfizer itself is hardly bankrupt.
But now, as Bloomberg reported (via the New London [CT] Day),
Note that Pfizer has consistently argued that it should bear no responsibility for the effects of the asbestos made by its subsidiary:
Convenient Fictions
This case received little notice in 2011 and is receiving little notice now, and mainly for its business implications. Yet the reporting does suggest dots to connect to reveal some larger hypocrisies.
Dedicated to improving health and well being?
Pfizer asserts on its website that it
Yet despite this supposed dedication to health and well-being, it has long delayed any possible compensation to people who may have acquired severe, if not fatal disease from contact with one of its products.
As per Bloomberg, note the examples of
Ownership without responsibility
According to current media reports, Pfizer attorneys repeatedly contended that because Quigley was a subsidiary of Pfizer, Pfizer could not be held accountable for its actions. Yet Pfizer owned, and presumably thus gained all revenue from and chose the leadership of Quigley. At best, maintaining this fiction seems heartless given Pfizer's stated interest in peoples' "health and well being."
Who knew asbestos was dangerous?
The current reports seem to imply that Pfizer's accountability should be mitigated because at the time it acquired Quigley, no one knew that asbestos was hazardous. The Bloomberg report stated,
But,
The last sentence implies that asbestos was only shown to cause cancer after Pfizer acquired Quigley in 1968. However, this suggests a lack of knowledge of medical history.
In fact, evidence that asbestos was dangerous would have been readily available in 1968. Pulmonary asbestosis was recognized in 1927.(1, noted in 2). Furthermore, by 1952, as per Dr Richard Doll(3),
Doll reported further data in 1954 and concluded,
Summary
So while Pfizer officials ought to have known that in 1968 it was acquiring a company that made products that likely caused lung cancer, for more than 40 years, they have managed to stall payments to now mainly the heirs of people who acquired severe disease due to those products. This clearly suggests that in this matter the company leadership has consistently put its revenue ahead of its ostensible dedication to peoples' health and well being. Then again, this is hardly the first example of dubious ethical conduct by Pfizer. See this post for a list of the 14 legal settlements of allegations of misconduct made by Pfizer since 2000, only one of which was related to the current case.
Furthermore, dedication to short-term revenue over everything else has resulted in huge wealth for Pfizer's hired managers. Per the Wall Street Journal, only the latest example is,
Presumably, the total revenue target would have been a bit lower if Pfizer had managed to set aside assets to pay the asbestos related claims discussed above in 2012 rather than in 2013.
This relatively anechoic example shows how hollow ring most of the claims by leaders of big health care organizations that they value patients' and the public's health. That may be convenient public relations puffery, but again and again the bottom line seems to matter more to them. We have shown numerous examples of mission-hostile management, and of leaders compensated outrageously out of proportion to their contributions to patients' and the public's health. Thus, why should health care professionals, or patients believe that anything they do puts patients ahead of money?
As we have said so often, health care professionals and society at large needs to hold large health care organizations' leadership accountable for their missions, and push out leaders who put their own pocketbooks and their organizations' revenue ahead of patients' and the public's health.
References
1. Cooke WE. Pulmonary asbestosis. Br Med J 1972; 2: 1024.
2. Hasan FM, Nash G, Kazemi H. Asbestos exposure and related neoplasia: the 28 year experience of a major urban hospital. Am J Med 1978, 65: 649-654. Link here.
3. Doll R. Mortality from lung cancer in asbestos workers. Br J Indust Med 1955; 12: 81-86. Link here.
Pfizer Settles - More or Less - Some of its Asbestos Liability
Most people would not think of Pfizer as a producer of asbestos. However, the back-story, as reported in the Philadelphia Inquirer, and as we discussed here in 2011, is that
Pfizer used to have a minerals, pigments and metals division and, in 1968, it bought Quigley Company Inc., which made insulation for heavy industry.
Quigley's Insulag contained asbestos.
So,
Quigley stopped production at its facility in Old Bridge, N.J., in 1992. When it filed for bankruptcy in 2004, Quigley faced more than 160,000 lawsuits, most related to asbestos product liability.
By apparently holding out the legal fiction that Quigley was an independent entity, Pfizer seemed to use to use the bankruptcy filing to delay making any payment of these claims, most of which likely involved illnesses due to asbestos exposure. As the Inquirer article said,
Pfizer has spent the nine years since arguing that bankruptcy law protects it from such lawsuits.
notwithstanding the fact that Pfizer itself is hardly bankrupt.
But now, as Bloomberg reported (via the New London [CT] Day),
Pfizer Inc.'s non-operating Quigley Co. won permission to end almost nine years in bankruptcy under a plan that resolves most asbestos claims against the former insulation maker and its parent, the world's largest drugmaker.
U.S. Bankruptcy Judge Stuart Bernstein in Manhattan Wednesday approved a Chapter 11 plan under which Pfizer will contribute assets worth $964 million. He rejected a prior plan almost three years ago, saying Pfizer was improperly using Quigley's bankruptcy to shield itself from asbestos claims.
Note that Pfizer has consistently argued that it should bear no responsibility for the effects of the asbestos made by its subsidiary:
'Pfizer has never been found derivatively or directly liable for injuries allegedly caused by Quigley's asbestos- containing products,' [Pfizer spokesman Christopher] Loder said.
Pfizer used to have a minerals, pigments and metals division and, in 1968, it bought Quigley Company Inc., which made insulation for heavy industry. Quigley's Insulag contained asbestos.
