Cybernetic Opioid Pushers: EHR vendor Practice Fusion to Pay $145 Million to Resolve Criminal and Civil Investigations

Considering the devastating and deadly opioid problems in this country, this news release from DOJ describes particularly despicable behavior from an EHR vendor and pharmas.

These problems are likely more widespread, but this EHR company got caught.

The company admitted that it solicited and received kickbacks from a major opioid company in exchange for utilizing its EHR software to influence physician prescribing of opioid pain medications, via "decision support" routines specifically designed by the drug company to increase drug company profits.

The DOJ reports that in exchange for “sponsorship” payments from pharmaceutical companies, Practice Fusion allowed the companies to influence the development and implementation of the CDS (clinical decision support) alerts in ways aimed at increasing sales of the companies’ products.  Practice Fusion allegedly permitted pharmaceutical companies to participate in designing the CDS alert, including selecting the guidelines used to develop the alerts, setting the criteria that would determine when a healthcare provider received an alert, and in some cases, even drafting the language used in the alert itself.  The CDS alerts that Practice Fusion agreed to implement did not always reflect accepted medical standards.

This story could certainly help explain why I could never get involved in EHR initiatives in pharma, despite having been at Merck in a science-support capacity, but seeking EHR involvement.  I had completed a Yale Medical Informatics postdoc and then faculty period authoring EHRs domestically and for a foreign country, and then had a period as a CMIO in Delaware. Yet, my many pharma applications over many years afterwards for EHR-related positions were mostly ignored.

The reason behind that shutout could likely be that I was known as being exceptionally honest, if only in part for my candid writing on EHR problems first on AOL 1999-2004, then at Drexel University and at this blog, at a time when the pundits and hyper-enthusiasts were pushing the technology uncritically and relentlessly.

Indeed, I would never have tolerated the types of conspiracy (DOJ's word) between EHR companies and pharma that are described in this DOJ release to help push drugs, any drugs - let alone opioids.

To make matters worse, this vendor is also described as cheating on the HHS EHR "certification" process.  The company is described as concealing from the certifying entity, known as an ONC-Authorized Certification Body (ATCB), that the EHR software did not comply with all of the applicable requirements for certification.

Apparently, no defendants were jailed.

I am posting the DOJ release in its entirety.  It is quite comprehensive, and I have nothing to add.

https://www.justice.gov/opa/pr/electronic-health-records-vendor-pay-145-million-resolve-criminal-and-civil-investigations-0

Department of Justice

Office of Public Affairs

---

FOR IMMEDIATE RELEASE

Monday, January 27, 2020

Electronic Health Records Vendor to Pay $145 Million to Resolve Criminal and Civil Investigations

Practice Fusion Inc. Admits to Kickback Scheme Aimed at Increasing Opioid Prescriptions

Practice Fusion Inc. (Practice Fusion), a San Francisco-based health information technology developer, will pay $145 million to resolve criminal and civil investigations relating to its electronic health records (EHR) software, the Department of Justice announced today.

As part of the criminal resolution, Practice Fusion admits that it solicited and received kickbacks from a major opioid company in exchange for utilizing its EHR software to influence physician prescribing of opioid pain medications.  Practice Fusion has executed a deferred prosecution agreement and agreed to pay over $26 million in criminal fines and forfeiture.  In separate civil settlements, Practice Fusion has agreed to pay a total of approximately $118.6 million to the federal government and states to resolve allegations that it accepted kickbacks from the opioid company and other pharmaceutical companies and also caused its users to submit false claims for federal incentive payments by misrepresenting the capabilities of its EHR software.

“Across the country, physicians rely on electronic health records software to provide vital patient data and unbiased medical information during critical encounters with patients,” said Principal Deputy Assistant Attorney General Ethan Davis of the Department of Justice’s Civil Division.  “Kickbacks from drug companies to software vendors that are designed to improperly influence the physician-patient relationship are unacceptable.  When a software vendor claims to be providing unbiased medical information – especially information relating to the prescription of opioids – we expect honesty and candor to the physicians making treatment decisions based on that information.”
The resolution announced today addresses allegations that Practice Fusion extracted unlawful kickbacks from pharmaceutical companies in exchange for implementing clinical decision support (CDS) alerts in its EHR software designed to increase prescriptions for their drug products. 

Specifically, in exchange for “sponsorship” payments from pharmaceutical companies, Practice Fusion allowed the companies to influence the development and implementation of the CDS alerts in ways aimed at increasing sales of the companies’ products.  Practice Fusion allegedly permitted pharmaceutical companies to participate in designing the CDS alert, including selecting the guidelines used to develop the alerts, setting the criteria that would determine when a healthcare provider received an alert, and in some cases, even drafting the language used in the alert itself.  The CDS alerts that Practice Fusion agreed to implement did not always reflect accepted medical standards.  In discussions with pharmaceutical companies, Practice Fusion touted the anticipated financial benefit to the pharmaceutical companies from increased sales of pharmaceutical products that would result from the CDS alerts.  Between 2014 and 2019, health care providers using Practice Fusion’s EHR software wrote numerous prescriptions after receiving CDS alerts that pharmaceutical companies participated in designing.

Practice Fusion executed a deferred prosecution agreement with the U.S. Attorney’s Office for the District of Vermont based on its solicitation and receipt of kickbacks from a major opioid company to arrange for an increase in prescriptions of extended release opioids by healthcare providers who used Practice Fusion’s EHR software.  As detailed in the criminal Information made public today, Practice Fusion solicited a payment of nearly $1 million from the opioid company to create a CDS alert that would cause doctors to prescribe more extended release opioids.  That payment was financed by the opioid company’s marketing department, and the CDS was designed with input from the marketing department.  Practice Fusion and the opioid company entered the CDS sponsorship because they believed that the CDS would influence doctors’ prescriptions of extended release opioids.  In marketing the “pain” CDS alert, Practice Fusion touted that it would result in a favorable return on investment for the opioid company based on doctors prescribing more opioids.

“Practice Fusion’s conduct is abhorrent.  During the height of the opioid crisis, the company took a million-dollar kickback to allow an opioid company to inject itself in the sacred doctor-patient relationship so that it could peddle even more of its highly addictive and dangerous opioids,” said Christina E. Nolan, U.S. Attorney for the District of Vermont.  “The companies illegally conspired to allow the drug company to have its thumb on the scale at precisely the moment a doctor was making incredibly intimate, personal, and important decisions about a patient’s medical care, including the need for pain medication and prescription amounts.  This recovery is commensurate to the nature of Practice Fusion’s misconduct, represents the largest criminal fine in the history of this District, and requires Practice Fusion to admit to its wrongs.  It is another example of pioneering healthcare fraud enforcement by the talented Assistant U.S. Attorneys and staff of this U.S. Attorney’s Office, working with their partners in law enforcement.  We cannot — and will not — tolerate technology companies influencing patient treatment merely because a pharmaceutical company provided a kickback.”

The criminal Information charges Practice Fusion with two felony counts for violating the Anti-Kickback Statute (AKS), 42 U.S.C. § 1320a-7b(b)(1), and for conspiring with its opioid company client to violate the AKS, 18 U.S.C. § 371.  This case is the first ever criminal action against an EHR vendor and the unique Deferred Prosecution Agreement imposes stringent requirements on Practice Fusion to ensure acceptance of responsibility and transparency as to its underlying conduct, and to invest heavily in compliance overhauls and an independent oversight organization.  The Deferred Prosecution Agreement requires Practice Fusion to pay a criminal fine of $25,398,300 and forfeit criminal proceeds of nearly $1 million.  In addition, the company will cooperate in any ongoing investigations of the kickback arrangement and report any evidence of kickback violations by any other EHR vendors.  To ensure transparency and public awareness of the company’s activities while the nation continues to battle an epidemic of opioid addiction, the Deferred Prosecution Agreement requires Practice Fusion to make documents relating to its unlawful conduct available to the public through a website.  Additionally, the Deferred Prosecution Agreement mandates that Practice Fusion retain an independent oversight organization that is required to review and approve any sponsored CDS before Practice Fusion may implement the CDS, and create a comprehensive compliance program designed to ensure such abuses are not repeated.

