Reich writes: "Earlier this week the Justice Department announced a $3 billion settlement of criminal and civil charges against pharma giant GlaxoSmithKline, $3 billion may sound like a lot of money, but during these years Glaxo made $27.5 billion on three antidepressants alone."
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
How Not to Get Big Pharma to Change Its Ways
06 July 12
arlier this week the Justice Department announced a $3 billion settlement of criminal and civil charges against pharma giant GlaxoSmithKline — the largest pharmaceutical settlement in history — for improper marketing prescription drugs in the late 1990s to the mid-2000s.
The charges are deadly serious. Among other things, Glaxo was charged with promoting to kids under 18 an antidepressant approved only for adults; pushing two other antidepressants for unapproved purposes, including remedying sexual dysfunction; and, to further boost sales of prescription drugs, showering doctors with gifts, consulting contracts, speaking fees, even tickets to sporting events.
$3 billion may sound like a lot of money, but during these years Glaxo made $27.5 billion on these three antidepressants alone, according to IMS Health, a data research firm — so the penalty could almost be considered a cost of doing business.
Besides, to the extent the penalty affects Glaxo’s profits and its share price, the wrong people will be feeling the financial pain. Most of today’s Glaxo shareholders bought into the company after the illegal profits were already built into the prices they paid for their shares.
Not a single executive has been charged — even though some charges against the company are criminal. Glaxo’s current CEO came on board after all this happened. Glaxo has agreed to reclaim the bonuses of any executives who engaged in or supervised illegal behavior, but the company hasn’t officially admitted to any wrongdoing – and without legal charges against any of executive it’s impossible to know whether Glaxo will follow through.
The Glaxo case is the latest and biggest in a series of Justice Department prosecutions of Big Pharma for illegal marketing prescription drugs. In May, Abbott Laboratories settled for $1.6 billion over its wrongful marketing of an antipsychotic. And an agreement with Johnson & Johnson is said to be imminent over its marketing of another antipsychotic, which could result in a fine of as much as $2 billion.
The Department says the prosecutions are well worth the effort. By one estimate it’s recovered more than $15 for every $1 it’s spent.
But what’s the point if the fines are small relative to the profits, if the wrong people are feeling the financial pinch, and if no executive is held accountable?
The only way to get big companies like these to change their behavior is to make the individuals responsible feel the heat.
An even more basic issue is why the advertising and marketing of prescription drugs is allowed at all, when consumers can’t buy them and shouldn’t be influencing doctor’s decisions anyway. Before 1997, the Food and Drug Administration banned such advertising on TV and radio. That ban should be resurrected.
Finally, there’s no good reason why doctors should be allowed to accept any perks at all from companies whose drugs they write prescriptions for. It’s an inherent conflict of interest. Codes of ethics that are supposed to limit such gifts obviously don’t work. All perks should be banned, and doctors that accept them should be subject to potential loss of their license to practice.
Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including "Locked in the Cabinet," "Reason," "Supercapitalism," "Aftershock," and his latest e-book, "Beyond Outrage." His 'Marketplace' commentaries can be found on publicradio.com and iTunes.
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In the meanwhile, we recently changed to a different brand of vaccines, no doubt because they're cheaper. Of course the savings are not passed on to the clients. There has been an obvious increase in the number of patients experiencing vaccine reactions since then. Enough of an increase that there is now a memo on the doctor's desks. "We will carry the old vaccines for use ONLY on those patients who have had reactions. All other patients are to be given the new vaccines". I wonder which vaccines the doctors will be giving their own pets.
Did I mention that they're building a new $2M boarding kennel as I write this?
Finally, drugs are advertised at great cost because the advertising works, obviously. Otherwise there would be no point in spending that much money. Doc, maybe I need that stuff I saw on TV and the doctor is thinking, "Fine, I'll write this pain-in-my-ass the script and I can get out of here and hit the links while there's still time for a round".
Oh, but wait. Those are socialist enterprises so they must be bad. Anti-capitalist too. Just think of all the golf caddies, ad execs and hotel workers who might be out of work if we banned prescription drug advertising!
Public advertisements for prescription drugs may include mention of potential side-effects, but generally minimize them. When is the last time you saw a TV ad for a prescription drug which mentioned seizures, heart attacks, massive organ failure, or sudden death? Because there are prescription drugs advertised on TV that can and have caused those and much more. Your doctor may not be eager to tell you that--a 30 second TV spot certainly won't.