Read more at http://www.philly.com/philly/business/20130627_Drug-maker_Pfizer_fails_to_escape_costly_asbestos_case.html#AltGBB8oXa8YPkAC.99
Furthermore,Read more at http://www.philly.com/philly/business/20130627_Drug-maker_Pfizer_fails_to_escape_costly_asbestos_case.html#AltGBB8oXa8YPkAC.99
Pfizer has said throughout the case that it never made or sold Quigley's products and it doesn't have liability for them. Asbestos, once widely used as an insulator, was later shown to cause cancer.
Convenient Fictions
This case received little notice in 2011 and is receiving little notice now, and mainly for its business implications. Yet the reporting does suggest dots to connect to reveal some larger hypocrisies.
Dedicated to improving health and well being?
Pfizer asserts on its website that it
has remained dedicated to discovering and developing new, and better, ways to prevent and treat disease and improve health and well being for people around the world.[italics added]
Yet despite this supposed dedication to health and well-being, it has long delayed any possible compensation to people who may have acquired severe, if not fatal disease from contact with one of its products.
As per Bloomberg, note the examples of
people like Brenda Hagerich, 62, of Hot Springs, Ark., may get payments on their claims. Hagerich, whose father died in 1999 of mesothelioma, said she has been waiting for a second distribution of a $125,000 payment.
Ownership without responsibility
According to current media reports, Pfizer attorneys repeatedly contended that because Quigley was a subsidiary of Pfizer, Pfizer could not be held accountable for its actions. Yet Pfizer owned, and presumably thus gained all revenue from and chose the leadership of Quigley. At best, maintaining this fiction seems heartless given Pfizer's stated interest in peoples' "health and well being."
Who knew asbestos was dangerous?
The current reports seem to imply that Pfizer's accountability should be mitigated because at the time it acquired Quigley, no one knew that asbestos was hazardous. The Bloomberg report stated,
Quigley made asbestos-containing products from the 1940s to the 1970s, including Insulag, a powdered insulation. Pfizer, based in New York, bought the company in 1968.
But,
Pfizer has said throughout the case that it never made or sold Quigley's products and it doesn't have liability for them. Asbestos, once widely used as an insulator, was later shown to cause cancer.
The last sentence implies that asbestos was only shown to cause cancer after Pfizer acquired Quigley in 1968. However, this suggests a lack of knowledge of medical history.
In fact, evidence that asbestos was dangerous would have been readily available in 1968. Pulmonary asbestosis was recognized in 1927.(1, noted in 2). Furthermore, by 1952, as per Dr Richard Doll(3),
The majority of workers (cited by Hueper, 1952) consider that a causal relationship between asbestosis and lung cancer is either proved or is highly probable and the reality of the relationship was agreed at the recent International Symposium on the Epidemiology of Lung Cancer.
Doll reported further data in 1954 and concluded,
lung cancer was a specific industrial hazard of certain asbestos workers....
Summary
So while Pfizer officials ought to have known that in 1968 it was acquiring a company that made products that likely caused lung cancer, for more than 40 years, they have managed to stall payments to now mainly the heirs of people who acquired severe disease due to those products. This clearly suggests that in this matter the company leadership has consistently put its revenue ahead of its ostensible dedication to peoples' health and well being. Then again, this is hardly the first example of dubious ethical conduct by Pfizer. See this post for a list of the 14 legal settlements of allegations of misconduct made by Pfizer since 2000, only one of which was related to the current case.
Furthermore, dedication to short-term revenue over everything else has resulted in huge wealth for Pfizer's hired managers. Per the Wall Street Journal, only the latest example is,
The total 2012 compensation for Pfizer Inc. (PFE) Chief Executive Ian C. Read was valued at $25.6 million, up 2.5% from 2011, as the drug maker hit two out of three key financial objectives last year.
Mr. Read's compensation was based partly on the company exceeding targets for total revenue and adjusted earnings-per-share, while missing its target for cash flow in 2012, Pfizer said in a proxy statement filed Thursday with the U.S. Securities and Exchange Commission.
Presumably, the total revenue target would have been a bit lower if Pfizer had managed to set aside assets to pay the asbestos related claims discussed above in 2012 rather than in 2013.
This relatively anechoic example shows how hollow ring most of the claims by leaders of big health care organizations that they value patients' and the public's health. That may be convenient public relations puffery, but again and again the bottom line seems to matter more to them. We have shown numerous examples of mission-hostile management, and of leaders compensated outrageously out of proportion to their contributions to patients' and the public's health. Thus, why should health care professionals, or patients believe that anything they do puts patients ahead of money?
As we have said so often, health care professionals and society at large needs to hold large health care organizations' leadership accountable for their missions, and push out leaders who put their own pocketbooks and their organizations' revenue ahead of patients' and the public's health.
References
1. Cooke WE. Pulmonary asbestosis. Br Med J 1972; 2: 1024.
2. Hasan FM, Nash G, Kazemi H. Asbestos exposure and related neoplasia: the 28 year experience of a major urban hospital. Am J Med 1978, 65: 649-654. Link here.
3. Doll R. Mortality from lung cancer in asbestos workers. Br J Indust Med 1955; 12: 81-86. Link here.
Pfizer's Pfourteenth Settlement - a Small Reminder of Continuing Impunity
Friday, January 11, 2013
Well, that did not take long. Less than a month after its last legal settlements were announced, Pfizer had to settle again.
The Details of the Settlement
This case, involving charges filed by the Texas Attorney General, was only reported locally, e.g., here in the Houston Business Journal:
As usual, the settlement was about deceptions:
As usual, Pfizer had excuses:
Of course, Pfizer acquired the companies (which were listed in the settlement document as ESI Lederle, Lederle Labs, and Pharmacia) in order to make money from them. Furthermore, in acquiring the subsidiaries, Pfizer assumed responsibility for them and their actions.