The civil settlement with the United States resolves Practice Fusion’s civil liability arising from the submission of false claims to federal healthcare programs tainted by the kickback arrangement between Practice Fusion and the opioid company.  It also resolves allegations of kickbacks relating to thirteen other CDS arrangements where Practice Fusion agreed with pharmaceutical companies to implement CDS alerts intended to increase sales of their products.  The $118.6 million settlement amount includes approximately $113.4 million to the federal government and up to $5.2 million to states that opt to participate in separate state agreements.

“Prescription decisions should be based on accurate data regarding a patient’s medical needs, untainted by corrupt schemes and illegal kickbacks,” said U. S. Attorney David L. Anderson of the Northern District of California.  “In deciding what is best for patients, electronic health records software is an important tool for care providers.  It is critically important that technology companies do not cheat when certifying that software.”

In addition to the kickback allegations, the civil settlement with the United States resolves allegations relating to two intersecting Department of Health and Human Services (HHS) programs, one at the Office of the National Coordinator for Health Information Technology (ONC) that regulates the voluntary health IT certification program, and one at the Centers for Medicare & Medicaid Services that oversees EHR incentive programs.  Specifically, the United States alleged that Practice Fusion falsely obtained ONC certification for several versions of its EHR software by concealing from its certifying entity, known as an ONC-Authorized Certification Body, that the EHR software did not comply with all of the applicable requirements for certification.  ONC’s certification criteria were designed to promote enhanced functionality, utility, and security of health information technology, and access to patient medical information across the care continuum.  HHS implemented the certification criteria for EHR software in multiple stages, known as editions.  To be certified under the 2014 Edition certification criteria, EHR software was required to allow users to electronically create a set of standardized export summaries for all patients.  When Practice Fusion sought certification of this 2014 Edition criteria, Practice Fusion falsely represented to the certifying body that its software met this data portability requirement, when several versions of its software did not.  The civil settlement resolves allegations that, at the time these versions of Practice Fusion’s software were certified, its software was unable to permit a user to create a set of standardized export summaries.  Additionally, after obtaining certification of the 2014 Edition criteria, Practice Fusion disabled access to this feature altogether.  Instead, Practice Fusion required users to contact it separately to request export of this critical patient data.

In addition to failing to satisfy the data portability requirement, Practice Fusion’s software allegedly did not incorporate standardized vocabularies as required for certification.  The United States alleged that by fraudulently obtaining certification for its products, Practice Fusion knowingly caused eligible healthcare providers who used certain versions of its 2014 Edition EHR software to falsely attest to compliance with HHS requirements necessary to receive incentive payments from Medicare during the reporting periods for 2014 through 2016 and from Medicaid during the reporting periods for 2014 through 2017.

“As new technologies continue to develop and evolve, so too do new and innovative fraud schemes,” said Shimon R. Richmond, Assistant Inspector General for Investigations of the U.S. Department of Health and Human Services. “We will continue to be vigilant in detecting and investigating these schemes in order to protect the safety of patients in federal health programs and to ensure the appropriate use of electronic health records in providing their care.”

“Today's announcement shows that Practice Fusion exploited technology to profit at the expense of a vulnerable population – patients seeking medical advice," said Timothy M. Dunham, Special Agent in Charge of the FBI's Washington Field Office, Criminal Division.  "The FBI is committed to working with our partners to bring to justice the perpetrators of healthcare fraud in all its forms, especially one that fans the flames of the already rampant opioid epidemic.”

The U.S. Attorney’s Office for the District of Vermont handled the criminal investigation and resolution.  The civil investigation was jointly handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorneys’ Offices for the District of Vermont and the Northern District of California.  The investigation was supported by the HHS Office of Inspector General and multiple HHS agencies and components.  The FBI’s field office in Washington, DC, also provided significant investigative support.

Except for the conduct admitted in connection with the criminal resolution, the civil claims resolved by the settlement are allegations only, and there has been no determination of liability as to such civil claims.

Johnson and Johnson's "Landmark" Opioid Settlement, or Just Another Chapter in the Story of Corporate Management's Impunity?

Introduction: our Chronic Narcotics Problem

Narcotic addiction has plagued human societies for hundreds of years.

[Print, 1880, opium den, London]


So as I have written before, after seeing too many dire results of narcotic addiction during my training and early career, I was dismayed how narcotics were pushed as the treatment of choice for chronic pain in the 1990s, with the predictable result that the US was once again engulfed in an epidemic of narcotic abuse.  In the last few years, the narcotics (now called "opioids") epidemic has frequently been in the headlines.  A few days ago, a judge decided that one large pharmaceutical/ biotechnology/ device company bears some blame for the problem

The Johnson and Johnson "Landmark" Settlement

On August 26, 2019, the New York Times reported a "landmark," per the headline, settlement:

A judge in Oklahoma on Monday ruled that Johnson & Johnson had intentionally played down the dangers and oversold the benefits of opioids, and ordered it to pay the state $572 million in the first trial of a drug manufacturer for the destruction wrought by prescription painkillers.

The judge wrote

that Johnson & Johnson had promulgated 'false, misleading, and dangerous marketing campaigns' that had 'caused exponentially increasing rates of addiction, overdose deaths' and babies born exposed to opioids.

It seems like a big story, big enough for another NYT article to fret over how the settlement might damage Johnson and Johnson's sterling reputation.  

For Johnson & Johnson, which has said it plans to appeal, the decision represents another blow to its reputation as the trusted brand of parents, doctors and nurses.

Wall Street Journal editorialists fretted even more,

the ruling could have far larger, and more dangerous, consequences by opening a vast new arena for product-liability suits.

And warned the opioid epidemic will not

be eased by bankrupting America's pharmaceutical companies

Maybe threats to this upstanding company inspired US President Trump, while running the most conflicted and corrupt administration ever (look here), to promote another fine Johnson and Johnson product.  On August 23, 2019, the Atlantic reported,

President Donald Trump said on Wednesday that the government will purchase 'a lot of the drug esketamine, a derivative of ketamine.

Though ketamine is known as a recreational hallucinogen, Trump asserted that a new nasal-spray derivative would be of great benefit to veterans with depression. As he left the White House for a veterans’ conference in Kentucky, he told reporters that he had instructed the Department of Veterans Affairs to make a large purchase—overriding a recent decision by the doctors who manage the hospitals’ formulary of which drugs are to be prescribed.

'There’s a product that’s made right now that just came out by Johnson & Johnson which has a tremendously positive—pretty short-term, but nevertheless positive—effect,' Trump said. But that statement is contrary to the evidence. A review by the Food and Drug Administration of what limited studies have been done with esketamine found mixed results, leaving many scientists unsure if the drug is indeed effective and safe. Just last week, the agency published a report that said the drug was not reliably better than placebo.

Should the Wall Street Journal (and perhaps President Trump) really be so worried? Was this settlement really so dire?

The March of Legal Settlements Continues

In fact, this particular settlement did not seem very harsh.  Per the first NYT article,

The amount fell far short of the $17 billion judgment that Oklahoma had sought to pay for addiction treatment, drug courts and other services it said it would need over the next 20 years to repair the damage done by the opioid epidemic.

The amount of the settlement would be unlikely in and of itself to give corporate leadership pause, given that the company's revenues exceeded $81 billion last year (look here).

While the judge found that Johnson and Johnson caused a "public nuisance," this seems unlikely to inspire much shame in corporate leaders, who took no overt responsibility for the narcotic epidemic:

In a statement about the Oklahoma case, Michael Ullmann, the general counsel and executive vice president of Johnson & Johnson, referring to the company’s pharmaceutical subsidiary, said that 'Janssen did not cause the opioid crisis in Oklahoma, and neither the facts nor the law support this outcome.'

'We recognize the opioid crisis is a tremendously complex public health issue,' he said, 'and we have deep sympathy for everyone affected.'

And like many other legal settlements which we have discussed in the past, this one caused no one at Johnson and Johnson who approved, directed, or implemented the deceptive marketing and other bad behavior to suffer any negative consequences. 

Ignoring Another Corporation's Dismal Record

Furthermore, the settlement, like most others we have discussed, ignored Johnson and Johnson's extensive track record of misbehavior.

The second NYT article did allow that the company has withstood

a series of damaging setbacks to its brand, including a spate of lawsuits over whether its talcum powder led to ovarian cancer, and high-profile cases over other potentially flawed products, like pelvic mesh and the anti-stroke drug Xarelto, which has caused excessive bleeding.

