Friday, December 06, 2013

How Many Straws? - Johnson and Johnson Settles Again, Again, Again...

It seems like a minor case, but is another straw for the camel.

The Latest Settlement

Reported in most detail by Modern Healthcare,

Two executives at a subsidiary of Johnson & Johnson have agreed to pay a total of $50,000 to resolve allegations that they knowingly sold mislabeled products used in the sterilization of gastrointestinal scopes and surgical drills.  The settlement also calls for the J&J subsidiary, Advanced Sterilization Products, to pay $1.25 million to resolve a civil complaint filed by the Food and Drug Administration. ASP President Bernard Zovighian will pay $30,000, while Richard Alberti, quality and compliance vice president, will pay $20,000. None admitted wrongdoing.

'ASP's actions violated the law and put patients at unnecessary risk for infection,' Steve Silberman, director of compliance at the FDA Center for Devices and Radiological Health, said in a statement.

Last year, ASP announced two recalls affecting a product called the Cyclesure 24 Biological Indicator, which is used to make sure that medical equipment sterilized using ASP's Sterrad low-temperature cleaning machines is free of bacteria, fungi and viruses.

FDA inspectors, according to a civil complaint last July, uncovered evidence that the company sold the Cyclesure 24 tests with 15-month expiration dates even though ASP's internal studies had not established the product's safe shelf life was that long.

After the issue was discovered, ASP shortened the shelf life of the Cyclesure indicators to six months. The company also recalled all lots of the products manufactured between February 2008 and December 2011.

Dirty endoscopes used during colon cancer screenings, for example, have been implicated in the transmission of hepatitis C and many types of bacteria, according to ASP's own website. 
Note that this case involves not just legal technicalities, but failures of disclosure that could have put real patients at risk of significant harm.

The Context

This case comes only one week after we discussed a huge ($2.5 billion) settlement by Johnson and Johnson of allegations that it withheld data about major safety problems affecting metal-on-metal hip prostheses, and two smaller settlements of allegations that it withheld safety data about the drug Topamax.

It is noteworthy that in this much smaller current settlement, two admittedly relatively low-level executives had to pay fines amounting to 4% of what the company had to pay. This is unusual.  Usually corporate executives escape any negative consequences, even in cases involving large amounts of money or possible harm to many patients.  If last week's settlement were to have imposed proportionate fines on executives, those fines would have totaled $100 million

The latest settlement does seem to follow the usual pattern: relatively small time individual offenders pay a penalty, while very rich and powerful individual offenders avoid all penalties. (For example, look here to see how one US prosecutor handled the case of Aaron Swartz versus the cases of misdeeds by big corporations)   Impunity by rich and powerful leaders of big organizations, and failure to enforce laws broken by such people is a very old story in American history, but that pattern was interrupted briefly after the great depression through the 1970s.  Now impunity for the rich and powerful is back, and maybe that is why 43% of the American population think our health care system is corrupt (look here).

Of course, the current settlement involved no admissions of wrongdoing.  Like most legal actions against big health care organizations, it is thus paradoxical.  Fines are paid, but at least on paper, not because of any wrongdoing.  So what were the penalties for?  Who knows?  But allowing a settlement without an admission of wrongdoing allows the next settlement to be made as if it were dealing with an isolated problem. 

As we mentioned in our last post on Johnson and Johnson, the latest settlement should be added to an increasingly  long list of the company's legal woes, often involving allegations and evidence of other unethical actions, sometimes involving guilty pleas to charges of such actions (see compilation of the record through July, 2013 here.)  Yet each settlement or action seems to take place in a vacuum, with no attention to what appears to be the company's record of ethical recidivism.  Of course, since nearly every action eschewed admissions of wrongdoing, on paper, there was no legal record of recidivism.  The whole situation is becoming so absurd that Jon Stewart on the Daily Show parodied the ability of Johnson and Johnson, and other big corporations, to escape any meaningful negative consequences of their actions.

As quoted on the Wrap

'Holy sh**t. They knowingly bribed doctors to give useless drugs to old people, the disabled and babies,' a stunned Stewart said. 'You’re not even allowed to do that in ‘Grand Theft Auto.''

When these issues start becoming subjects of popular parody, maybe I can entertain a tiny hope that something might be done.


So I get to say again, again again...  many of largest and once proud health care organizations now have recent records of repeated, egregious ethical lapses. Not only have their leaders have nearly all avoided penalties, but they have become extremely rich while their companies have so misbehaved.

These leaders seem to have become like nobility, able to extract money from lesser folk, while remaining entirely unaccountable for bad results of their reigns. We can see from this case that health care organizations' leadership's nobility overlaps with the supposed "royalty" of the leaders of big financial firms, none of whom have gone to jail after the global financial collapse, great recession, and ongoing international financial disaster (look here). The current fashion of punishing behavior within health care organization with fines and agreements to behave better in the future appears to be more law enforcement theatre than serious deterrent.  As Massachusetts Governor Deval Patrick exhorted his fellow Democrats, I exhort state, federal (and international, for that  matter) law enforcement to "grow a backbone" and go after the people who were responsible for and most profited from the ongoing ethical debacle in health care.

As we have said before, true health care reform would make leaders of health care organization accountable for their organizations' bad behavior.

Roy M. Poses MD on Health Care Renewal 

1 comment:

Anonymous said...

and the $JNJ stock keeps going higher.