As usual, there was no hint in the minimalist coverage of this settlement of any sort of negative consequences for anyone who authorized, directed, or implemented the relevant behavior, which did involve deception upon the government of Texas.
Nobody Held Responsible, Even After 14 Settlements
As is also usual, there was no mention in the media coverage, or the settlement document that Pfizer has made numerous other settlements in the recent past. By my best count, the total was up to thirteen from the beginning of the 21st century to the present, as most recently tabulated here, and listed in the Appendix below. (There may easily have been more that I missed.)
At the time of the twelfth and thirteenth settlements, we wondered whether the sheer volume of documentation of Pfizer's actions, and the sheer number of legal actions against it would finally lead to the end of the impunity of Pfizer's leaders. After all, one would think that if the town drunk showed up in court for his fourteenth drunk driving charge, the book would be figuratively thrown at him. Instead, at best, Pfizer had a wet noodle thrown at it. The costs of this settlement, and even the cumulative costs of all the previous ones over time just added up to costs of doing business. And these costs were not paid by the people who profited the most from the bad behavior, but were diffused among all stock-holders, employees, patients, and payers.
Of course, leadership and governance of Pfizer is by some very fancy people indeed, and our society has not been good lately at holding such fancy people to any standards whatsoever.
The sorts of practices discussed in Pfizer's multiple settlements have added to the revenue that have helped a lot of people live in the style to which they have become accustomed. Pfizer has had some very, very well paid executives. In 2011, according to the company's 2012 proxy statement, its CEO, Ian Read, got more than $25 million, that is to repeat more than twenty-five million dollars, count them, in total compensation. All the rest of its named executive officers got more than $5 million in total compensation. That 2012 report justified this other worldly munificence in part because
Really, after now 14 settlements?
The issue of the impunity of leaders of large organizations has finally made it to the big time. For example, a New York Times editorial called the latest US government settlement with the large banks whose exploitative mortgage practices helped to usher in the global financial collapse or great recession "another slap on the wrist." Writ large, continuing impunity is the sort of problem that indicates a degree of societal corruption that can destroy particular civilizations.
I am just a simple country doctor and can only do my small part to keep the barbarians outside the gate, but at least those who care about what has gone wrong with health care ought to be calling for vigorous, impartial law enforcement that holds leaders of health care organizations accountable for wrong-doing, and in general, changes that make leaders of health care organizations broadly accountable for their actions.
There are some luminaries from health care and academia on the current Pfizer board, like Dennis A. Ausiello, M.D.,
Jackson Professor of Clinical Medicine at Harvard Medical School and Chief of Medicine at Massachusetts General Hospital; Frances D. Fergusson, Ph.D., President Emeritus of Vassar College; Helen H. Hobbs, M.D., Investigator of the Howard Hughes Medical Institute since 2002, is a Professor of Internal Medicine and Molecular Genetics and Director of the McDermott Center for Human Growth and Development at the University of Texas (UT) Southwestern Medical Center; and Marc Tessier-Lavigne, Ph.D., President of The Rockefeller University since March 2011. Maybe some people at their base institutions ought to be asking them about Pfizer's multiple ethical lapses and what they are doing to make its leadership more accountable.
APPENDIX - Pfizer's Settlements
The Details of the Settlement
This case, involving charges filed by the Texas Attorney General, was only reported locally, e.g., here in the Houston Business Journal:
The state of Texas will receive more than $36 million from two civil Medicaid fraud settlements with Pfizer Inc and Endo Pharmaceuticals, Attorney General Greg Abbott said Friday.
Both companies will pay $18.17 million to the state, plus attorney fees and relator shares. The federal government is also entitled to a share of the total settlement, Abbott’s statement said.
As usual, the settlement was about deceptions:
State and federal law requires drug companies disclose to the Medicaid program the prices they charge pharmacies, wholesalers and distributors for their products. Texas’ lawsuits claimed the companies misreported the price of various generic drugs and overcharged Medicaid for certain products.
As usual, Pfizer had excuses:
In the Pfizer settlement, the state’s investigation originally targeted entities that are now wholly owned subsidiaries of Pfizer.
In making the settlements, neither company is admitting to any wrongdoing.
New York-based Pfizer released a statement saying the safety of its subsidiaries’ products was not an issue of the investigation and Pfizer was not a target or subject of the case.
'Pfizer’s subsidiaries are resolving this investigation to avoid the further time and cost of litigation,' the company said in its statement. 'The majority of the Texas investigation focused on reporting that took place prior to the subsidiaries being acquired by Pfizer. The company remains committed to providing accurate pricing information to the Texas Medicaid program and providing quality pharmaceutical products to the citizens of Texas.'
Of course, Pfizer acquired the companies (which were listed in the settlement document as ESI Lederle, Lederle Labs, and Pharmacia) in order to make money from them. Furthermore, in acquiring the subsidiaries, Pfizer assumed responsibility for them and their actions.
As usual, there was no hint in the minimalist coverage of this settlement of any sort of negative consequences for anyone who authorized, directed, or implemented the relevant behavior, which did involve deception upon the government of Texas.
Nobody Held Responsible, Even After 14 Settlements
As is also usual, there was no mention in the media coverage, or the settlement document that Pfizer has made numerous other settlements in the recent past. By my best count, the total was up to thirteen from the beginning of the 21st century to the present, as most recently tabulated here, and listed in the Appendix below. (There may easily have been more that I missed.)
At the time of the twelfth and thirteenth settlements, we wondered whether the sheer volume of documentation of Pfizer's actions, and the sheer number of legal actions against it would finally lead to the end of the impunity of Pfizer's leaders. After all, one would think that if the town drunk showed up in court for his fourteenth drunk driving charge, the book would be figuratively thrown at him. Instead, at best, Pfizer had a wet noodle thrown at it. The costs of this settlement, and even the cumulative costs of all the previous ones over time just added up to costs of doing business. And these costs were not paid by the people who profited the most from the bad behavior, but were diffused among all stock-holders, employees, patients, and payers.
