Tip of the Iceberg
February 1, 2013 | Permalink
A post to summarize recent news on the behavior of major pharmaceutical corporations, noting first that fines in the billions—the result of successful federal, state, and whistleblower prosecutions–have no effect:
- They have not changed their behavior
- Fines and prosecutions have not damaged revenues or profits (even GlaxoSmithKline’s $3 billion fine last July after a criminal finding or Abbott Labs’ $1.5 billion last May)
- Fines have not diminished monopolization (667 mergers and acquisitions using their billions in available cash, acquisitions for which they paid an average premium—over market price—of 38 percent).
My experience, which I expect falls upon what is widespread, is that marketing employees (who are the only ones we are ever likely to meet) of the giant pharmaceuticals companies do not like to admit who they work for. If they proudly, defensively announce that they do work for them they will deny the above three realities. Their companies routinely provide employees with short, easily memorized bits of number fraud to be used in denial since their near-oil-corporation level of profits is so often brought up.
Here are some recent news reports and information FYI:
Old Folks Fall: We have heard and accepted that “old people have lots of falls,” but a recent study in the Archives of Internal Medicine shows that 43 percent of hips fractures and falls are related to their prescribed blood pressure control drugs. Public health counseling and support should not be beneath a doctor’s dignity (Don’t smoke, eat a healthy diet especially control the salt, maintain a healthy weight, get daily moderate exercise, really limited the alcohol, and maybe a diuretic if prescribed). However, a quick consult, glance at the lab report, and a script for Cozaar, Lopressor, or Tekturna is preferred. And then there is the profitable hip replacement surgery.
Lobbying in the Senate Lobby: All news outlets covered Russ Feingold’s allegation that fellow Democrat Max Baucus (Chair of the Senate Finance Committee) as well as Republican committee member Orrin Hatch (Utah) and Senate Minority Leader Mitch McConnell allowed a staff-arranged “give away” to Amgen. The Senate committee delayed mandated price controls on Kidney dialysis drugs for which Amgen holds the patents. Millions are involved. Amgen has hired Senate staffers to lobby present staffers (some former Amgen employees). NY Times February 1, 2013 gives us Feingold calling it “a perfect example of the kind of corruption that permeates our government and cripples public trust . . . . a textbook case of a corporations . . . buying policy,”
Online Piracy: While many use and praise online access to their medical records, JAMA has published a story showing that the online users have more hospitalization than those who hear the results and explanation from their doctors (or do not). Perhaps this is related to the financial success of the health insurance industry and the corporate for-profit hospitals (See Subsidizing Bad Behavior ) who feature this online access. What do you think? Or don’t you like thinking about how a good becomes a bad?
FTC Chair Resigns: Reuters on January 31, 2013 reported the resignation of Jon Leibowitz, chairman of the Federal Trade Commission. He has led the agency since 2009 and none of the proposed replacements will pursue the brand name pharmaceutical companies who engaged in so-called “pay for delay” with generic drug makers. Leibowitz determined that between 2005 and 2011 127 deals, payoff to delay generics of the giants marque drugs cost the government 3.5 billion annually. The FTC has had only mixed success with prosecutions. The Supreme Court will soon decide whether Solvay Pharmaceuticals Inc., now owned by Abbott Laboratories, acted illegally when it paid three companies not to manufacture of generic versions of AndroGel. The expected focus of the new FTC Chair will be on consumer privacy, a comparatively lame topic. For this Leibowitz let Google go with a wrist slap, even a less useful gesture than wrist-slapping hardened criminals like Johnson & Johnson and Pfizer who manufacture necessary medicines. However, I expect some do die because Google’s web search practices are used to flog (advertise, stimulate) impulse drug demand?
Niche Markets: Astonishing piece of business press in NY Times January 31 on “orphan drugs,” developed and approved for a small and carefully cultivated clientele numbering a few thousand. NPS, a small pharmaceutical, has Gattex and insulin-like drug (rDNA) for Short Bowel Syndrome. It is expected to bring in millions in profits (paid by tax and foundation dollars). It costs about $300,000/year. The carry-over page title was “Turning a Catchphrase into a Business Imperative.” The catchphrase they meant was not “Niche Market,” but “Every Patient Counts.”
