Healthy Skepticism Library item: 10393

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Publication type: news

Cassels A.
Is the pharmaceutical industry immoral, dishonest, corrupt?
Common Ground 2007 Jun
http://commonground.ca/iss/0706191/cg191_pharma.shtml

Full text:

It’s amazing what gets dredged up and put into the public record. Hansard is the official written record of verbal jousting by our parliamentarians and it contains some absolute gems.

Earlier this year, on February 2 to be exact, in the Select Standing Committee on Public Accounts, Liberal MLA Ralph Sultan from West-Vancouver Capilano asked a senior member of the BC Ministry of Health if it is true that the ministry sponsored a conference in which “… some rather colourful language was used to describe the pattern of behaviour one observes in the pharmaceutical industry – namely ‘immoral, dishonest and corrupt?’” He went on to probe the official to find out if he endorsed these rather negative views.

The health official’s answer is not that interesting. He merely stated the obvious: that, speakers at health conferences sponsored by BC universities are not censored by the Ministry of Health. What is interesting is the fact that the question even got asked in the legislature in the first place. But there it is, standing there in all its public glory, a bold and stark question: Is the pharmaceutical industry immoral, dishonest and corrupt?

How should one approach that one? Hmm. Let’s start by reframing that question in research terms: Is there any convincing evidence to suggest that the pharmaceutical industry acts in an immoral, dishonest and corrupt fashion? If so, what is the nature of this evidence? How strong is it? What evidence is there to disprove this thesis? And so on.

As for countering evidence, there is ample evidence of good works by the pharmaceutical industry. It is undeniable that some products produced by drug companies work for the benefit of humanity, relieving pain and suffering and so on, and that the philanthropic work by groups sponsored by the pharmaceutical industry often makes drugs available to the poor. And there are clearly many ethical people within the pharmaceutical industry trying to do what is right. The evidence for this is undeniable.

But what about the dark side – the allegations of corruption, dishonesty and immorality in the industry? Where should we start? How about looking at the literature around the industry’s record? A somewhat dated, but solid, look at drug industry lawlessness can be found in John Braithwaite’s book Corporate Crime in the Pharmaceutical Industry (1984). Braithwaite pulls no punches in saying, “Every scholar who has surveyed the comparative evidence on bribery in international trade has concluded that pharmaceuticals is one of the most corrupt, if not the most corrupt, of industries.

My own research found evidence of substantial bribery by 19 of the 20 largest American pharmaceutical companies. There is evidence of bribes being paid to every type of government official who could conceivably affect the interests of pharmaceutical companies: bribes to cabinet ministers to get drugs approved for marketing, bribes to social security bureaucrats who fix prices for subsidized drugs, to health inspectors who check pharmaceutical manufacturing plants and to customs officials, hospital administrators, tax assessors, political parties and others.”
Those are pretty strong words, but are there any more recent charges we can find that underpin those assertions?

Exhibit A has to be the largest fine ever paid by a drug company. In May 2004, Pfizer pleaded guilty in a US federal court to criminal fraud charges for the unlawful promotion and marketing of Neurontin, a drug for epilepsy that was marketed for almost everything, including pain and psychiatric illnesses. Pfizer, which inherited the drug when it bought Warner-Lambert, paid $430 million in settlement, the largest fine ever paid to date.

The May 2004 press release issued by the Office of the Attorney General of California said that the Neurontin settlement was a penalty to “resolve fraud, deceptive marketing and kickback allegations.” A drug company cannot legally promote a drug for a use that the regulator has not approved. Basically, if your drug is approved to treat A, B and C, you can’t then tell doctors it is also good for X, Y and Z. That’s very illegal. But that’s what appears to have happened between 1995 and 2002, when Pfizer and Warner Lambert engaged in a massive and deliberate program designed to get doctors to prescribe Neurontin for all kinds of unapproved uses, without the relevant safety and efficacy data being in place, thus exposing patients to harm.