Of course, leadership and governance of Pfizer is by some very fancy people indeed, and our society has not been good lately at holding such fancy people to any standards whatsoever.
The sorts of practices discussed in Pfizer's multiple settlements have added to the revenue that have helped a lot of people live in the style to which they have become accustomed. Pfizer has had some very, very well paid executives. In 2011, according to the company's 2012 proxy statement, its CEO, Ian Read, got more than $25 million, that is to repeat more than twenty-five million dollars, count them, in total compensation. All the rest of its named executive officers got more than $5 million in total compensation. That 2012 report justified this other worldly munificence in part because
We continued to improve our reputation in society through engagement with our customers, our shareholders, and the investor community.
Really, after now 14 settlements?
The issue of the impunity of leaders of large organizations has finally made it to the big time. For example, a New York Times editorial called the latest US government settlement with the large banks whose exploitative mortgage practices helped to usher in the global financial collapse or great recession "another slap on the wrist." Writ large, continuing impunity is the sort of problem that indicates a degree of societal corruption that can destroy particular civilizations.
I am just a simple country doctor and can only do my small part to keep the barbarians outside the gate, but at least those who care about what has gone wrong with health care ought to be calling for vigorous, impartial law enforcement that holds leaders of health care organizations accountable for wrong-doing, and in general, changes that make leaders of health care organizations broadly accountable for their actions.
There are some luminaries from health care and academia on the current Pfizer board, like Dennis A. Ausiello, M.D.,
Jackson Professor of Clinical Medicine at Harvard Medical School and Chief of Medicine at Massachusetts General Hospital; Frances D. Fergusson, Ph.D., President Emeritus of Vassar College; Helen H. Hobbs, M.D., Investigator of the Howard Hughes Medical Institute since 2002, is a Professor of Internal Medicine and Molecular Genetics and Director of the McDermott Center for Human Growth and Development at the University of Texas (UT) Southwestern Medical Center; and Marc Tessier-Lavigne, Ph.D., President of The Rockefeller University since March 2011. Maybe some people at their base institutions ought to be asking them about Pfizer's multiple ethical lapses and what they are doing to make its leadership more accountable.
APPENDIX - Pfizer's Settlements
In the beginning of the 21st century, according to the Philadelphia Inquirer, Pfizer made three major settlements,
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).
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).
In December, 2012, Pfizer settled federal charges that its Wyeth subsidiary deceptively marketed the proton pump inhibitor drug Protonix, using systematic efforts to deceive approved by top management, and settled charges by multiple states' Attorneys' General that it deceptively marketed Zyvox and Lyrica (see this post).
Pfizer's 13th Legal Settlement - Will it be Enough to End the Impunity?
Thursday, December 13, 2012
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:
A report in the examiner explained that Wyeth did not merely go beyond the label in promoting Protonix, it went beyond the evidence.
Furthermore, the charges were that systemic efforts to mislead were sanctioned by top management:
Finally, the government asserted that Wyeth corrupted physicians' continuing medical education in the process:
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:
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.
Impunity, though, is a concept that is beginning to command some attention.
Unlike Pfizer's slow-motion impunity, this example got attention. The Los Angeles Times noted,
A NY Times editorial opened,
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.
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,
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).
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.
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.
When Clinical Trials are Meant for Marketing, not Science
Friday, October 19, 2012
The development of the randomized controlled clinical trial (RCT) was one of the major scientific advances in clinical medicine. RCTs provide a major part of the evidence underlying evidence based medicine. RCTs provide a major source of data used by the US Food and Drug Administration, and similar agencies in other countries, to decide whether to approve drugs or devices to manage particular clinical problems. Unfortunately, with the rise of the RCT came a rise in attempts to suppress and manipulate clinical trials by those with vested interests, often in selling the products and services the trials can evaluate.
Many of the examples we have discussed were of attempts at manipulation or suppression of clinical trials originally done to provide evidence for product approval, or even ostensibly to advance clinical science. Yet a relatively new article covering evidence revealed from litigation about the drug gabapentin (Neurontin) originally made by Parke-Davis, first a part of Warner Lambert, now part of Pfizer suggests that many clinical trials may not be done to advance science, or even just to provide data to regulators, but only to market products.
The article is Vedula SS, Goldman PS, Rona IJ, Greene TM, and Dickersin K. Implementation of a publication strategy in the context of reporting biases: a case study based on new documents from the Neurontin litigation. Trials 2012; 13: 136. Link here.
Methods Summary
The article described a case study based on documents revealed in 2008 litigation. The purpose of the study was:
The study examined documents revealed through the 2008 litigation. It concentrated on documents relating to the marketing of Neurontin for four off-label indications, that is, for four potential reasons to use the drug which had not yet been approved by the US FDA. It focused on documents discussing strategies for marketing for these indications, and then documents about particular company sponsored RCTs done for these indications.
Strategies to Sell Drugs
The documents examined by the investigators showed that Parke-Davis prepared "marketing assessments" for four possible indications for Neurontin. The assessments discussed two possible strategies. The "indication strategy" would be to conduct trials for the purposes of providing data to the FDA in the hope that the FDA would then approve the new indication for the drug. The "marketing strategy" would be, in the words of an internal company memo quoted in the study, to conduct clinical trials and
In other words, the publication strategy involved using RCTs first for marketing, rather than scientific or regulatory purposes.
