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Posts Tagged ‘fraud’

CNN has a very unnerving report about some crazy loophole, government meets private sector dealings.

First, doctors as PR people:

Internal company documents show that Pfizer and Pharmacia (which Pfizer later bought) used a multimillion-dollar medical education budget to pay hundreds of doctors as speakers and consultants to tout Bextra.

Pfizer said in court that “the company’s intent was pure”: to foster a legal exchange of scientific information among doctors.

But an internal marketing plan called for training physicians “to serve as public relations spokespeople.”

According to Lewis Morris, chief counsel to the inspector general at the U.S. Department of Health and Human Services, “They pushed the envelope so far past any reasonable interpretation of the law that it’s simply outrageous.”

Pfizer’s chief compliance officer, Doug Lanker, said that “in a large sales force, successful sales techniques spread quickly,” but that top Pfizer executives were not aware of the “significant mis-promotion issue with Bextra” until federal prosecutors began to show them the evidence.

By April 2005, when Bextra was taken off the market, more than half of its $1.7 billion in profits had come from prescriptions written for uses the FDA had rejected.

Second, fake companies to get through legal issues:

“We have to ask whether by excluding the company [from Medicare and Medicaid], are we harming our patients,” said Lewis Morris of the Department of Health and Human Services.

So Pfizer and the feds cut a deal. Instead of charging Pfizer with a crime, prosecutors would charge a Pfizer subsidiary, Pharmacia & Upjohn Co. Inc.

A couple of thoughts.

If the federal government ever wonders again why the public doesn’t trust them/listen to them the officials need to review this situation.  It’s just crazy that the bailouts of all these financial entities went against major popular opinion and really didn’t end up solving problems (I know, that’s debatable…).   In the aftermath the government came out and said how tough they were going to be with people that abuse taxpayers.   So, now in this case….

“If we prosecute Pfizer, they get excluded,” said Mike Loucks, the federal prosecutor who oversaw the investigation. “A lot of the people who work for the company who haven’t engaged in criminal activity would get hurt.”

Did the punishment fit the crime? Pfizer says yes.

It paid nearly $1.2 billion in a criminal fine for Bextra, the largest fine the federal government has ever collected.

It paid a billion dollars more to settle a batch of civil suits — although it denied wrongdoing — on allegations that it illegally promoted 12 other drugs.

In all, Pfizer lost the equivalent of three months’ profit.

It maintained its ability to do business with the federal government.

The Obama administration should take a stand on this because all the new health care reform is likely to stimulate more of this type of activity – strange dealings with the government.   This situation is exactly why I want either a completely private health care system OR universal one.  This hybrid system is just terrible.  We’ll see more of this as long as their are big government programs that use private companies with profit incentives.   I don’t think it’s bad to profit driven, I just think it’s dangerous when it’s the government handling the relationship, and not the customers.

And maybe the fed prosecutor was right in that a lot of people will get hurt for holding Pfizer accountable… but I just don’t see how that’s a justification for letting them off the hook.   Ends don’t justify the means and all that.

And this is the zinger:

“I worry that the money is so great,” he [Loucks] said, that dealing with the Department of Justice may be “just of a cost of doing business.”

Oh, I’m sure that’s already true.

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