10 years ago today: Scientific misconduct payouts: Boots Nov 1997, Merck Nov 2007On 7 November 1997 it was reported that Knoll Pharmaceutical Co. agreed to pay at least $98 million to settle dozens of lawsuits charging that the company cheated consumers by suppressing publication of a study on one of its drugs. The story related to research performed 7 years ago by Betty Dong's group at the University of California, San Francisco.
Exactly ten years later this week, Merck has reached a $4.85 Billion settlement in 27,000 suits covering about 47,000 plaintiffs, three years after withdrawing Vioxx from the market.
In 1990, Dong, a researcher at UCSF was funded by Boots to carry out research on a widely use thyroid treatment (Synthroid). She discovered the Boots drug was no more effective than three much cheaper competitors. When she tried to publish, Boots threatened to sue. The publication was withdrawn. She received no institutional support. Company executives attempted successfully to publish an inaccurate version of the findings while excluding Dong and threatening legal action. Nine years later the sordid details were exposed in the press and Dong’s paper was published. The company paid around $170 million to "settle" class action lawsuits.
Both these settlements were "good" for the companies concerned and "good" for lawyers. In the case of the Dong affair, it is estimated that the company made a profit of $3billion in inflated costs during the nine year delay. They paid out less than $200 million in compensation. No company executives were prosecuted. The regulators turned a blind eye. In the case of Vioxx, the company has escaped serious sanction for the systematic misleading of patients/doctors and disobeying the rules of science leading to tens of thousands of excess deaths.
April 1996: How a Drug Firm Paid for University Study, Then Undermined It," WSJ, 25 April 1996
July 1996: ""A cautionary tale" Science: 273. pp. 411
Nov 1997: Rennie D, "Thyroid storm" JAMA, Apr 1997; 277: 1238 - 1243
Nov 1997: Kaiser, Jocelyn. "Firm Pays Dearly for Suppressed Study", Science 278 (7 Nov 1997)
Nov 2007: Pharmalot: Law Prof On Vioxx Deal: A Good Gamble For Merck
Merck research excoriated by the Lancet
Vioxx and a quacking duck
Crime and Punishment: Enough for Corporate Wrongdoing?
Corporate crime should not be a new concept to many. However, it has evolved into more troubling ways- not only in regards to its severity, but the methods of deterrence now being implemented against corporations. So it may be becoming progressively worse for U.S. citizens as a result.
Rather than speak of all corporations, what will be discussed is government health care fraud. Fraud basically is deception with the potential to harm others. In the case of pharma companies, this may include improper promotion and marketing, meaning that such tactics are or may be deceptive misconduct that may be illegal. In addition, there are the crimes of kickbacks and lesser crimes of misbranding products. Probably more methods of wrongdoing as well do in fact exist and happen. Yet the point is that drug companies should not engage in such wrongdoing to enrich their faceless existence with profiting off those who are ill in illegal ways.
How is such conduct discovered? Typically by whistleblowers who worked for the described pharma company, and such people are rare for a number of reasons. The whistleblower then seeks legal agents and files what is called a qui tam false claims act with a district attorney’s office (Boston or Philadelphia, if you want prosecutors to take you seriously). After the case is filed, the whistleblower verbally acknowledges the charges and evidence to the chosen prosecutors and others.
Such cases usually take years for unclear reasons, yet in the past two years, the settlements from such cases has approached 2 billion dollars after investigations ended that took years, which is tax dollars returned to the American public with these settlements.
So, what has been happening once a pharma company is busted. Criminal indictment by the district prosecutor? Hardly, yet appropriate. Usually, the prosecutor’s objective is to dismiss the case, but give the impression that such activities will not be tolerated by our government. So Corporate Integrity Agreements are mandated to the pharma company, but not really taken seriously, as some have more than one of these agreements active still. It’s an invisible ankle bracelet. A pharma company can and have committed equal or worse crimes while under such an agreement. This Agreement is issued after the deferred or non prosecution agreement is sentenced to the law-breaking corporation, which basically is a pre-trial diversion. Essentialy, it’s just parole, which is supported by the DOJ and the administration. The criminals admit wrongdoing, but not guilt. And they pay a settlement in the neighborhood of hundreds of millions of dollars. Not that shocking, if you consider the income of big pharma companies. These agreements are relatively new and partially a result of suggestions from what was known as a Thompson memo, which basically was created by a DOJ guy as commandments for prosecuting corporations and variables to consider when doing so, which ultimately offered responses as to why a greater degree of punishment was not enforced.
We are one of three countries in the world with the most prisoners behind bars, yet those that do similar if not greater harm to others get out of jail free. Double standard, I would say. Is this behavior by our legal system towards corporations an effective deterrent? Most think not. It rather seems like tacit approval of their conduct. And health care fraud may be more damaging than other types in other industries, yet lack of regulation allows such crimes to continue.
Citizens should make the laws in our country. Justice would then finally exist. Utopic concept, yet possible.
“Corporations cannot commit treason, nor be outlawed, nor excommunicated, for they have no souls.”
---- Edward Coke
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