Disease Mongering: The British Medical Journal assembles some considerable evidence that routine cancer screening and heart scanning do not reduce patient risk of dying from either. There were 184,000 participants in 13 studies. There was an uptick in overall diagnoses and expensive drug treatment for high blood pressure but no link to any reduction in mortality or risk of cancer or heart disease. But then there is disease mongering, always profitable.
Smoke Ventilation: The CDC has found that ventilation in five major airports with “smoking rooms” (Atlanta, DC, Denver, SLC and Las Vegas) is inadequate to protect non-smokers.
Pay for Delay? Antitrust complaints and suits are underway against widespread so-called “pay for delay” behavior in which pharmaceutical firms (Johnson & Johnson, Novartis) collude with each other and pay third parties big bucks not to continue their development of specific generic drugs.
Studies Underway: Blood thinners Pradaxa and Xarelto were approved in 2010 and 2011, Pfizer and Bristol-Myers Squibb are awaiting approval in the U.S. (already secured in Europe). Approval is expected in March. These are multi-billion dollar drugs. Studies of fatal bleeding caused by these drugs are underway. All were created to replace at great expense the standard anti-clotting therapy, Warfarin, needed by those subject to strokes and systemic embolisms.
Problem Ahead: Top pharmaceutical companies are considered too big to outlaw. Outlawing these outlaws would by law prevent Medicare and Medicaid from paying for unique, essential drugs to which the outlaws hold the patents. The federal government has not been successful at prosecuting responsible senior executives. Most telling and problematic, the pharmaceutical industry conducts extensive, broad “lobbying” at the state level where concerted “lobbying” is notoriously effective. Many states, including some with the highest prescription drug expenditures, have yet to successfully pursue any investigations on their own. Those would be states where state governments have been most corrupted by bribery, campaign contributions, lobbyist wiles and scientific and political backwardness.
Major Studies from Public Citizen
In 2010 the Public Citizen’s Health Research Group (Authors: Sammy Almashat, M.D., M.P.H, Charles Preston, M.D., M.P.H, Timothy Waterman, B.S., Sidney Wolfe, M.D.) published an extensive study available here:
- Of the 165 settlements comprising $19.8 billion in penalties during this 20-year interval, 73 percent of the settlements (121) and 75 percent of the penalties ($14.8 billion) have occurred in just the past five years (2006-2010).
- Four companies (GlaxoSmithKline, Pfizer, Eli Lilly, and Schering-Plough) accounted for more than half (53 percent or $10.5 billion) of all financial penalties imposed over the past two decades. These leading violators were among the world’s largest pharmaceutical companies.
- The pharmaceutical industry now tops not only the defense industry (the former leader), but all other industries in the total amount of fraud payments for actions against the federal government under the False Claims Act.
- The practice of illegal off-label promotion of pharmaceuticals has been responsible for the largest amount of financial penalties levied by the federal government over the past 20 years. This practice can be prosecuted as a criminal offense because of the potential for serious adverse health effects in patients from such activities.
- Deliberately overcharging state health programs, mainly Medicaid fraud, has been the most common violation against state governments and is responsible for the largest amount of financial penalties levied by these governments
- Former pharmaceutical company employees and other “whistleblowers” have been instrumental in bringing to light the most egregious violations and have been responsible for initiating the largest number of federal settlements over the past 10 years. From 2001 through 2010, they comprised 67 percent of total payouts.
Bringing it up to date the same group found a total of 74 additional settlements, totaling $10.2 billion in financial penalties reached between the federal and state governments and pharmaceutical manufacturers between November 2, 2010 and July 18, 2012. As in the previous study, overcharging government health insurance programs–mainly drug pricing fraud against state Medicaid programs–was the most common violation while the unlawful promotion of drugs gathered the largest penalties.
Pharmaceutical Profits as & of Revenues Top Companies