Gottlieb’s entire career has centered on loosening regulatory restrictions to enable industry to thrive. At the core of his philosophy is the view that with fewer restrictions the force of unbridled capitalism will unleash a torrent of industry innovation. In this view negative consequences, should they occur, will be quickly addressed by an efficient marketplace.
Should we trust pharmaceutical companies to innovate in such a light-touch regulatory climate? On Health Care Renewal we have noted ethical violations by most of the major pharmaceutical companies, often involving deception in marketing, manipulation and suppression of clinical research, and distortions of dissemination of medical information, such as articles ghost-written by authors paid by industry. We have documented numerous legal settlements of cases arising out of such misbehavior.
It is no surprise that more legal settlements have marched into view during the last few months to add weight to concerns about making regulation of the pharmaceutical industry more lax. To summarize them, in chronological order...
Celgene Settled Allegations it Deceptively Marketed Thalidomid and Revlimid for $280 Million
Per the New York Times, July 25, 2017:
The pharmaceutical company Celgene has agreed to pay $280 million to settle claims that it marketed the cancer drugs Thalomid and Revlimid for unapproved uses, the company said on Tuesday.
Under the terms of the settlement, which resulted from a lawsuit filed by a whistle-blower — a former sales representative at Celgene — the company will pay $259.3 million to the United States and $20.7 million to 28 states and the District of Columbia.
In particular, years before the company got approval to market its drug Thalidomid (generic name: thalidomide, the same drug that caused severe birth defects when marketed in Europe in the 1950s)
sales of Thalomid quickly took off, in part because — as [whistle blower] Ms. Brown claimed in her complaint — Celgene 'flooded the country' with sales representatives who were under heavy pressure to pitch the drug to oncologists for a variety of cancers. The F.D.A. sent Celgene two warning letters, in 1998 and 2000, claiming the company had been marketing the drug to treat cancer. In 2000, one Wall Street analyst estimated that 90 percent of Thalomid’s sales were to treat cancer, according to Ms. Brown’s complaint.
However, the drug was not approved for use in cancer until 2006. Also,
in 2005, the company received approval to sell Revlimid for a rare cancer, and Ms. Brown’s complaint claims that the company — as it had with Thalomid — marketed it to treat a broader range of cancers. It also pressured doctors to switch Thalomid patients to Revlimid, which is more expensive.
Ms. Brown’s complaint also claimed that Celgene’s inappropriate marketing of Thalomid exposed patients to heightened risks that included potentially fatal blood clots and other side effects. Those risks were added to the drug’s warning label only after it received the approval for cancer treatment, Mr. Guttman said.
Thus the company's actions may well have harmed patients.
We previously discussed, most recently in 2010, the immense price Celgene charged for Thalidomid, despite the fact that this compound, developed about 60 years ago, is available for pennies in many countries.
Nonetheless, and also despite the amount of money that Celgene was making selling its drugs for unapproved uses (e.g., Revlimid's sales last year were nearly $7 billion), the US Department of Justice declined to get involved in this case. Also, like most legal settlements involving big health care organizations, the company did not admit any wrongdoing, and no person who enabled, approved, or directed the misbehavior suffered any negative consequences.
Insys Settled Allegations of Promotion of Narcotics for Unapproved Uses for $4.5 Million to Illinois
Per the Chicago Tribune, August 18, 2017:
An Arizona drug company has agreed to pay Illinois $4.45 million to settle allegations that it deceptively marketed and sold a prescription opioid drug for uses not approved by the U.S. Food and Drug Administration.
Insys' actions may well have contributed to the current opioid epidemic.
The company heavily marketed the drug to Illinois doctors with records of prescribing high volumes of opioids regardless of whether those doctors were prescribing opioids to treat cancer pain, the state alleged.
In particular,
According to Madigan's office, the top prescriber of Subsys in Illinois was Dr. Paul Madison, who wrote about 58 percent of all prescriptions for the drug in the state despite treating few, if any, cancer patients. Madison, an anesthesiologist and former owner of the Watertower Surgicenter on North Michigan Avenue in Chicago, was indicted in 2012 by the U.S. attorney's office in Chicago for billing insurers for procedures he didn't perform, and his medical license was suspended in November, according to Madigan's office.
We previously discussed Insys' stealth public relations campaign against medical marijuana here.
However, as in the previous case, the US DOJ was not involved, the company did not admit wrongdoing, and no individual involved in the misbehavior paid any penalty.