'Johnson & Johnson is a corporation under duress on a number of fronts,' said Stephen Hahn-Griffiths, an executive at Reputation Institute, which tracks public perception of companies through regular surveys.

However, that barely scratched the surface of Johnson and Johnson's record.  In a 2018 post we discussed accusations that Johnson and Johnson tried to cover up the adverse effects of its baby powder.  However, we also discussed a settlement the company made of allegations it gave kickbacks to patients to facilitate its over-pricing of Tracleer, a drug for pulmonary artery hyptertension.  These were just the latest in a long string of misadventures by the company, as we have been documenting over years.  (Our collected posts on Johnson & Johnson are here.  An updated version of their legal record from 2010 to 2016 is at the end of this post.)

Perusing the list suggests that this giant company is a poster child for bad behavior by health care organizations.  It has faced a multitude of allegations leading to settlements, and sometimes findings of guilt.  The charges included many instances of deceptive and unethical marketing, some that promoted drugs or devices for use in situations in which they may have had harms outweighing their benefit, some that involved concealing knowledge of their risks, and some of selling adulterated drugs or defective products. 


What is striking is that the company and its management have not faced more consequences for this sorry track record.

Although the company has paid multiple fines and made numerous monetary settlements over the years, none have been big enough to affect its immense revenues.  Furthermore, ultimately the monies used to pay them came from all Johnson & Johnson employees in the form of smaller paychecks; customers, patients and the public at large in the form of higher prices; and only to some extent by investors in the form of slightly lower profits.  Meanwhile, it appears that the company's top managers made an immense amount of money, possibly in part as rewards for the revenues produced by the misadeventures.

Former Johnson & Johnson CEO William Weldon, upon his retirement in 2014, was to receive a retirement package estimated to be worth from $143 to $197 million (look here).  In 2010, his total compensation was $29 million (look here).   According to the 2012 Johnson and Johnson proxy statement, his 2011 total compensation was greater than $26 million. As far as I can tell, Mr Weldon never suffered any negative consequences for his company's sorry record, and retired a very rich man. (look here).

Current CEO Alex Gorsky received  $25 million total compensation in 2014 (look here).  More recently, the New York Times reported his 2017 total pay was $22.8 million, making him the seventh highest paid health care executive that year. 

While management made so much money, very rarely has anyone who was involved in authorizing, directing, or implementing bad behavior had to suffer any negative consequences, therefore appearing to enjoy impunity.

So what was to deter management from embarking on further misadventures, as long as the results might be enlarging their personal wealth? 

And why should we expect that this settlement will lead to any meaningful solution to the ongoing narcotics (opioid) epidemic?

Summary: Meaningless Settlements and the Impunity of Top Management

Nothing changes.  We have seen many legal settlements by health care organizations of charges of  fraud, bribery, and kickbacks.  Often such behaviors appeared to risk patient harms.  However, the companies involved usually paid tiny fines that relative to their revenues.  Rarely did they have to admit responsibility, and almost never did a settlement cause company managers and leaders to  suffer any negative consequences for enabling, authorizing, directing or implementing the bad behavior.

Thus it seems that US health care is rigged to benefit top insiders and their cronies, and is part of a larger rigged system.  We have previously discussed how market fundamentalism (or neoliberalism) led to deregulation, which enabled deception, fraud, bribery, and intimidation to become standard business practices, concentrating corporate power while top managers got rich. Other employees, patients, customers, vendors and suppliers, and the public at large lost out.   In health care, these changes led to an increasingly costly system which produced increasingly bad results. 

We have called for true health care reform to derig the system. Unfortunately, despite our hopes, perceptions of a rigged system may not always inspire honest reform. Instead, they can facilitate the rise of demagogues and would be dictators.  Donald Trump cried out that only he could fix our problems and drain our swamps, but the waters are now rising (look here) while he has enjoyed his own impunity (look here).  

The "landmark" settlement by Johnson and Johnson should remind us of the reforms we have not achieved.  However, to have a chance of truly reforming health care, we need to accomplish wholesale government reform. We need to excise the deception, crime and corruption at the heart of our government and restore government by the people, of the people, and for the people. 

Appendix - A Look at Some of Johnson and Johnson's Legal Record 2010-2016

Derived from our previous blog posts - 

 2010
- Convictions in two different states for misleading marketing of Risperdal
- A guilty plea for misbranding Topamax

2011
- Guilty pleas to bribery in Europe by DePuy subsidiary
- A guilty plea for marketing Risperdal for unapproved uses  (see this link for all of the above)
- A guilty plea to misbranding Natrecor by subsidiary Scios (see post here)

2012 
  - Testimony in a trial of allegations of unethical marketing of the drug Risperdal (risperidone) by the Janssen subsidiary revealed a systemic, deceptive stealth marketing campaign that fostered suppression of research whose results were unfavorable to the company, ghostwriting, the use of key opinion leaders as marketers in the guise of academics and professionals, and intimidation of whistleblowers. After these revelations, the company abruptly settled the case (see post here).
-  fined $1.1 billion by a judge in Arkansas for deceiving patients and physicians again about Risperdal (look here).
-  announced it would pay $181 million to resolve claims of deceptive advertising again about Risperdal (see this post).

2013
-  settled case by shareholders alleging that management made misleading statements and withheld material information about manufacturing problems (see this post)
-  Janssen subsidiary pleaded guilty to a charge of misbranding Risperdal, and settled for a total of $2.2 billion allegations that it promoted the drug for elderly demented patients and adolescents without an indication, and despite evidence of its harms (see this post).
 -  DePuy subsidiary agreed to settle with multiple plaintiffs for $2.5 billion allegations that it sold defective mental-on-metal artificial hip, and hid evidence of its harms .
-  Janssen subsidiary was found by two juries to have concealed harms of its drug Topamax (see this post for this and above case).
-  Ethicon subsidiary's Advanced Surgical Products and two of its executives agreed to settle charges by US FDA that is sold mislabeled products used to sterilize equipment such as endoscopes (see this post).
- fined by European Commission for anticompetitive practices, that is, collusion with Novartis to delay marketing generic version of Fentanyl (see this post).

2014 
- DePuy subsidiary settled Oregan state charges that it marketed the ASR XL metal-on-metal hip joint prosthesis without disclosing its high failure rate (see this post).

2015
-  found by jury to have concealed harms of Risperdal.
-  Ethicon subsidiary found by jury to have concealed harms of its vaginal mesh device.
-  McNeil subsidiary pleaded guilty to marketing adulterated Tylenol. (see this post for three items above.)

2016
- subsidiary Aclarent settled allegations that it sold its Stratus device for unapproved uses.  Two former executives of that subsidiary also were found guilty of distributing misbranded and adulterated devices (see this post) 
 

Johnson and Johnson's Latest Ethical Misadventures: Settled Kickback Allegations, Reportedly Concealed Knowledge of Adverse Effects of a "Sacred Cow" Product

Giant pharmaceutical/ biotechnology/ device company Johnson & Johnson has its famous "credo" which starts with

We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services.  In meeting their needs everything we do must be of high quality..

Nonetheless, the company has a long history of ethical misadventures (look here, and see appendix below).  Now late in 2018,  we note two more Johnson & Johnson misadventures. In chronological order,


$360 Million Settlement of Allegations of Kickbacks to Medicare/ Medicaid Patients to Support Use of Extremely Expensive Drug

The story, per the New York Times, was that Actelion, a drug maker purchased by Johnson & Johnson in 2017, in 2014-2015 had

raised the price of its main drug, Tracleer, by nearly 30 times the rate of inflation. Tracleer, which is prescribed to treat pulmonary arterial hypertension, sells in pharmacies for an average cash price of about $14,500 for 60 tablets, according to the website GoodRx.

But to facilitate charging such high prices, pharmaceutical companies

often help patients pay their out-of-pocket costs through coupons or other financial assistance. These payments are not just about benevolence — they also help blunt the outrage over rising drug prices by limiting how much patients have to pay. Insurers then cover most of the cost.

But federal anti-kickback laws prohibit companies from giving such financial assistance to Medicare and Medicaid beneficiaries because doing so is considered an inducement to buy their drugs. For years, drug makers have skirted those laws by instead donating to nonprofit charities, which then give the money to Medicare patients. Such arrangements are legal as long as there is no direct coordination between the pharmaceutical company and the nonprofit organization.