I don't know if this sort of quasi-bribery is legal, but it certainly should not be. Our President is not allowed to accept a gift of a value of greater than, I believe $75. Shouldn't the same standard apply to people who literally hold the lives of others in their hands.
The problem, as is mentioned, is that the people responsible are getting away with their crimes. This is the problem with thinking that corporations are people. The real people continue in their criminal ways unhindered.
The other thing would be to refuse to patent copycat replacements for expiring old patents.
As for criminal activity, I suspect that the reason so much is so little prosecuted is that the drug companies, like the mega banks, are too big to fail. And their campaign contributions make them too close, too tight to jail. All of which is quite astonishing considering the double cross they pulled on the Obama Admin during and after the health care tussle.
Ever feel like it's totally hopeless? The US government is owned and operated by the corporate world!
I do wish more people would take a pro-active approach and start rejecting this mindset. Sure, some drugs are life saving. But many cause worse problems than they were designed to correct!
The whole health care system needs a major overhaul. I say we "occupy" ourselves and start getting informed about making better choices, Big Pharma be damned!
Don't US doctors get paid enough already?
AND my "quarantined" or spam file is filled daily with invitations to chemically alter myself in so many ways with the likes of Viagra, Amphetemine (sp'?) and other mind-bending chemical toxins with their inevitable attached encyclopedic disclaimers.
And yet they ban Hemp products (almost a miracle gift plant from nature) and Marijuana as "Addictive". Well just take a glance at all the addicts hooked on pain-killers and other highly-touted mixes, led by Mush Limpballs, the ol' Latina whore-seeking mess of a being himself.
Hell, I can barely watch a Golf tournament any more because of it's relentless Cialis commercials in o-so-cute ly set "coupling" scenarios.
Yet I heard that ol' chinless wonder Bitch McConnel stand up and say with a straight face (in his response to the upholding of Obamacare, such as it is) that "We already have the best medical system in the world"!!!! The US Medical non-system is a kind of horrified joke in the rest of the THINKING world, where universal care prevails.
If further proof is needed, look at the new and apparently flourishing "Medical Tourism" industry.
What you said is so true! I swear half the young adults my step daughter's age seem to be on some anti-depressant or some other type of mood altering drug.
I guess that advertising does work. On the wallet if no place else, eh? ;-)
For instance, Pfizer just signed on to a huge UCLA study. If they don't do it, then nobody will, because nobody else will put up the money. They are obviously not doing it out of the goodness of their hearts, but at this point I don't really care who comes up with the funds. We can save the vision of over 75 million people with the current retinal research-- including small children who are going blind right now. Will Satan worshippers pay? Yay, sign me up for the ritual, if it'll make them come up with some cash!!
In other words "I give up, so be it"! I know you stated "This is certainly not the way it should be" but these are words of capitulation. We need to make the government see this for what it is, corporate blackmail for their benefit only, funded from their profit base, gleaned from false advertising and heavy marketing and heavy eventual tax breaks,
We are just the canaries in the coal mine, of no consequence to these designated "persons".
drugs and influence physicians to prescribe drugs that may not be needed. If we banned TV Ads, it, could help on all counts!
What's wrong with this picture, aside for advertising for something which cannot be purchased without a doctor's order? Why are we bombarded with ads telling us to make medical decisions and requests based on ads rather then medical expertise, and warning us in endless details about the risks of psychosis, suicide, bleeding, and death? Capped by the stern warning to "tell your doctor if" you have various medical conditions.
I remember when it used to be the physician who made the informed diagnoses and recommendations for medications, in consultation with patients. Now we're told what to request of the doctors, to tell the doc about our medical status (rather than the reverse), to request the drugs we see advertised, and to release the pharma companies of any damage since after all, the ads did warn us in the small print or rapid-talking disclaimers.... Something is wrong with this! Gone are the ads for hard liquor, now it's all about drugs, devices, and political messaging. Only in America do we 'enjoy' this perverted version of 'socialized medicine' by big-profit Pharma ads.
Then again, what fuels the broadcast media industry, if not endless ad dollars by big pharma, big oil/gas, and big politics?
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