Novo Nordisk Settled Allegations it Minimized Risks of Victoza for Nearly $58.7 Million
Per Reuters, September 5, 2017:
Novo Nordisk will pay nearly $58.7 million to resolve claims the drugmaker’s sales staff downplayed the importance of U.S. Food and Drug Administration-mandated warnings about the cancer risks of its diabetes medication Victoza.
The U.S. Justice Department said Tuesday’s settlement would resolve claims Novo Nordisk supplied its sales representatives with information to give to doctors that created the false or misleading impression that warnings were wrong or unimportant.
In particular,
The lawsuit said that program required Novo Nordisk to provide doctors information about the potential risk of a rare form of cancer associated with the drug, which gained FDA approval in 2010.Thus, again this company's actions appeared to pose a risk to patients.
Victoza’s FDA-approved labeling also contained a boxed warning related to that form of thyroid cancer, the lawsuit said.
Novo Nordisk’s sales force employed messages and tactics that created a false or misleading impression with doctors regarding the cancer risks, leading some physicians to be unaware of them, the lawsuit said.
This company also has a track record of ethical misadventures. In 2011, we discussed several previous settlements by Novo Nordisk. Nonetheless, the US DOJ decided not to be involved in this litigation, which, as in the other cases above, did not result in admission of wrongdoing, nor any penalities for individual involved in the misbehavior.
Novelion Subsidiary Aegerion Pleaded Guilty, Fined $40 Million for Misbranding Juxtapid by Minimizing its Adverse Effects
Per Reuters, September 22, 2017:
Aegerion Pharmaceuticals Inc will plead guilty to two misdemeanors and pay $40.1 million to resolve investigations into its marketing and sales of an expensive cholesterol drug, U.S. authorities said on Friday.
The settlements will resolve long-running investigations into Aegerion, a subsidiary of Canada’s Novelion Therapeutics Inc, by the U.S. Justice Department and the U.S. Securities and Exchange Commission related to its drug Juxtapid.
In particular,
Prosecutors said after the U.S. Food and Drug Administration in 2012 approved Juxtapid for treating a rare genetic condition that causes high cholesterol, Aegerion promoted it for patients who had not been diagnosed with the condition.Thus, once more, the company's actions appeared to result in patient harm.
Juxtapid, which cost $250,000 to $300,000 annually per patient, featured a black box warning on its label that it could cause serious liver and stomach problems, prosecutors said.
Sales representatives also were trained to tell doctors and patients that Juxtapid would 'take patients out of harm’s way' and prevent 'impending' heart attacks and strokes, despite the lack of data supporting those claims, prosecutors alleged.
Numerous patients discontinued using Juxtapid after suffering conditions including liver toxicity and gastrointestinal distress, prosecutors said.
The company also signed a deferred prosecution agreement. By pleading guilty, it admitted the misbehavior in this case. However, again no individual involved in the misbehavior faced any penalties, despite the severe nature of the adverse effects the company deceptively minimized.
AmeriSourceBergen Settled For $260 Million Allegations of Illegally Selling Repackaged, Perhaps Adulterated Drugs so as to Avoid FDA Regulation
Per Modern Healthcare, September 27, 2017:
AmerisourceBergen Specialty Group, a wholly-owned subsidiary of the major wholesale drug distributor AmerisourceBergen Corp., pled guilty to illegally distributing misbranded drugs and agreed to pay $260 million to resolve criminal liability for skirting regulatory oversight.Given the problems with sterility, again the company's actions possibly could have harmed patients.
Between 2001 and 2014, according to court records unsealed Wednesday, the group's now-defunct subsidiary Medical Initiatives prepared millions of syringes that had been filled with cancer drugs and shipped them to providers in all 50 states.
Medical Initiatives removed the drugs from their original glass vials and repackaged them into plastic syringes in an unclean and unsterile environment, allowing the company to sell excess drug product in the vials known as 'overfill,' according to court records. It combined the contents of multiple vials in a process known as 'pooling,' despite many of the vials carrying a 'single-use' designation.
In order to avoid the Food and Drug Administration's regulatory oversight, AmerisourceBergen Specialty Group did not register Medical Initiatives as a repackager or manufacturer with the agency, records show. Instead, the group portrayed Medical Initiatives as a state-regulated pharmacy, exploiting an exemption to the FDA registration requirement that is reserved for legitimate pharmacies, not for manufacturers or repackagers, authorities said.