However,

Federal prosecutors said Actelion violated the law by collecting detailed data in 2014 and 2015 about the patients receiving help from a nonprofit, the Caring Voice Coalition, and using the data to budget for future donations. As a result, Actelion ensured that the money it donated would be used only to assist patients who used its drugs, and not competing companies’ treatments for the pulmonary condition.

Prosecutors said Actelion kept up the practice even after the charity itself warned the company against it.

Actelion also steered Medicare patients to the Caring Voice Coalition who would have otherwise qualified financially for the company’s free drug program. By directing them to the nonprofit, the company avoided having to provide the drug to eligible patients and left Medicare to cover the cost instead, prosecutors said.

So,

Actelion Pharmaceuticals has agreed to a $360 million settlement stemming from an investigation into whether the company illegally funneled kickbacks through a patient-assistance charity, federal prosecutors said Thursday.

But keep in mind that Actelion is now a Johnson & Johnson subsidiary, and by buying it, Johnson & Johnson bought its financial, and ethical and legal liabilities.. So ultimately it will be Johnson & Johnson which pays the settlement.

Johnson & Johnson Alleged to Have Concealed Knowledge that its Baby Powder Contains Asbestos

The first reporting on this story was a lengthy investigative report from Reuters published December 14, 2018, based on newly released documents produced during a variety of lawsuits.  The report stated

that from at least 1971 to the early 2000s, the company’s raw talc and finished powders sometimes tested positive for small amounts of asbestos, and that company executives, mine managers, scientists, doctors and lawyers fretted over the problem and how to address it while failing to disclose it to regulators or the public.

The documents also depict successful efforts to influence U.S. regulators’ plans to limit asbestos in cosmetic talc products and scientific research on the health effects of talc.

Note that since the 1970s, exposure to asbestos has been recognized as an important health hazard.  In 1972, the US agency OSHA limited occupational exposure to asbestos.  Also,

The World Health Organization and other authorities recognize no safe level of exposure to asbestos.

Johnson & Johnson has been sued by

11,700 plaintiffs now claiming that the company’s talc caused their cancers — including thousands of women with ovarian cancer.

After three major jury verdicts that found Johnson & Johnson liable for cancers caused by asbestos in its baby power,

J&J has said it will appeal the recent verdicts against it. It has maintained in public statements that its talc is safe, as shown for years by the best tests available, and that the information it has been required to divulge in recent litigation shows the care the company takes to ensure its products are asbestos-free. It has blamed its losses on juror confusion, 'junk' science, unfair court rules and overzealous lawyers looking for a fresh pool of asbestos plaintiffs

However, there now seems to be substantial evidence that the company's public posturing is a smokescreen. While in the past Johnson & Johnson internal documents about its management decision making related to talc and asbestos were used in litigation,

Many were shielded from public view by court orders that allowed J&J to turn over thousands of documents it designated as confidential. [But] Much of their contents is reported here for the first time.

These showed,

The earliest mentions of tainted J&J talc that Reuters found come from 1957 and 1958 reports by a consulting lab. They describe contaminants in talc from J&J’s Italian supplier as fibrous and 'acicular,' or needle-like, tremolite. That’s one of the six minerals that in their naturally occurring fibrous form are classified as asbestos.

At various times from then into the early 2000s, reports by scientists at J&J, outside labs and J&J’s supplier yielded similar findings. The reports identify contaminants in talc and finished powder products as asbestos or describe them in terms typically applied to asbestos, such as 'fiberform' and 'rods.'

In 1976, as the U.S. Food and Drug Administration (FDA) was weighing limits on asbestos in cosmetic talc products, J&J assured the regulator that no asbestos was 'detected in any sample' of talc produced between December 1972 and October 1973. It didn’t tell the agency that at least three tests by three different labs from 1972 to 1975 had found asbestos in its talc – in one case at levels reported as 'rather high.'

The article shows that the company repeatedly found evidence that asbestos was present in the raw talc that went into its baby powder, first in 1957, and could be found at times in samples of the finished product since 1971.  Since the 1970s, Johnson & Johnson managers realized that the asbestos was a problem.  For example,

J&J research director DeWitt Petterson visited the company’s Vermont mining operation. 'Occasionally, sub-trace quantities of tremolite or actinolite are identifiable,' he wrote in an April 1973 report on the visit. 'And these might be classified as asbestos fiber.'

J&J should 'protect our powder franchise' by eliminating as many tiny fibers that can be inhaled in airborne talc dust as possible, Petterson wrote. He warned, however, that 'no final product will ever be made which will be totally free from respirable particles.' Introducing a cornstarch version of Baby Powder, he noted, 'is obviously another answer.'

Slightly later on December 14, 2018, the New York Times published its own story on asbestos in Johnson & Johnson talcum powder.  It corroborated the Reuters report while adding informative detail.  It started with:

An executive at Johnson & Johnson said the main ingredient in its best-selling baby powder could potentially be contaminated by asbestos, the dangerous mineral that can cause cancer. He recommended to senior staff in 1971 that the company 'upgrade' its quality control of talc.

Two years later, another executive raised a red flag, saying the company should no longer assume that its talc mines were asbestos-free. The powder, he said, sometimes contained materials that “might be classified as asbestos fiber.”

The carcinogen, which often appears underground near talc, has been a concern inside the company for decades. In hundreds of pages of memos, executives worried about a potential government ban of talc, the safety of the product and a public backlash over Johnson’s Baby Powder, a brand built on a reputation for trustworthiness and health.

Executives proposed new testing procedures or replacing talc outright, while trying to discredit research suggesting that the powder could be contaminated with asbestos, according to corporate documents unearthed by litigation, government records obtained by The New York Times through the Freedom of Information Act, and interviews with scientists and lawyers.

In one instance, Johnson & Johnson demanded that the government block unfavorable findings from being made public. An executive ultimately won assurances from an official at the Food and Drug Administration that the findings would be issued only 'over my dead body,' a memo summarizing the meeting said.

Thus, despite these warnings of asbestos in talcum powder, Johnson & Johnson continued to sell it.  There is certainly now strong reason to suspect that for decades Johnson & Johnson management has been denying its own fears about asbestos contamination of its baby powder, and doing its best to hide evidence of its hazards, thus benefiting the corporate bottom line, but allowing continued exposure of large number of people to a potentially hazardous, even fatal product.



The Business World Tries to Shrug It Off

Responding to the Reuters and New York Times story, many business pundits stated their confidence in Johnson & Johnson as an investment.  For example, Charley Grant wrote in the Wall Street Journal,

But while investors should be wary, they needn’t panic. J&J’s strong finances and diverse revenue base are good coping mechanisms.

Wells Fargo, per CNBC, opined

the selling based purely on the outcomes of any talc litigation is likely overstated.

But does Johnson & Johnson's management really act on its belief that its "first responsibility is to "doctors, nurses, and patients, to mothers and fathers?" On CNBC,  Bill George wrote,

It is not plausible that these leaders knew nearly five decades ago that their iconic baby powder caused cancer and continued to market the product. This is a company whose leaders consistently try to do the right thing, admit their mistakes, and continue to develop life-saving products that restore the health of millions of people around the world.

While the plaintiffs' attorneys may continue to pursue their cases, I feel confident that J&J will be shown to put the interests of its customers first, and maintain its reputation for the highest integrity.

I wonder if Mr George's confidence was boosted by his previous work as a paid speaker for Johnson & Johnson, and former chairman and CEO of Medtronic, a company which has had its own share of ethical misadventures (look here)?  In any case, some recent history calls into question Johnson & Johnson's "reputation for the highest integrity."

Johnson & Johnson's Long History of Ethical Misadventures

So, recent reports suggested that Johnson & Johnson willfully acquired a company that appears to have provided kickbacks to patients in apparent violation of US law in an effort to support high drug prices.  Furthermore, Johnson& Johnson appears to have concealed considerable evidence that one of its primary products might be dangerous in order to support the sales of a "'sacred cow,' as one internal email put it (per the Reuters report).

These are but  the latest in a long string of misadventures by the company, as we have been documenting over years.  (Our collected posts on Johnson & Johnson are here.  An updated version of their legal record since 2010 is at the end of this post.)

