Wednesday, July 11, 2012
Big Pharma Criminality and Fraud No Longer a Conspiracy Theory
- Bribing doctors
- Lying to the FDA
- Fabricating drug safety data
- Defrauding Medicare and Medicaid out of billions
- Deceiving regulators about the effectiveness of its drugs
Among the many doctors bribed by GlaxoSmithKline was Dr. Drew Pinsky, who received $275,000.00 to promote Glaxo’s anti-depressant drug, Wellbutrin. Also, sales reps in the U.S. were encouraged to mis-sell Glaxo’s antidepressants. Where is the accountability?
“On behalf of (Glaxo), I want to express our regret and reiterate that we have learnt from the mistakes that were made. When necessary, we have removed employees who have engaged in misconduct.” – Andrew Witty, CEO of GlaxoSmithKline “What we’re learning is that money doesn’t deter corporate malfeasance.” – Eliot Spitzer, former attorney general of New York “It is simply no longer possible to believe much of the clinical research that is published, or to rely on the judgment of trusted physicians or authoritative medical guidelines. I take no pleasure in this conclusion, which I reached slowly and reluctantly over my two decades as an editor of The New England Journal of Medicine.” – Marcia Angell, MD Similarly,
Bayer was caught shipping out Factor VIII hemophilia blood products that were knowingly infected with HIV and hepatitis C, to patients all over the country for over a decade. It is estimated that the resulting deaths from just those blood products number in the hundreds of thousands.
Government regulators are themselves corrupted from within. For instance, the former director of the CDC from 2002 through 2009, Dr. Julie Gerberding, landed a very lucrative job as president of the $5 billion vaccine division at Merck, one of the largest drug companies in the world. She was very likely cultivating a relationship with Merck all those years. The pharmaceutical industry has a giant “revolving door” through which corporations and government agencies frequently exchange key employees. And the bought-and-paid-for state run media is standing by to propagandize the masses about how great it is. “If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.” – Joseph Goebbels, Reich Minister of Propaganda, Nazi Germany Relevant news articles:
- Washington Post: GlaxoSmithKline to pay $3B in largest healthcare fraud settlement in US history
- New York Times: Glaxo Agrees to Pay $3 Billion in Fraud Settlement
- Time: Breaking Down GlaxoSmithKline’s Billion-Dollar Wrongdoing: What the drug company did to promote Paxil, Wellbutrin and Avandia illegally — and what it meant for patients
- Fox News: GlaxoSmithKline pleads guilty to health fraud
- CNN Money: GlaxoSmithKline in $3 billion fraud settlement
- The Huffington Post: Drug Company GlaxoSmithKline Puts American Values to Shame
- Natural News: GlaxoSmithKline pleads guilty to criminal fraud charges, pays massive $3 billion in fines
300 years of Andrew Witty? What to buy with $3 billion
GlaxoSmithKline, part of what used to be called ‘the ethical pharmaceutical industry’ back in the days when Boy Scouts wore short pants, was docked a record $3 billion in state and federal fines and in liabilities in the US for misdemeanours violations concerning the marketing of antidepressants and its diabetes drug, Avandia (scripintelligence.com, 3 July 2012).
GSK’s stock price rise in London of 22 pence on the day was a collective investor sigh of relief that the dmage was as low as $3 billion. This was half the amount GSK had predicted (£4 billion – $6 billion).
But the company surely would have much rather determined itself how the money was spent.
So, on the day the Higgs boson first poked its mass-defining nosy signal above the parapet of subatomic noise, Scrip would like to take you on a trip to some alternative universes, universes in which an innocent (or undetected) GSK gets, Sinatra-like, to spend $3 billion its way.
What then, in the words of the Finance Director, is the opportunity cost of being naughty and getting caught?
Without the fine, for instance, GSK might have paid out an extra 60 cents a share in dividends to shareholders.
Or it could have spent the money on R&D, adding 50% again to its annual innovation budget.
Ot it could cornerstone a hundred regional venture capital funds around the globe (but probably still mainly in New England and California) and really stoke up early stage life science companies.
It could have bought more or its own shares. In 2011, GSK spent £2.2 billion ($3.45 billion) on auto-cannibalism, buying its own shares. It will probably make similarly narcissistic purchases in 2012. With a market capitalisation of around $110 billion, each $1 billion in stock repurchase by GSK increases its earnings-per-share by nearly 1% without the company having to do anything to change its business in any tangible way. A $3 billion bonus would have boosted GSK EPS 2.7%.
On the other hand, GSK could have made an irresistible offer for HGS, $5.6 billion rather the paltry $2.6 billion it currently has on the table now, gathering dust (scripintelligence, com, 11 June 2012).
[Mind you, with no other bidders in sight, no rumours of bidders from any investments banks, and no statistically significant evidence that icicles are forming in Hades, GSK probably doesn’t have to rush that one.]
It could have bought 60% of the BioMarin Pharmaceuticals rare disease business, for which GSK is rumoured to be offering $5 billion (scripintelligence.com, 13 June 2012).
Or the company could keep Andrew Witty on his 2011 salary for close to 300 years, although that seems an excessive period without a raise, even for a man who seems happy enough with a mere $10.6 million compensation, well below the 2011 Big Pharma average of $16.3 million (scripintelligence.com, 30 March 2012).
Alternatively, in order to flatten the GSK organisational structure still further, and to extend the R&D analogy of ‘shots on goal’ to management circles, $3 billion would buy the company ten years with an expanded management team of 30 CEOs with salary-linked egos. Then GSK really would run like a collection of biotechs.
Of course, there are lots of alternative universes outside GSK. Spent on a global initiative to tackle neglected tropical diseases, for instance, $3 billion might stretch further. At the launch of just such an initiative in January (scripintelligence.com, 31 January 2012) into which the Gates Foundation had committed $383 million, Andrew Witty, speaking for 13 pharma firms involved said: “Many companies and organisations have worked for decades to fight these horrific diseases. But no one company or organisation can do it alone.”
Hmmn, Andrew. Hate to be picky, but $3000 million probably might just cover it. Oh, no! Forgot! You don’t have it any more. Silly tropical diseases will just have stay neglected a bit longer.
$3 billion is a lot of money in India, too. There it buys three years worth of government-procured drugs (scripintelligence.com, 25 June 2012).
Part of case against GSK involved allegations that the company promoted paediatric use of its Paxil and Wellbutrin antidepressants despite studies that had failed to show efficacy. $3 billion worth of hindsight later, what is clear is that the company had rightly identified an unmet medical need but then addressed it in the wrong way.
Depressed juveniles? Yufaxil? Nothanksil! Get a Playstation 3 bundle from Amazon costing $299,99. Need extended release? Try the top of the range Microsoft Xbox 360 250 Gb consoles with Kinect at around $380.$3 billion gets around 10 million of them.
This is just the sort of imaginative social comparator that health technology agencies need to think about.
Or, if you want to keep any preventative solution within the care sector, GSK’s fine equals around 200 year’s running the UK suicide prevention charity, the Samaritans (at £10 million a year) or, by extrapolation, 2 years pro rata support for suicide prevention across the entire 7 billion human population.
But wait. There’s another way. A better way! Spend some of money (not all of it, obviously, just most) on better lawyers, smarter certainly than the ones who lost this case.
There’s a lot of billable hours in $3 billion!