However, yet again, this settlement did again involve a guilty plea, but again no individual involved in the repackaging and adulteration suffered any negative consequences.
Discussion
All the cases discussed above were of behavior that could have harmed patients. Many of the companies involved had records of previous ethical misadventures. While a few cases resulted in corporate guilty pleas (to misdemeanors), none resulted in monetary penalties that would have much impact on the companies' finances, and none resulted in any negative consequences for people who enabled, authorized, directed or implemented the bad behavior.
These, just the latest in the march of legal settlements by large health care organizations, again demonstrate how often and how seriously pharmaceutical companies (and other organizations) may misbehave, and how the leaders of these organizations exhibit continued impunity, never having any legal accountability for their organizations' actions. These settlements again demonstrate the relatively light touch US regulators, including the FDA and DOJ, have exhibited when dealing with these organizations.
So what could happen if that touch is lightened still more, particularly by the ongoing initiatives of the current US FDA leader? I submit the results will be higher drug prices, more use of minimally effective and/or seriously risky drugs, and larger compensation for top managers of pharmaceutical companies. Will the public actually also get access to "life saving" drugs? Perhaps, but most of the offerings of drug companies in the last years have had minimal efficacy, and rarely have been proven to extend life.
Why is Dr Gottlieb pursuing these initiatives? Is he a true believer in market fundamentalism, perhaps untrammeled by lack of evidence supporting it?
Maybe he as he become intoxicated by all the money he previously made from the pharmaceutical industry. Prior to his approval by the Senate, his extensive financial dealings with the pharmaceutical industry were detailed by the New York Times, and Stat News, among others. The NYT article said:
The nominee, Dr. Scott Gottlieb, has spent the bulk of his career working in the drug and health care industry, which experts say raises the potential for myriad conflicts of interest. If confirmed to head the F.D.A., he would wield considerable power over companies and investment firms that have paid him millions of dollars over the years. From 2013 to 2015, for example, Dr. Gottlieb received more than $150,000 to advise Vertex Pharmaceuticals, a company whose two approved drugs are seen as breakthrough treatments for cystic fibrosis but carry list prices of more than $250,000 a year. He’s the acting chief executive of Cell Biotherapy, an early-stage cancer biotech firm that he helped found. He has served for years as a consultant to pharmaceutical giants like GlaxoSmithKline and Bristol-Myers Squibb and is paid by other companies for his expertise.So Dr Gottlieb's move to the FDA was yet another example of the revolving door pheonomenon.
The Stat article concluded,
It also reflects the normalization of conflicts of interest in medicine, which has been debated in the pages of the New England Journal of Medicine and in the Lown Institute blog.
Gottlieb has criticized government efforts to shed light on conflicts of interest, such as the Physician Sunshine Act, as 'federal tinkering' leading to “the demise of American medicine.” We believe his confirmation will lead to the demise of some FDA rules that are already barely keeping a lid on useless or dangerous medical products.
That may not be so far in the future, if Husten's concerns mentioned at the top of this post are true. And when conflicts of interest start having such real world effects, they cease to be merely conflicts of interest, but become corruption.
We have long been railing against conflicts of interest and corruption. Until recently we noted only some conflicts of interest affecting US government leaders, most often in the form of the revolving door. Most of the conflicts we discussed involved health care professionals and leaders of health care organizations.
So we used to write things like this (in July, 2016):
True health care reform would first make transparent the web of institutional and individual conflicts of interest that seems to tie together nearly all big health care organizations, and open discussion of how to make health care organizations better serve health care rather than the narrow financial interest of their top leaders.
Or this (in June, 2016):
True health care reform would first expose these conflicts, then reduce or better yet, eliminate them, and make health care more about helping patients and less about making money by marketing commercial products.
However, since the last presidential campaign, more and more conflicts of interest and apparent examples of corruption involving President Trump, his family, and his ongoing business interests have appeared, so that at this time the Trump regime seems to be riddled with conflicts of interest and corruption (for example, see these lists compiled by the Sunlight Foundation and Newsweek). Conflicts of interest and corruption involving the highest levels of US government have even more potential to damage patients' and the public's health than those involving, say, physicians or hospital CEOs.
So we now must say that true health care reform in the US first requires vast reduction in the conflicts of interest and corruption of the leaders of US government.
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