Perusing the list suggests that this giant company (with about $70 billion in yearly revenue) is a poster child for bad behavior by health care organizations.  It has faced a multitude of allegations leading to settlements, and sometimes findings of guilt.  The charges included many instances of deceptive and unethical marketing, some that promoted drugs or devices for use in situations in which they may have had harms outweighing their benefit, some that involved concealing knowledge of their risks, and some of selling adulterated drugs or defective products. 

So the new allegations of deceptive marketing meant to conceal a hazardous product are just the latest in the series.

What is striking is that the company and its management have not faced more consequences for this sorry track record.

Although the company has paid multiple fines and made numerous monetary settlements over the years, none have been big enough to affect its immense revenues.  Furthermore, ultimately the monies used to pay them came from all Johnson & Johnson employees in the form of smaller paychecks; customers, patients and the public at large in the form of higher prices; and only to some extent by investors in the form of slightly lower profits.  Meanwhile, it appears that the company's top managers made an awful lot of money, possibly in part as rewards for the revenues produced by the misadeventures.

Former Johnson & Johnson CEO William Weldon, upon his retirement in 2014, was to receive a retirement package estimated to be worth from $143 to $197 million (look here).  In 2010, his total compensation was $29 million (look here).   According to the 2012 Johnson and Johnson proxy statement, his 2011 total compensation was greater than $26 million. As far as I can tell, Mr Weldon never suffered any negative consequences for his company's sorry record, and retired a very rich man. (look here).

Current CEO Alex Gorsky received  $25 million total compensation in 2014 (look here).  More recently, the New York Times reported his 2017 total pay was $22.8 million, making him the seventh highest paid health care executive in that year, by their accounting. 

While management made so much money, very rarely has anyone at the company who was involved in authorizing, directing, or implementing any of the bad behavior had to suffer any negative consequences, therefore appearing to enjoy impunity.

So what was to deter management from embarking on further misadventures, as long as the results might be enlarging management's personal wealth?  

This is all in line with what we have been discussing for years.  In general, we have seen many legal settlements made by health care organizations of alllegations like fraud, bribery, and kickbacks.  Despite the unsavory nature of the behaviors revealed by most settlements, which often appeared to risk patient harms, the companies involved usually have had to pay fines that were tiny relative to their multi-billion dollar revenues.  They companies only seldom have had to admit responsibility, and almost never did a settlement cause company managers and leaders to  suffer any negative consequences for enabling, authorizing, directing or implementing the bad behavior.

This adds to the evidence suggesting that US health care is rigged to benefit top insiders and their cronies, and as such, is part of a larger rigged system.  We have previously discussed how market fundamentalism (or neoliberalism) led to deregulation, which enabled deception, fraud, bribery, and intimidation to become standard business practices, and allowed increasing concentration of power by large corporations. Managerialism allowed the top leaders of these corporations and their insider cronies to amass increasing power and money. Everyone else, other employees, stockholders of public corporations, customers, vendors and suppliers, and the public at large lost out.   In health care, these changes led to an increasingly costly system which produced increasingly bad results for patients and the public. 

We have called for true health care reform to derig the system. Unfortunately, despite our hopes, perceptions of a rigged system may not always inspire honest reform. Instead, they can enable the rise of demagogues and wouldbe dictators who promise only they can solve the problem.  Donald Trump cried out that only he could fix our problems and drain our swamps.  However, at least in terms of policing white-collar crime, particularly in health care, he seems to be letting the swamp waters rise.  And now he seems to have had his own record of impunity (look here).  

While we thus have bigger problems to solve than the impunity of health care leaders, let us remember the need for wholesale, real health care reform that would make health care leaders accountable for what their organizations do, particularly when these organizations misbehave.


Appendix - Johnson and Johnson Legal Record since 2010

 2010
- Convictions in two different states for misleading marketing of Risperdal
- A guilty plea for misbranding Topamax

2011
- Guilty pleas to bribery in Europe  by Johnson and Johnson's DePuy subsidiary
- A guilty plea for marketing Risperdal for unapproved uses  (see this link for all of the above)
- A guilty plea to misbranding Natrecor by J+J subsidiary Scios (see post here)

2012 
  - Testimony in a trial of allegations of unethical marketing of the drug Risperdal (risperidone) by the Janssen subsidiary revealed a systemic, deceptive stealth marketing campaign that fostered suppression of research whose results were unfavorable to the company, ghostwriting, the use of key opinion leaders as marketers in the guise of academics and professionals, and intimidation of whistleblowers. After these revelations, the company abruptly settled the case (see post here).
-  Johnson & Johnson was fined $1.1 billion by a judge in Arkansas for deceiving patients and physicians again about Risperdal (look here).
-  Johnson & Johnson announced it would pay $181 million to resolve claims of deceptive advertising again about Risperdal (see this post).

2013
-  Johnson & Johnson settled case by shareholders alleging that management made misleading statements and withheld material information about manufacturing problems (see this post)
-  Johnson & Johnson Janssen subsidiary pleaded guilty to a charge of misbranding Risperdal, and settled for a total of $2.2 billion allegations that it promoted the drug for elderly demented patients and adolescents without an indication, and despite evidence of its harms (see this post).
 -  Johnson & Johnson DePuy subsidiary agreed to settle with multiple plaintiffs for $2.5 billion allegations that it sold defective mental-on-metal artificial hip, and hid evidence of its harms .
- Johnson & Johnsonn Janssen subsidiary was found by two juries to have concealed harms of its drug Topamax (see this post for this and above case).
- Johnson & Johnson Ethicon subsidiary's Advanced Surgical Products and two of its executives agreed to settle charges by US FDA that is sold mislabeled products used to sterilize equipment such as endoscopes (see this post).
- Johnson & Johnson fined by European Commission for anticompetitive practices, that is, collusion with Novartis to delay marketing generic version of Fentanyl (see this post).

2014 
- Johnson & Johnson DePuy subsidiary settled Oregan state charges that it marketed the ASR XL metal-on-metal hip joint prosthesis without disclosing its high failure rate (see this post).

2015
-  Johnson & Johnson found by jury to have concealed harms of Risperdal.
-  Johnson & Johnson Ethicon subsidiary found by jury to have concealed harms of its vaginal mesh device.
-  Johnson & Johnson McNeil subsidiary pleaded guilty to marketing adulterated Tylenol. (see this post for three items above.)

2016
- Johnson & Johnson subsidiary Aclarent settled allegations that it sold its Stratus device for unapproved uses.  Two former executives of that subsidiary also were found guilty of distributing misbranded and adulterated devices (see this post) 

The March of Legal Settlements Made by Pharmaceutical Companies is Diminishing - Presaging Even Less Accountablity for Top Health Care Organizational Leaders?

Introduction

We have long been discussing the legal settlements made by health care organizations of alllegations like fraud, bribery, and kickbacks.  Despite the unsavory nature of the behaviors revealed by most settlements, which often appeared to risk patient harms, the companies involved usually have had to pay fines that were tiny relative to their multi-billion dollar revenues.  They companies only seldom have had to admit responsibility, and almost never did a settlement cause company managers and leaders to  suffer any negative consequences for enabling, authorizing, directing or implementing the bad behavior.

So these settlements also provided a window onto the impunity of top leaders of health care organizations.  Lack of deterrence caused by such impunity appears to be a major cause of  the epidemic of continuing unethical behavior, crime and corruption on the part of large health care organizations.

However, at least these settlements seemed to be useful markers of the such bad behavior apparently sanctioned by the leadership of these organizations.  But now even these markers seem to be fading away. 

We had an ongoing enterprise trying to discuss what appeared to be the most interesting and significant legal settlements by major health organizations.  This year, however, things have seemed slow. Our last major wrap-up of recent legal settlements appeared on October 1, 2017.  On December 3, 2017, we did comment on a significant but barely noticed settlement by Pfizer of allegations of fraud done to prevent generic competition.  But since then it has seemed very quiet.

A new settlement by Pfizer was just announced yesterday.  This inspired me to review the files I had lying around, which did include a few US settlements by pharmaceutical companies from 2017 which I had not discussed.  However, I found nothing from 2018.  Fortuitously while I considered all this, I found a new article that corroborates my perception that things are changing, probably not for the better.  That I will discuss below. 

But first I will review the latest single entry in the march of legal settlements,   (Note that the missed 2017 cases appear at the end of this post in an Appendix.)