How the Trials were Controlled by Marketers
The publication strategy involved not simply doing trials and publicizing their results, but controlling the messages conveyed by the trials to make sure they primarily supported marketing. This was done by having the company's marketing department control the content of the trial reports.
The marketers controlled content by controlling those who wrote it.
Note that the control of publication by marketers describe above involved ghost-writing of articles by medical education and communications companies (MECCs). Later the article explained that these ghost writers were "not appropriately acknowledged" in the resulting published articles.
The Vedula et al study article provided examples of "spin" in the writing of again supposedly scholarly research publications used in fact to support marketing, and controlled if not composed by marketers.
Note that while most of these examples of spin involved manipulation of the dissemination of study results, that is, doubtful, biased or fallacious arguments based on apparently unbiased data, they also involved manipulation of the analyses (in italics).
The article also described manipulation of dissemination involving the timing of publication, including delaying publication of an article despite the wishes of the study's investigators because the results were not statistically significant, and hence not favorable for marketing.
Summary
Documents revealed by litigation about Neurontin in 2004 provided insights about how pharmaceutical and presumably other kinds of health care corporations may conduct systematic, deceptive stealth marketing campaigns to promote their products and services (look here). We noted that initial media coverage of documents revealed in the 2008 litigation also suggested the existence of a systematic "publication strategy" to control dissemination of results of particular trials, while suppressing trials whose results could not easily be spun to provide support of marketing objectives (look here).
Now the new paper by Verdula et al fill out our knowledge of this case. The paper suggests that randomized controlled clinical trials may be done not to advance science, or even convince regulators, but primarily to market their sponsors' products. Thus some significant proportion of the clinical research literature, the literature that physicians and other health professionals have relied upon to make evidence-based decisions for their patients, may exist mainly for marketing purposes. Even the most rigorous methods used by clinical epidemiologists to review research are meant to discover problems that arose from human error or the inevitable trade-offs made when research is done in the real world, but not deliberately introduced biases and defects meant to promote vested interests. Thus it is not clear that even the most "evidence-based" medical decisions are based on real scientific evidence rather than the spinning of marketers.
Thus health care professionals, policy makers, researchers, and the interested public need to be even more skeptical about arguments made to promote innovative treatments and other clinical interventions. However, it is not clear that even rigorous skepticism can defend the integrity of evidence based medicine from marketing disguised as clinical research.
Going forward, we must consider erecting an impregnable barrier between clinical research and those whose primary interest is to make money by selling health care goods and services. If we do not do that, we will forever need to worry that we really have no idea what "works in medicine," and whether any particular test, treatment, or program provides benefits that outweigh its harms.
Many of the examples we have discussed were of attempts at manipulation or suppression of clinical trials originally done to provide evidence for product approval, or even ostensibly to advance clinical science. Yet a relatively new article covering evidence revealed from litigation about the drug gabapentin (Neurontin) originally made by Parke-Davis, first a part of Warner Lambert, now part of Pfizer suggests that many clinical trials may not be done to advance science, or even just to provide data to regulators, but only to market products.
The article is Vedula SS, Goldman PS, Rona IJ, Greene TM, and Dickersin K. Implementation of a publication strategy in the context of reporting biases: a case study based on new documents from the Neurontin litigation. Trials 2012; 13: 136. Link here.
Methods Summary
The article described a case study based on documents revealed in 2008 litigation. The purpose of the study was:
to describe the implementation of a publication strategy for off-label marketing of gabapentin, within the context of reporting biases and spin of Pfizer and Parke-Davis’s clinical trial findings, for four off-label uses: migraine prophylaxis, treatment of bipolar disorders, neuropathic pain, and nociceptive pain.
The study examined documents revealed through the 2008 litigation. It concentrated on documents relating to the marketing of Neurontin for four off-label indications, that is, for four potential reasons to use the drug which had not yet been approved by the US FDA. It focused on documents discussing strategies for marketing for these indications, and then documents about particular company sponsored RCTs done for these indications.
Strategies to Sell Drugs
The documents examined by the investigators showed that Parke-Davis prepared "marketing assessments" for four possible indications for Neurontin. The assessments discussed two possible strategies. The "indication strategy" would be to conduct trials for the purposes of providing data to the FDA in the hope that the FDA would then approve the new indication for the drug. The "marketing strategy" would be, in the words of an internal company memo quoted in the study, to conduct clinical trials and
to disseminate the information as widely as possible through the world’s medical literature
In other words, the publication strategy involved using RCTs first for marketing, rather than scientific or regulatory purposes.
How the Trials were Controlled by Marketers
The publication strategy involved not simply doing trials and publicizing their results, but controlling the messages conveyed by the trials to make sure they primarily supported marketing. This was done by having the company's marketing department control the content of the trial reports.
A Neurontin Publications Subcommittee (NTN PSC) was formed within Pfizer and Parke-Davis to implement a publication plan. Minutes from meetings between the NTN PSC and Medical Action Communications (MAC), a medical writing company, indicate that a list of key messages, guiding the content of published reports related to the trials of gabapentin for off-label indications, was developed based on a branding guideThus it appeared to be that marketers, not physicians or scientists were in control of supposedly scholarly research publications appearing in medical journals.
The marketers controlled content by controlling those who wrote it.
A standard operating procedure related to publication of affiliate-driven manuscripts was identified in internal company documents dated October 16, 2002, and it sheds further light on the publication planning process (see Figure 3). (The term affiliate in this context refers to Pfizer’s foreign affiliates, that is, corporations related to Pfizer by either shareholdings or other means of control, including subsidiary, parent, or sibling corporations). According to the internal company documents, 'affiliate-driven manuscripts' were written for Pfizer and Parke-Davis by MAC and sent to the authors for approval. Each article was coordinated by a manuscript team, consisting of representatives from the medical and marketing divisions of the company. The documents also indicate that all affiliate-driven manuscripts should be forwarded to the NTN PSC for review. One of the objectives of manuscripts being reviewed by the NTN PSC was to ‘ensure that they are in-line with current product messages and areas of interest’Manipulating the Dissemination (and Analysis) of Research Results
Note that the control of publication by marketers describe above involved ghost-writing of articles by medical education and communications companies (MECCs). Later the article explained that these ghost writers were "not appropriately acknowledged" in the resulting published articles.
