Pfizer's 13th Legal Settlement - Will it be Enough to End the Impunity?

It has been almost two months since we lasted noted misbehavior by giant global pharmaceutical firm Pfizer Inc. With little fanfare, however, a few small news items noted the corporation's latest legal settlements.

Deceptive Marketing of Protonix

The first settlement merited only a few paragraphs from Reuters.  The gist was:

Pfizer Inc will pay $55 million plus interest to settle charges that Wyeth promoted its acid reflux drug Protonix for unapproved uses and made unproven claims about the medicine, the U.S. Department of Justice said on Wednesday. 

The infractions took place between February 2000 and June 2001, long before the world's largest drugmaker acquired Wyeth in 2009 for $68 billion.

A report in the examiner explained that Wyeth did not merely go beyond the label in promoting Protonix, it went beyond the evidence.

Wyeth allegedly promoted Protonix as the 'best PPI for nighttime heartburn' even though there was never any clinical evidence that Protonix was more effective than any other PPI for nighttime heartburn. 

Furthermore, the charges were that systemic efforts to mislead were sanctioned by top management:

 The allegations in the complaint are that this superiority slogan was formulated at the highest levels of the company. Wyeth retained an outside market research firm, at the cost of tens of thousands of dollars, to ensure that sales representatives delivered that misleading superiority message.

Finally, the government asserted that Wyeth corrupted physicians' continuing medical education in the process:

Finally, the government alleges that Wyeth used continuing medical education (CME) programs to promote Protonix for unapproved uses. CME programs are sponsored by accredited independent providers, such as universities, nonprofit organizations, or specialty societies. Pharmaceutical companies are permitted to provide financial support for CME programs, but they are not permitted to use CME programs as promotional vehicles for off-label indications.

According to the complaint, Wyeth spent millions of dollars providing 'unrestricted educational grants' to CME providers, and these grants invariably included promises that Wyeth would not attempt to influence the content of the program in any way. Nevertheless, the government alleges that one of Wyeth’s core marketing tactics for Protonix was to use CME programs to drive off-label use of the drug. According to the complaint, the Protonix 'brand team' influenced virtually every aspect of these CME programs: program topics, speaker selection, organization, and content. In addition, the government alleges that Wyeth even insisted that the CME program materials use the same color and appearance as Protonix promotional materials–a tactic that Wyeth and the vendor called 'branducation.'

So it seemed that the company put on quite an effort to promote what we have called elsewhere pseudo-evidence based medicine, yet, like many other legal settlements involving large health care organizations, this one involved no penalties of any type against the people within the organization who authorized, directed, or implemented the bad behavior. 

 Misleading Marketing of Zyvox, Lyrica 

Another settlement, for a few dollars less, got even less attention.  Fox Business news did report this:

 Pfizer Inc. (PFE) agreed to pay a combined $42.9 million to North Carolina and 32 other states in a settlement of allegations that the drug maker used unfair and deceptive practices in the marketing of antibiotic Zyvox and nerve-pain medicine Lyrica.

I could find no detail about the sorts of deception allegedly involved in the news media.  What little more Fox provided did suggest that this case also involved pitching drugs in instances in which their use was unsupported by good evidence:

The states had alleged that Pfizer had marketed Zyvox as superior to another antibiotic in fighting certain types of infections, though there allegedly wasn't substantial evidence to support superior results for some uses that Pfizer claimed.

The states also alleged that Pfizer marketed Lyrica for some off-label, or unapproved, uses.

There was no hint that again any individual would suffer any negative consequences for this particular set of deceits either.

Avoiding Impunity as a Topic of Polite Discussion

We have discussed a seemingly endless parade of legal settlements by large health care organizations.  In almost none was there any consequence beyond a fine paid by the company, and sometimes a pledge that the company would thereafter behave better.  While these relatively small costs were diffused throughout the organizations, almost never did the people who authorized, directed, or implemented the bad behavior pay any price or suffer any penalty.  Thus we have opined again and again (e.g., most recently here) that these settlements have become just another cost of doing business, and have no power to deter future bad behavior.

In addition, we have noted not only have multiple organizations made such settlements, some organizations have settled again and again.  Yet even in the cases of these multiple organizational offenders, the individuals involved maintain their immunity from any negative consequences.  Thus these are examples of impunity.  

Transparency International declared 23 November, 2012, as the International Day to End Impunity, explained as follows:

At Transparency International we view impunity as getting away with bending the law, beating the system or escaping punishment. Impunity is anathema to the fight against corruption.

However, impunity is one of those concepts which never seems to be a subject of polite conversation in health care, or, as we say, it has become anechoic.  

Therefore, it is fascinating that while these two Pfizer settlements were announced almost simultaneously, each was discussed, such as it was, as if it occurred in a vacuum.  Moreover, it also seems that each settlement was crafted by law enforcers without any attention to the record of the company making the settlement.  Thus, any implications about impunity were avoided.

Pfizer's Multiple Ethical Opfenses

In fact, during the time we have been posting on Health Care Renewal, Pfizer has become one of the great repeat ethical offenders in the health care arena.  Its track record since the beginning of the 21st century, (with yello colored background below, compiled from this post), is remarkable.

In the beginning of the 21st century, according to the Philadelphia Inquirer, Pfizer made three major settlements,

October 2002: Pfizer and subsidiaries Warner-Lambert and Parke-Davis agreed to pay $49 million to settle allegations that the company fraudulently avoided paying fully rebates owed to the state and federal governments under the national Medicaid Rebate program for the cholesterol-lowering drug Lipitor.