Did that stop other pharmaceutical companies from promoting drugs beyond their approved uses in the future? No way. Some say the $430 million settlement payment was a wimpy slap on the wrist, given the loot the company raked in on the drug was estimated to be as high as $2.7 billion per year. It pays to market drugs off-label, even if you get caught. One physician friend of mine reckons that 30 percent, or about one third of all prescriptions written, is for off-label or unapproved uses. Is this true? I have no idea, but what I do know is that given the economics of getting caught, it makes sense to do what is profitable and go ahead because the drug might be good for X, Y and Z.!
Just this year, another pharmaceutical company, Schering-Plough Corp, was caught promoting two drugs for unapproved uses in cancer patients and got hit with a $435 million shot to the books. Are these the only examples? No, not at all. The list seems endless.

Another mondo drug company, AstraZeneca, was convicted of felony charges in June 2003, pleading guilty to charges of healthcare fraud. It paid $355 million to settle criminal and civil accusations that it engaged in a nationwide scheme to illegally market a prostate cancer drug.
Over the past 10 years in the US, some of the biggest names in the business, Pfizer, AstraZeneca and Eli Lilly have been targeted by federal prosecutors for marketing their products illegally and they have had to pay hefty fines. In April, the Associated Press reported that, “… since 1997, when the Justice Department began receiving funding earmarked for fighting health care fraud, the federal government has collected $11.87 billion in fines for various violations.” You read that correctly. That was billion, not million.

Drug company associations maintain codes of conduct, but it is useful to look at the way the associations deal with their own members’ dishonest conduct.

Just last year, the Canadian branch of AstraZeneca was put on probation and fined by its own industry association (Rx&D), Canada’s Research-based Pharmaceutical Companies for multiple and “unprecedented” violations of the group’s code of ethical conduct. Seems what broke the camel’s back in this case was the use of perks for doctors, such as an “educational” event for doctors in Jamaica in a snazzy hotel. Rx&D told the National Post, “We’re sending out a clear message; there will be no tolerance of non-compliance. This is serious.”

Serious? I’d say things are serious when people go to jail, like with Enron where company executives are hauled off in handcuffs. That’s serious. How many drug industry executives have been jailed for its exploits? How many Merck executives wore the orange jumpsuit after the world’s biggest drug disaster, Vioxx? Nada. None. Zip. Seems like the motto is: you do the crime, but you don’t do the time. Sad.

So back to the question in our legislature over the practices of the pharmaceutical industry. If these court- ordered settlements and fines, industry-imposed letters of reprimand and other forms of condemnation of industry practices aren’t evidence of dishonesty, what are they? Does the Liberal member from West-Vancouver Capilano have any substantive evidence to disprove these charges? And what would he suggest? That we award the companies with even more public money for their conduct? I’d really like to know.

But maybe it’s not that easy. Dishonesty and immorality are human qualities; can they even be applied to a corporation? Some people, like the famous economist Milton Friedman, have argued that a corporation is only a legal entity and cannot act immorally or morally. It can have no moral responsibility; it is amoral and bears a financial responsibility to shareholders only. Full stop.
But if you look at the rights that a corporation possesses – rights of citizenry and rights of expression, for example – perhaps it should be judged in the same way that an individual is judged when he commits a wrongful act knowingly and willingly.

At the end of the day, consumers and physicians act on information that is developed, gathered, shaped and disseminated by the very companies that are selling the products. In the past, those same companies have been accused and charged with illegal and unethical behaviour. In some cases, they have gotten away with things. But the question is should we trust them in the future? Again, it’s undeniable that there are good, ethical people working in the drug industry. It is also fair to say some drug companies can accurately be called convicted felons.
You might want to ask if we should trust our drug-use decisions to convicted felons. Now that’s a question I’d like to ask in the legislature.
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Correction:

Subsequent to the print publication of this article, a /Common Ground/ reader advised Cassels that the following information from the article is inaccurate: “Just this year, another pharmaceutical company, Schering-Plough Corp, was caught promoting two drugs for unapproved uses in cancer patients and got hit with a $435 million shot to the books.” The reader advised: “Schering-Plough Corp did not get caught just this year, but instead, in 2006 cleaned up the mess left over by the leadership team that ran the company back in 2001.” The company was actually fined in 2006. Furthermore, according to the reader, “Schering Plough has gone through an important turn-around since Fred Hassan has taken over, and they have changed the management team and spent billions fixing the company and cleaning up issues like this one.”
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Alan Cassels is co-author of Selling Sickness and a drug policy researcher at the University of Victoria. He is also the founder of Media Doctor Canada, which evaluates reporting of medical treatments in Canada’s media. www.mediadoctor.ca