The Vedula et al study article provided examples of "spin" in the writing of again supposedly scholarly research publications used in fact to support marketing, and controlled if not composed by marketers.
We identified spin in publications related to 8/12 trials included in our analysis.... We classified the following as spin: emphasis in the published report on outcomes that were not specified in the study protocol (Study 879–201) ...; conclusions that did not match study findings described in the internal company research report (Study 945–220) ...; extensive rationale to explain away statistically non-significant (unfavorable to the sponsor) findings (Study 945–209; 945–291; No study number - Gorson) ...; conclusion of treatment effectiveness from an uncontrolled study (Study 945–250) ...; emphasis on statistically significant secondary outcomes despite negative findings for the primary outcome (Study 945–271) ...; and an explicit description of an attempt to spin study findings (as described in internal company emails) (Study 945–306).
Note that while most of these examples of spin involved manipulation of the dissemination of study results, that is, doubtful, biased or fallacious arguments based on apparently unbiased data, they also involved manipulation of the analyses (in italics).
The article also described manipulation of dissemination involving the timing of publication, including delaying publication of an article despite the wishes of the study's investigators because the results were not statistically significant, and hence not favorable for marketing.
Summary
Documents revealed by litigation about Neurontin in 2004 provided insights about how pharmaceutical and presumably other kinds of health care corporations may conduct systematic, deceptive stealth marketing campaigns to promote their products and services (look here). We noted that initial media coverage of documents revealed in the 2008 litigation also suggested the existence of a systematic "publication strategy" to control dissemination of results of particular trials, while suppressing trials whose results could not easily be spun to provide support of marketing objectives (look here).
Now the new paper by Verdula et al fill out our knowledge of this case. The paper suggests that randomized controlled clinical trials may be done not to advance science, or even convince regulators, but primarily to market their sponsors' products. Thus some significant proportion of the clinical research literature, the literature that physicians and other health professionals have relied upon to make evidence-based decisions for their patients, may exist mainly for marketing purposes. Even the most rigorous methods used by clinical epidemiologists to review research are meant to discover problems that arose from human error or the inevitable trade-offs made when research is done in the real world, but not deliberately introduced biases and defects meant to promote vested interests. Thus it is not clear that even the most "evidence-based" medical decisions are based on real scientific evidence rather than the spinning of marketers.
Thus health care professionals, policy makers, researchers, and the interested public need to be even more skeptical about arguments made to promote innovative treatments and other clinical interventions. However, it is not clear that even rigorous skepticism can defend the integrity of evidence based medicine from marketing disguised as clinical research.
Going forward, we must consider erecting an impregnable barrier between clinical research and those whose primary interest is to make money by selling health care goods and services. If we do not do that, we will forever need to worry that we really have no idea what "works in medicine," and whether any particular test, treatment, or program provides benefits that outweigh its harms.
Pfizer's Pforeign Pfiasco
Tuesday, August 21, 2012
Quelle surprise. Giant international pharmaceutical company Pfizer managed to go for nearly 10 months without announcing a major legal settlement. However, this month, as reported by Bloomberg, it was time for Pfizer to settle again. The basics were:
Bribery
This case is worth perusing because of how it documents what the US government called not merely deceptive, but corrupt practices used by Pfizer to sell drugs. The practices were widespread around the world:
The practices involved, not to put too fine a point on it, bribing doctors. Furthermore, as part of the settlement Pfizer apparently admitted to some of the specific practices alleged by the government:
No Individual Penalties
Despite the shamefulness of these practices, as is now distressingly usual (look here), no individual seems to be obligated to suffer any penalty or negative consequences as a result of this settlement. While the US government alleged criminal behavior, beyond the fines imposed on the company, further prosecution will be deferred:
The article contained a curious statement seemingly asserting that the payments were somehow made independent of any actions by individuals at Pfizer:
So were the payments made by machines acting autonomously? or by ghosts? Maybe this was just a typo. However, note that the de rigeur statement by Pfizer's internal counsel was phrased so as to imply the actions somehow occurred outside of the organization:
Summary
This latest settlement reaffirms the poor ethical culture now prevalent in major health care organizations throughout the world. It also affirms how deeply unethical the culture has become at some of our largest and most prominent and influential health care organizations. This settlement is only the latest evidence of ethical missteps by Pfizer's leadership.
In the beginning of the 21st century, according to the Philadelphia Inquirer, Pfizer made three major settlements,
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).
Thus, it appears on 10 separate occasions between 2002 and 2012, Pfizer settled allegations of, pleaded guilty to, or was convicted for actions that represented seriously unethical behavior. Note that these included a conviction that found the company to be a racketeer-influenced corrupt organization.
Yet the company has not failed or been restructured, and none of its leaders has ever faced any negative consequences. In fact, last year its CEO made over $18 million, up from over $6 million the year before (see this post).
So obviously it is not just that one company's culture has become seriously corrupt. We seem to live in such a corrupt nation, and maybe such a corrupt global society that such corrupt cultures thrive in our major corporations and organizations. Despite stories like this in health care, just like in finance despite the global financial collapse, as Charles Ferguson said at the Oscar awards last year, " not a single ... executive has gone to jail, and that's wrong."