Pfizer Settled Charges of Giving Kickbacks to Patients Through Disease Advocacy Organization to Mask the Prices of Its Drugs

On May 24, 2018, Bloomberg reported a rather unusual case involving a company that has often provided grist for our mill,

Pfizer Inc. used a 'purportedly independent' charity to help it sharply raise the price of a heart drug, shielding patients from the increase while Medicare picked up the higher costs, the U.S. Justice Department said Thursday in a civil settlement announcement.

Pfizer will pay about $24 million in the anti-kickback settlement, the government said in a statement. It’s the latest agreement in a long-running U.S. investigation into drugmaker ties to patient charities. Pfizer will also enter into a five-year monitoring agreement with the Department of Health and Human Services Office of Inspector General.

In particular,

The Pfizer settlement is focused on three drugs: Sutent and Inlyta for kidney cancer, and the heart-rhythm drug Tikosyn. Sutent had U.S. sales of $374 million last year, while Inlyta sold $126 million. Tikosyn sold $153 million in 2016, according to the company.

In the case of the heart rhythm drug, Pfizer worked with the Patient Access Network Foundation to finance a fund for heart patients at the same time it was taking a huge price increase. The drugmaker raised the price of Tikosyn -- by 44 percent during the last three months of 2015, according to the government.

'Pfizer coordinated the timing of the opening of the fund for these patients with the implementation of a Tikosyn price increase,' the government said. For the next nine months, patients on the drug accounted for virtually all the beneficiaries of the charitable fund, the Justice Department said.

In 2015, Pfizer gave more than $10 million to the Patient Access Network Foundation, according to a summary by the drugmaker. It doesn’t specify how much of that went to the heart drug fund.

In the case of the kidney cancer drugs, the New York-based drugmaker worked with a third-party pharmacy company to steer patients to the foundation for financial help, instead of giving out free drug. It tracked data from the pharmacy to confirm that some that Pfizer’s donations were going to patients on its products, according to the Justice Department.

As is usual in legal settlements made by big health care organizations,

Pfizer said the settlement isn’t an admission of liability. None of the company’s executives were charged or fined.

So the company got to say

This resolution reflects the company’s desire to put this legal matter behind it and focus on the needs of patients,...

And the impunity of managers of big health organizations continues.

Also, the amount of money involved in the settlement, $24 million, seems to be a drop in the bucket compared to the money Pfizer was making from the drugs involved, thus making it unlikely to deter future bad behavior by Pfizer or other organizations.  

The settlement doesn’t mention price increases for the cancer drugs, which can cost tens of thousands of dollars a year. Inlyta currently costs about $239 per 5-milligram tablet, or more $14,000 a month, according to data compiled by Bloomberg Intelligence. Sutent costs more than $600 for a 50-milligram capsule, or more than $17,000 for a six-week treatment cycle that includes four weeks on the drug and two off.

It also is an even tinier drop in the bucket compared to Pfizer's revenues,which were $52.5 billion in 2017, according to Pfizer.

Finally, the settlement did not seem informed by Pfizer's long track record of bad behavior, including settlements almost too numerous to count, and involving billions in fines.  For our most recent summary of this, look here.   

But the settlement at least provided some insight into the clever, if likely unethical ways pharmaceutical companies are now using to maintain the extremely high prices of drugs, an important reason US health care is the most expensive, if not the best in the world.

But why have there been so few settlements in 2018 besides this one?  


Drop in Law Enforcement Targeting White Collar Crime Under the Trump Administration

Today, I also noticed the report of a study that provides a bit of evidence that my perception of recent diminution of the march of legal settlements was not far off.  It suggests that there has been a recent drop-off not just in settlements, but in law enforcement efforts targeting white-collar crime in general.

As reported by Bloomberg, with the headline, "White-Collar Prosecutions Fall to 20-Year Low Under Trump," on May 25, 2018,

The number of white-collar prosecutions is on track to hit a 20-year low under President Donald Trump, after reaching a high in 2011 during the Barack Obama administration, according to a nonprofit research center that analyzes government data.

A total of 3,249 cases were brought during the first seven months of the U.S. government’s 2018 fiscal year, which runs from October 2017 to April 2018, according to a case-by-case analysis of government data by Syracuse University’s Transactional Records Access Clearinghouse, or TRAC.

That’s a 4.4 percent drop from the same period in 2017, a decline of 33.5 percent from five years ago, and 40.8 percent fewer cases than in 1998, according to the report. The analysis is of data obtained by TRAC under the Freedom of Information Act.

Discussion

So my perceptions that the number of the sorts of legal settlements of interest to us has likely been diminishing was accurate.  Unfortunately, rather than the decrease being due to better behavior, decresed reporting, or my laxity in case-finding, it now looks that US government efforts to combat bad behavior by big health care corporations and to hold top leaders of these organizations accountable is getting even more lax.

So once again, with feeling...  

We seem to be sliding backwards in efforts to make the leaders of large health care organizations accountable, and particularly to combat the worse manifestation of their lack of accountability, impunity. 

The system appears to be rigged to favor of leadership and management of large companies, as opposed to health professionals, and particularly as opposed to patients.  For years now we have discussed stories like this, which include allegations of severe misbehavior by large health care companies affirmed by legal settlements, but which only involve paltry financial penalties to the companies, and almost never any negative consequences to any humans. Furthermore, as in this case, these stories are often relatively anechoic, noted often only briefly in the media, and have inspired no real action by the US government. 
  

This adds to the evidence suggesting that US health care, at least, is rigged to benefit its top insiders and cronies, and as such, is part of a larger rigged system.  We have previously discussed how market fundamentalism (or neoliberalism) led to deregulation, which enabled deception, fraud, bribery, and intimidation to become standard business practices, and allowed increasing concentration of power by large corporations. Managerialism allowed the top leaders of these corporations and their insider cronies to amass increasing power and money. Everyone else, other employees, stockholders of public corporations, customers, vendors and suppliers, and the public at large lost out.   In health care, these changes led to an increasingly costly system which produced increasingly bad results for patients and the public.  

 

We have called for years for what we sometimes term "true health care reform" to derig the system. Unfortunately, despite our hopes, perceptions of a rigged system may not always inspire honest reform. Instead, they can enable the rise of demagogues and would be dictators who promise only they can solve the problem.  Donald Trump cried out that only he could fix our problems and drain our swamps.  However, at least in terms of policing white-collar crime, particularly in health care, he seems to be letting the swamp waters rise.

While we thus have bigger problems to solve than the impunity of health care leaders, let us remember the need for wholesale, real health care reform that would make health care leaders accountable for what their organizations do, particularly when these organizations misbehave.


Appendix - For the Record, Previously Missed US Settlements from 2017 

(January) Shire paid $350 million to settle allegations that it gave kick-backs to physicians and clinics to promote Dermagraft, and promoted it for unapproved uses (per the Wall Street Journal) .  One unusual aspect of this case was that three executives of a Shire subsidiary which sold this product were also convicted.

(April) Sanofi agreed to pay $19.8 million to settle allegations it overcharged the US Department of Veterans Affairs (per Modern Healthcare).

(May) Merck and Upsher-Smith Laboratories agreed to pay $60.2 million to settle an anti-trust class action lawsuit alleging they conspired  to delay a generic version of a potassium product.  Note that the FTC had sued the companies over this matter, but lost their case. (per Reuters).

(June) Allergan agreed to pay $13 million to settle allegations that it paid kick-backs to promote sales of various opthalmic preparations (per the Philadelphia Inquirer).

A Higher Impunity - How Can we Reduce Health Care Leadership's Impunity When the President Claims His Own Impunity?

Impunity: an Introduction

We believe that unaccountable leadership is a major cause of health care dysfunction.  Impunity is an extreme form of unaccountable leadership.

We have noted that despite numerous legal settlements made by health care organizations of alllegations like fraud, bribery, and kickbacks, almost never do top leaders who presided over these actions face any negative consequences.  Lack of deterrence caused by such impunity appears to be a major cause of  the epidemic of continuing unethical behavior, crime and corruption on the part of large health care organizations. How executives got to the point of having such impunity has never been clear.

Timidity and lenience by regulatory agencies and law enforcement seem to be factors. For example, in 2014, we noted  that Attorney  General Eric Holder had previously been reluctant to go after big organizations because of the economic consequences of their failure:

The attorney general angered many last year when he reiterated those concerns at a congressional hearing, admitting 'that the size of some of these institutions becomes so large that it does become difficult for us to prosecute' because of the potential nasty economic effects of a major company failure.