May 2004: Pfizer agreed to pay $430 million to settle DOJ claims involving the off-label promotion of the epilepsy drug Neurontin by subsidiary Warner-Lambert. The promotions included flying doctors to lavish resorts and paying them hefty speakers' fees to tout the drug. The company said the activity took place years before it bought Warner-Lambert in 2000.

April 2007: Pfizer agreed to pay $34.7 million in fines to settle Department of Justice allegations that it improperly promoted the human growth hormone product Genotropin. The drugmaker's Pharmacia & Upjohn Co. subsidiary pleaded guilty to offering a kickback to a pharmacy-benefits manager to sell more of the drug.

Thereafter, Pfizer paid a $2.3 billion settlement in 2009 of civil and criminal allegations and a Pfizer subsidiary entered a guilty plea to charges it violated federal law regarding its marketing of Bextra (see post here).  Pfizer was involved in two other major cases from then to early 2010, including one in which a jury found the company guilty of violating the RICO (racketeer-influenced corrupt organization) statute (see post here).  The company was listed as one of the pharmaceutical "big four" companies in terms of defrauding the government (see post here).  Pfizer's Pharmacia subsidiary settled allegations that it inflated drugs costs paid by New York in early 2011 (see post here).   In March, 2011, a settlement was announced in a long-running class action case which involved allegations that another Pfizer subsidiary had exposed many people to asbestos (see this story in Bloomberg).  In October, 2011, Pfizer settled allegations that it illegally marketed bladder control drug Detrol (see this post). Finally, in August, 2012, Pfizer settled allegations that its subsidiaries bribed foreign (that is, with respect to the US) government officials, including government-employed doctors (see this post). 

By my count, the two current settlements would be numbers twelve and thirteen.  Of course, while I believe this list is accurate, it may be incomplete.

Since none of these posts involved any negative consequences for any individuals who authorized, directed, or implemented the bad behavior, or who profited from it, and none involved any changed in the leadership or organization of the company, this becomes an amazing record of the impunity of Pfizer leadership over time and space. 

Will Impunity Finally Lead to Outrage?

Impunity, though, is a concept that is beginning to command some attention.

The Brasilia Declaration which was published at the conclusion of the 15th International Anti-Corruption Conference (hosted by Transparency International) included:

it is clear we all face a common challenge in our work: impunity for those who abuse positions of power. 

If impunity is not stopped, we risk the dissolution of the very fabric of society and the rule of law, our trust in our politics and our hope for social justice.

Activists, businesspeople, politicians, public officials, journalists, academics, youth and citizens who gathered in Brasilia to discuss the threat of corruption made it clear that impunity undermines integrity everywhere.

Whether we are investing collective efforts and resources in fighting poverty, human rights violations, climate change or bailing out indebted economies, we need to give the people a reason to believe that impunity will be stopped.

While the two latest Pfizer settlements barely got media coverage, maybe a $1.9 billion dollar settlement in the US by international banking giant will get more attention.  The charges in this case were not merely deceiving some doctors and patients about drug efficacy and safety.  The company was accused of aiding money laundering by drug cartels, and facilitating rogue regimes get around international sanctions.  As the New York Times reported,

State and federal authorities decided against indicting HSBC in a money-laundering case over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system.

Instead, HSBC announced on Tuesday that it had agreed to a record $1.92 billion settlement with authorities. The bank, which is based in Britain, faces accusations that it transferred billions of dollars for nations like Iran and enabled Mexican drug cartels to move money illegally through its American subsidiaries.

Unlike Pfizer's slow-motion impunity, this example got attention.  The Los Angeles Times noted,

The massive penalty still was not enough to appease some critics. No bank executives were charged as part of the investigation, leading some analysts to question the government's willingness to hold powerful Wall Street firms accountable.

'It's mind-boggling how they think you can have a financial system and allow this kind of impunity,' said William Black, a former banking regulator who aided federal prosecutors during the savings and loan crisis of the 1980s and 1990s. HSBC 'put the world at enormous risk.'

A NY Times editorial opened,

It is a dark day for the rule of law.   Federal and state authorities have not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system.  They have also not charged any top HSBC banker in the case, though it boggles the mind that a bank could launder money as HSBC did without anyone in a position of authority making culpable decisions.

Clearly, the government has bought into the notion that too big to fail is too big to jail.  When prosecutors choose not to prosecute to the full extent of the law in a case as egregious as this, the law itself is diminished.  The deterrence that comes from the threat of criminal prosecution is weakened, if not lost.

So maybe this huge financial case will prove to be the straw that breaks impunity's back.  So I will close by quoting the end of the Brasilia Declaration, in the hope that a few people will take it to heart in the context of health care, as well as in finance.

To take this important struggle forward the international anti-corruption community should promote greater people engagement and find ways to provide greater security for anti-corruption activists.

Reducing impunity also requires independent and well-resourced judiciaries that are accountable to the people they serve.

We call on leaders everywhere to embrace not only transparency in public life but a culture of transparency leading to a participatory society in which leaders are accountable.

We call on the anti-corruption movement to support and protect the activists, whistleblowers and journalists who speak out against corruption, often at great risk.

It is up to all of us in government, business and society to embrace transparency so that it ensures full participation of all people, bringing us together to send a clear message: We are watching those who act with impunity and we will not let them get away with it.