Unless we hold leaders of health care organizations accountable for bad behavior and corruption, expect bad behavior and corruption to get worse. Until we have political leaders with the courage to stand up for honesty and the law, expect continued dishonesty and the law to continue to be trampled by the rich and powerful.
Pfizer Inc., the world’s biggest drugmaker, agreed to pay $60.2 million to settle foreign bribery cases it brought to U.S. authorities involving alleged payments paid by employees and agents of subsidiaries.
Pfizer entered into two agreements with the Securities and Exchange Commission and the New York-based drugmaker reached a deferred prosecution accord with the Department of Justice, according to filings today in federal court in Washington.
Bribery
This case is worth perusing because of how it documents what the US government called not merely deceptive, but corrupt practices used by Pfizer to sell drugs. The practices were widespread around the world:
The settlements announced today include Pfizer operations in eight countries: Bulgaria, Croatia, Kazakhstan, Russia, Italy, China, the Czech Republic and Serbia. The Wyeth settlement, over its nutrition business, was for China, Indonesia, Saudi Arabia and Pakistan.
The practices involved, not to put too fine a point on it, bribing doctors. Furthermore, as part of the settlement Pfizer apparently admitted to some of the specific practices alleged by the government:
In Bulgaria, local representatives spent $28,000 to invite government doctors on 'incentive trips' to Greece, as a reward for the physicians who were the biggest prescribers of Pfizer’s products, Pfizer admitted according to the Justice Department filing. They also paid $17,000 to send doctors to medical conferences, again in exchange for commitments to prescribe Pfizer drugs.
In Croatia, the unit there had used a consulting agreement with a government doctor to help influence which drugs were allowed to be sold in the country, paying the physician in cash and travel expenses, Pfizer admitted.
Pfizer also admitted to what was called the 'hospital program,' in Russia, where doctors were given a 5 percent kick- back on certain drugs prescribed.
'Pfizer Russia used the Hospital Program to make cash payments to individual government healthcare professionals to corruptly reward past purchases and prescriptions of Pfizer products, and to corruptly induce future purchases and prescriptions,' the Justice Department said in the filing. Pfizer’s Russian unit also used intermediary companies to pay off doctors and government officials, the company admitted.
No Individual Penalties
Despite the shamefulness of these practices, as is now distressingly usual (look here), no individual seems to be obligated to suffer any penalty or negative consequences as a result of this settlement. While the US government alleged criminal behavior, beyond the fines imposed on the company, further prosecution will be deferred:
The Justice Department charged the Pfizer HCP Corp. unit with two criminal counts, conspiracy to violate the Foreign Corrupt Practices Act and a violation of the FCPA’s anti-bribery provisions. Prosecutors agreed to defer prosecution and drop the charges after two years if Pfizer continues to cooperate and take remedial steps.
The article contained a curious statement seemingly asserting that the payments were somehow made independent of any actions by individuals at Pfizer:
The SEC said the payoffs were made 'without the knowledge or approval of officers or employees of Pfizer, but the inaccurate books and records of Pfizer subsidiaries were consolidated in the financial reports of Pfizer.'
So were the payments made by machines acting autonomously? or by ghosts? Maybe this was just a typo. However, note that the de rigeur statement by Pfizer's internal counsel was phrased so as to imply the actions somehow occurred outside of the organization:
'The actions which led to this resolution were disappointing, but the openness and speed with which Pfizer voluntarily disclosed and addressed them reflects our true culture and the real value we place on integrity and meeting commitments,' Amy Schulman, Pfizer’s general counsel, said in an e-mailed statement.
Summary
This latest settlement reaffirms the poor ethical culture now prevalent in major health care organizations throughout the world. It also affirms how deeply unethical the culture has become at some of our largest and most prominent and influential health care organizations. This settlement is only the latest evidence of ethical missteps by Pfizer's leadership.
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).
Thus, it appears on 10 separate occasions between 2002 and 2012, Pfizer settled allegations of, pleaded guilty to, or was convicted for actions that represented seriously unethical behavior. Note that these included a conviction that found the company to be a racketeer-influenced corrupt organization.
Yet the company has not failed or been restructured, and none of its leaders has ever faced any negative consequences. In fact, last year its CEO made over $18 million, up from over $6 million the year before (see this post).
So obviously it is not just that one company's culture has become seriously corrupt. We seem to live in such a corrupt nation, and maybe such a corrupt global society that such corrupt cultures thrive in our major corporations and organizations. Despite stories like this in health care, just like in finance despite the global financial collapse, as Charles Ferguson said at the Oscar awards last year, " not a single ... executive has gone to jail, and that's wrong."
Unless we hold leaders of health care organizations accountable for bad behavior and corruption, expect bad behavior and corruption to get worse. Until we have political leaders with the courage to stand up for honesty and the law, expect continued dishonesty and the law to continue to be trampled by the rich and powerful.
There They Go Again - Pfizer CEO Compensation Triples, Ordinary Employees' Severance Cut
Tuesday, April 10, 2012
In mid-March, Pfizer, which used to proclaim itself to be the world's largest research-based pharmaceutical company, announced in a regulatory filing a huge increase in total compensation for its relatively new CEO. Per the AP, via the Wall Street Journal:
Contrast: Decreasing Research and Development Spending, Facilities, Employment
Mr Read seems to have been rewarded for decreasing the scope of research and cutting research spending:
Reuters noted that involved sweeping layoffs and the closure of multiple research facilities:
Contrast: Long-Term Shareholder Value
Read traded research capacity, and presumably the long-term value of the company, for an immediate boost in the stock price,
On the other hand, a quick look at Google Finance reveals that while the stock price is higher than it has been since 2009, it is roughly half of what it was from the late 1990s until 2004.