In general we have seen much tougher enforcement directed against relatively small health care players than against bigger ones.  For example, we noted in 2014 that settlements by  Merck, Eli Lilly, Takeda, and Teva, all large pharmaceutical companies, allowed the companies to pay fines to settle allegations that they pushed dangerous products, while none of the executives who authorized, enabled, or directed these actions faced negative consequences.  In contrast, at that time, the CEO of a relatively tiny Sheffield Pharmaceuticals was convicted of a felonious wastewater discharge (see this post).

However, this rationale does not address the failure to pursue enforcement actions against organizational leaders who who enabled, authorized, directed or implemented misbehavior.  It is not that there are no good legal tools available to do so.  We wrote in 2012,

As we noted here, a Supreme Court case from 1943 empowered the government to seek penalties against responsible corporate officers (the "responsible corporate officer doctrine") who were in a position to stop a fraud that resulted in a guilty plea or conviction, particularly for the selling of misbranded or adulterated drugs into interstate commerce under the US Food and Drug Act.    Despite a threat made in 2010 by the chief counsel of the Inspector General's office of the US Department of Health and Human Services to use such legal authority to "get high level executives out of companies," nothing of the sort has happened.

Later, in 2015, under the previous administration, there was a tiny sign of progress against impunity.  Then, Attorney General Holder authorized the creation of a Corporate Strike Force to take strong actions in response to health care corporate fraud.  However, last year the Trump administration gutted even that small effort  (look here).

Why are efforts to reduce the impunity of health care corporate leaders going backward?  It may be because the very top leadership of the current administration, that is, the President himself, has long personally enjoyed his own impunity.


Examples of Donald Trump and Family's Apparent Impunity Before He Became President

As a wealthy businessman, Donald Trump and his family were often linked to apparently illegal activities, but seemed to avoid any intensive investigation, much less negative consequences.


A 2016 Politico article cataloged Trump's ties to organized crime, and found "Some of Trump’s unsavory connections have been followed by investigators and substantiated in court; some haven’t." Also,

Trump’s career has benefited from a decades-long and largely successful effort to limit and deflect law enforcement investigations into his dealings with top mobsters, organized crime associates, labor fixers, corrupt union leaders, con artists and even a one-time drug trafficker whom Trump retained as the head of his personal helicopter service.

We have found numerous examples, whic are below listed chronologically according to the time of occurrence of relevant events.

Trump Accused of Lying to Federal Investigators about his Mafia Connections in the 1980s

A WNYC piece from October, 2016, was based on an interview with a federal prosecutor who had investigated organized crime in the 1980s,

Attorney Kenneth McCallion was one of the federal prosecutors involved in that investigation. He says there appeared to be a sweetheart deal between the Teamsters Local 282 and Trump, where Trump would get a promise of cooperation from organized labor—including breaking up any strikes by minority workers—in exchange for no-show jobs, a lucrative concrete contract and a luxury apartment for the union president's girlfriend.

'After we indicted them, the Teamster leaders called a citywide strike, but there were two job sites they exempted from that. One was Trump Tower and the other was Trump Plaza,' McCallion said.

Yet despite this, Trump was never prosecuted.

'Even though Donald Trump lied to law enforcement about his relationship and lying to federal agents is a federal crime, he basically got a pass at that point,' he said.

Trump Accused in Legal Papers of Accepting Kickbacks, but the Charges were not Investigated

The 2016 Politico article also noted:

[An associate of a convicted racketeer] in court papers accused Trump of taking kickbacks from contractors, asserting this could 'be the basis of a criminal proceeding requiring an attorney general’s investigation' into Trump. Trump then quickly settled, paying the woman a half-million dollars.

No further investigation ensued.

After a Judge Found that he Conspired to Violate Fiduciary Duty and Committed Fraud, Trump was able to Settle with Details Sealed

Again in Politico,

In 1991, a federal judge, Charles E. Stewart Jr., ruled that Trump had engaged in a conspiracy to violate a fiduciary duty, or duty of loyalty, to the workers and their union and that the 'breach involved fraud and the Trump defendants knowingly participated in his breach.' The judge did not find Trump’s testimony to be sufficiently credible and set damages at $325,000. The case was later settled by negotiation, and the agreement was sealed.

It is not clear that Trump was personally responsible for paying whatever the settlement entailed.  No criminal charges apparently followed.  

Applying for a Casino License, Trump Failed to Disclose he was Under Grand Jury Investigation, but Later Kept his License

As also reported by Politico, when Trump was trying to obtain a license for a New Jersey gambling casino,

Trump was required to disclose any investigations in which he might have been involved in the past, even if they never resulted in charges. Trump didn’t disclose a federal grand jury inquiry into how he obtained an option to buy the Penn Central railroad yards on the West Side of Manhattan. The failure to disclose either that inquiry or the Cody inquiry probably should have disqualified Trump from receiving a license under the standards set by the gaming authorities.

But it didn,'t. And despite the fact that

Once Trump was licensed in 1982, critical facts that should have resulted in license denial began emerging in Trump’s own books and in reports by Barrett—an embarrassment for the licensing commission and state investigators, who were supposed to have turned these stones over. Forced after the fact to look into Trump’s connections, the two federal investigations he failed to reveal and other matters, the New Jersey Division of Gaming Enforcement investigators circled the wagons to defend their work. First they dismissed as unreliable what mobsters, corrupt union bosses and Trump’s biggest customer, among others, had said to Barrett, to me and other journalists and filmmakers about their dealings with Trump. The investigators’ reports showed that they then put Trump under oath. Trump denied any misconduct or testified that he could not remember. They took him at his word. That meant his casino license was secure even though others in the gambling industry, including low-level licensees like card dealers, had been thrown out for far less.

Trump's Casino Company Paid Multiple Fines for Violating Regulations, but Trump was not Personally Sanctioned 

An Atlantic article from January, 2017, stated,

Trump has been repeatedly fined for breaking rules related to his operation of casinos. In 1990, with Trump Taj Mahal in trouble, Trump’s father Fred strolled in and bought 700 chips worth a total of $3.5 million. The purchase helped the casino pay debt that was due, but because Fred Trump had no plans to gamble, the New Jersey gaming commission ruled that it was a loan that violated operating rules. Trump paid a $30,000 fine; in the end, the loan didn’t prevent a bankruptcy the following year. As noted above, New Jersey also fined Trump $200,000 for arranging to keep black employees away from mafioso Robert LiButti’s gambling table. In 1991, the Casino Control Commission fined Trump’s company another $450,000 for buying LiButti nine luxury cars. And in 2000, Trump was fined $250,000 for breaking New York state law in lobbying to prevent an Indian casino from opening in the Catskills, for fear it would compete against his Atlantic City casinos.

Also, while Trump was attempting a hostile take-over of a rival casino,

the Federal Trade Commission fined him $750,000 for failing to disclose his purchases of stock in the two companies, which exceeded minimum disclosure levels.

Trump and Family were Accused of Self-Dealing and Accepting Illegal Donations while Operating the Trump Foundation, but were not Individually Penalized

Also reported by the Atlantic,

The [Trump] foundation appears to have broken IRS rules on 'self-dealing” by paying to resolve the legal disputes as well as buying a portrait of Trump and a Tim Tebow helmet that went back to the Trump family. In November, in tax filings posted online, the Trump Foundation said it had violated self-dealing rules in 2015 and in previous, indeterminate, years. On the donation, Trump and Bondi both say there was no quid-pro-quo, but the donation was an illegal one for a charitable nonprofit, and the foundation had to pay a $2,500 fine. Liberal watchdog group Citizens for Responsibility and Ethics in Washington charges other laws may have been broken as well. New York Attorney General Eric Schneiderman has reportedly launched an investigation into the foundation. Schneiderman has also informed the foundation that it is in violation of rules on fundraising and ordered it to quit. Trump has announced plans to shutter his foundation, but reportedly cannot do so while it is under investigation.

Yet so far no person has been charged with any related violations. Note that it appears that Trump may have had leverage on Mr Schneiderman, who has now resigned (see below).  Although there were reports in 2017 that the Foundation was going to shut down, as of March, 2018, according to an article in The Hill, the ranking Democratic member of the House Oversight and Government Reform Committee was still trying to get records related to the self-dealing described above from the leadership of the apparently still existing foundation (look here). 