On its web-site, the company still proclaims, however,
Contrast: Treatment of Other Employees
Note that Mr Read is an employee of Pfizer, albeit its most highly paid employee by a huge margin.
Other employees are not being treated so well. The massive increase in CEO compensation should also be contrasted with the company's new severance policies, as explained in an article from last week in The (New London, CT) Day,
Summary
While Pfizer recently has made an amazing series of ethical missteps (look here), a decreasing drug pipeline, lost half of its stock price since its peak, and decreased its ability to develop new products, it has quickly returned to its previous ways of making its top hired executives very rich. (No matter, by the way, that Mr Read ought to bear some responsibility for the company's previous problems, since as the AP pointed out, he "has spent his entire career at the New York-based drugmaker, became Pfizer's CEO in December 2010 after running its worldwide pharmaceutical business since 2006.")
This is just the latest of many, many examples of how top hired executives of health care organizations are not like you and me. Whatever is happening to their organization, whatever its faithfulness to its mission, its performance, its value, its treatment of employees in general, many CEOs just get to take more and more off the top. Given this perverse incentive structure, is there really any question why most health care organizations do not always seem to put patients' or the public's health, or health care professionals' values, or their employees' welfare, or even their owners' financial interests (when they are publicly held for-profit corporations) first? Or why health care costs steadily increase while quality and access decrease?
Repeat after me - we will never solve the problem of health care dysfunction until we assure that the leaders of health care organizations are well-informed about the context of health care, uphold health care professionals' values, put patients' and the public's health first, are accountable and transparent, and receive reasonable incentives based on all the above.
Pfizer Inc. nearly tripled CEO Ian Read's compensation in 2011, his first full year as top executive of the world's largest drugmaker, which has been cutting costs and making other moves to compensate for generic competition hurting sales of top medicines.
Read, 58, received compensation worth a total of $18.12 million in 2011, up from $6.42 million in 2010, according to an Associated Press analysis of a regulatory filing Thursday by the maker of Viagra and cholesterol fighter Lipitor.
The total includes a salary of $1.7 million, up 42 percent, stock awards and option awards totaling about $12.5 million, a $3.5 million incentive award and about $319,000 in other compensation. The last category ranges from use of company aircraft and a car and driver to contributions to Read's retirement savings.
Contrast: Decreasing Research and Development Spending, Facilities, Employment
Mr Read seems to have been rewarded for decreasing the scope of research and cutting research spending:
Over the past year, Read has narrowed the focus of Pfizer's huge research operations to diseases with big sales potential or few existing treatment options, trimming the research budget significantly in the process.
Reuters noted that involved sweeping layoffs and the closure of multiple research facilities:
Pfizer said it had improved its performance during 2011 by reducing research spending by nearly $1 billion. That feat came, however, at the expense of thousands of Pfizer researchers, whose jobs are being eliminated along with numerous laboratories in an effort to ultimately slash Pfizer research spending by up to $2 billion a year.
Contrast: Long-Term Shareholder Value
Read traded research capacity, and presumably the long-term value of the company, for an immediate boost in the stock price,
Pfizer, under Read, has narrowed its focus to five main therapeutic areas and is considering either selling or spinning off its nutritional products and animal health units.
Proceeds from the transactions will likely be used to buy back company shares, Read has said, delighting investors and helping boost company shares almost 27 percent in the past twelve months.
On the other hand, a quick look at Google Finance reveals that while the stock price is higher than it has been since 2009, it is roughly half of what it was from the late 1990s until 2004.
On its web-site, the company still proclaims, however,
we at Pfizer are committed to applying science and our global resources to improve health and well-being at every stage of life.
Contrast: Treatment of Other Employees
Note that Mr Read is an employee of Pfizer, albeit its most highly paid employee by a huge margin.
Other employees are not being treated so well. The massive increase in CEO compensation should also be contrasted with the company's new severance policies, as explained in an article from last week in The (New London, CT) Day,
Pfizer Inc. personnel being laid off at the company's Groton laboratories after May 14 will receive less money than previous waves of departing workers have received.
Pfizer, at the tail end of a planned 1,100 layoffs locally, said in a memo released last week that in the future people leaving the company will receive eight weeks of severance in addition to two weeks for every year served with the company. The pharmaceutical giant had previously offered at least 12 weeks of severance to employees, and before acquiring Wyeth Pharmaceuticals in 2009 had handed out three weeks of pay for every year served.
Summary
While Pfizer recently has made an amazing series of ethical missteps (look here), a decreasing drug pipeline, lost half of its stock price since its peak, and decreased its ability to develop new products, it has quickly returned to its previous ways of making its top hired executives very rich. (No matter, by the way, that Mr Read ought to bear some responsibility for the company's previous problems, since as the AP pointed out, he "has spent his entire career at the New York-based drugmaker, became Pfizer's CEO in December 2010 after running its worldwide pharmaceutical business since 2006.")
This is just the latest of many, many examples of how top hired executives of health care organizations are not like you and me. Whatever is happening to their organization, whatever its faithfulness to its mission, its performance, its value, its treatment of employees in general, many CEOs just get to take more and more off the top. Given this perverse incentive structure, is there really any question why most health care organizations do not always seem to put patients' or the public's health, or health care professionals' values, or their employees' welfare, or even their owners' financial interests (when they are publicly held for-profit corporations) first? Or why health care costs steadily increase while quality and access decrease?
Repeat after me - we will never solve the problem of health care dysfunction until we assure that the leaders of health care organizations are well-informed about the context of health care, uphold health care professionals' values, put patients' and the public's health first, are accountable and transparent, and receive reasonable incentives based on all the above.
Labels:
executive compensation,
imperial CEO,
Pfizer
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