Trump's Taj Mahal Casino Was Fined for Breaking Rules about Money Laundering, but Trump Paid no Penalties

A May, 2017, CNN story stated,

The Trump Taj Mahal casino broke anti-money laundering rules 106 times in its first year and a half of operation in the early 1990s, according to the IRS in a 1998 settlement agreement.

It's a bit of forgotten history that's buried in federal records held by an investigative unit of the Treasury Department, records that congressional committees investigating Trump's ties to Russia have obtained access to, CNN has learned.

The casino repeatedly failed to properly report gamblers who cashed out $10,000 or more in a single day, the government said.

Trump's casino ended up paying the Treasury Department a $477,000 fine in 1998 without admitting any liability under the Bank Secrecy Act.

There is no record suggesting anyone looked into Trump's involvement with these violations. Note that

The 1998 settlement was publicly reported at the time, and the Associated Press noted it was the largest fine the federal government ever slapped on a casino for violating the Bank Secrecy Act.

However,

But key details of the casino's cash reporting violations are missing from the publicly released documents, including the identities of the gamblers and casino employees involved in the transactions.

Then, in 2015, FINCEN publicly announced:

The Financial Crimes Enforcement Network (FinCEN) today imposed a $10 million civil money penalty against Trump Taj Mahal Casino Resort (Trump Taj Mahal), for willful and repeated violations of the Bank Secrecy Act (BSA). In addition to the civil money penalty, the casino is required to conduct periodic external audits to examine its anti-money laundering (AML) BSA compliance program and provide those audit reports to FinCEN and the casino’s Board of Directors.

Trump Taj Mahal, a casino in Atlantic City, New Jersey, admitted to several willful BSA violations, including violations of AML program requirements, reporting obligations, and recordkeeping requirements. Trump Taj Mahal has a long history of prior, repeated BSA violations cited by examiners dating back to 2003. Additionally, in 1998, FinCEN assessed a $477,700 civil money penalty against Trump Taj Mahal for currency transaction reporting violations.

'Trump Taj Mahal received many warnings about its deficiencies,' said FinCEN Director Jennifer Shasky Calvery. 'Like all casinos in this country, Trump Taj Mahal has a duty to help protect our financial system from being exploited by criminals, terrorists, and other bad actors. Far from meeting these expectations, poor compliance practices, over many years, left the casino and our financial system unacceptably exposed.'

Trump Taj Mahal admitted that it failed to implement and maintain an effective AML program; failed to report suspicious transactions; failed to properly file required currency transaction reports; and failed to keep appropriate records as required by the BSA. Notably, Trump Taj Mahal had ample notice of these deficiencies as many of the violations from 2012 and 2010 were discovered in previous examinations.

Again, there is no record of any negative consequences for Mr Trump

Trump Made False Statements Under Oath, but was not Charged with Perjury

A Mother Jones article published February, 2016, recounted that in connection with a libel suit Mr Trump filed against journalist Timothy O'Brien alleging O'Brien under-reported Mr Trump's wealth,

In 2007—two years before a New Jersey judge tossed out the case—Trump was questioned during a deposition. Over the course of the two-day-long interrogation, Trump was forced repeatedly to acknowledge having made false statements. And at one point, a lawyer for O’Brien and his publisher asked Trump a straightforward question: Have you ever before associated with individuals you knew were associated with organized crime?'

Trump, who was testifying under oath, answered, 'Not that I know of.'

That was a clear and unequivocal response. But it was not true. Two years earlier, O’Brien had interviewed Trump and specifically asked him about Sullivan and Shapiro. O’Brien, now an editor and writer at Bloomberg, has provided Mother Jones with a transcript of the interview, and it conclusively shows that Trump believed that these two men were associated with organized crime....

Trump: They were tough guys. In fact, they say that Dan Sullivan was the guy that killed Jimmy Hoffa. I don’t know if you ever heard that.

O’Brien: I have heard that. And that he was, you know…

Also,

Trump: I just was able to handle them. And I, really, I was able to handle them. I found Sullivan to be the tougher of the two. I started hearing reports about Sullivan, that he killed Jimmy Hoffa….

Also,

O’Brien: What was Shapiro like?

Trump: He was like a third-rate, local, real estate mob guy. Nothing spectacular. And I, you know, I got lucky. I heard a rumor that Sullivan, because Sullivan was a great con man, I heard a rumor that Sullivan killed Jimmy Hoffa. And because I heard that rumor I kept my guard up. You know, I said, 'Hey, I don’t want to be friends with this guy.'

So here was Trump connecting Sullivan to the Hoffa murder and calling Shapiro a 'mob guy.'

The same article also asserted that Trump lied in a deposition about knowing and working with Felix Sater, who who "had once been involved in a Mafia-linked stock swindle," and who "had worked with the Trump Organization."

Ivanka Trump and Donald Trump Jr Escaped Indictment for Fraud

As reported by the New Yorker in October, 2017, despite considerable evidence that the two children of Donald Trump had misled potential buyers of Trump SoHo condominiums, Cyrus Vance, the Manhattan District Attorney overruled his staff by halting an investigation of them in 2010.  Later, the Trumps' attorney, Marc Kasowitz, made a large donation to Mr Vance's campaign.   

Trump University Settled Fraud Allegations, Trump Not Charged

As reported by the New York Times in 2017, "the final settlement of allegations that 'Trump University students had been cheated out of thousands of dollars in tuition through high-pressure sales techniques and false claims about what they would learn" was approved by a judge. Litigation about these allegations had gone on for years, but after his election in November, Mr. Trump reversed course and agreed to pay $25 million to resolve the litigation. He did not admit fault, and he maintained in posts on Twitter after the settlement announcement that he "did not have the time to go through a long but winning trial on Trump U."

The settlement resolved lawsuits brought by the Attorney General of New York, Eric Schneiderman, among others.  However, Mr Trump was never charged with a crime by Mr Schneiderman among others.  There is some reason to think Mr Trump took actions to ensure his impunity.

According to Bloomberg on May 11, 2018,

Back in 2013, Donald Trump was exploring a presidential run. His Trump University was in the crosshairs of New York’s crusading attorney general. Around the same time, Trump and his personal lawyer got an interesting piece of information: Eric Schneiderman, the AG, was accused of sexually abusing two women.

The details of the accusations were not made public at that time, but later,

Trump took aim at Schneiderman in a tweet on Sept. 11, 2013, that also referred to New York politicians who’d resigned over allegations of sexual misconduct, Anthony Weiner and Eliot Spitzer.

'Weiner is gone, Spitzer is gone -- next will be lightweight A.G. Eric Schneiderman. Is he a crook? Wait and see, worse than Spitzer or Weiner,' Trump tweeted.

Mr Schneiderman never brought criminal charges against Mr Trump.  Could it be that he was made aware that Trump had information about Schneiderman's sexual behavior that he could use against him? This month, the allegations of his sexual misconduct were finally made public and he then resigned.  The settlement, again absent any charges against Mr Trump, was approved in March, 2017.

Summary of Trump's Pre-Presidency Impunity

While Trump's firms have had to pay multiple fines for breaking rules and laws, and Trump and the immediate family members who work with him in the Trump Organization were credibly accused of multiple types of wrong-doing, including various apparent crimes, neither Trump nor his family members were ever indicted, or apparently investigated for crimes. 

President Trump's Arguments That He Has De Jure Impunity

Since he was elected, President Trump and his proxies have asserted he now has de jure impunity that seems to go well beyond the sort of de facto impunity he enjoyed as a wealthy and powerful businessman and celebrity.  Note that none of these statements attempted to deny that he had or would violate laws.  They were all assertions that President Trump is not subject to the rule of law.

Examples appear again in order of apparent occurrence.


Trump Said He is Not Subject to Laws on Conflicts of Interest.

 As reported by CNN in November, 2016:

Donald Trump said on Tuesday that he faces no legal obligation to cut ties with his businesses, even as he described how winning the presidency has made his brand 'hotter' and acknowledged advancing his business interests during a conversation with a British politician.

'The law's totally on my side, the president can't have a conflict of interest,' Trump said in an interview with New York Times editors and writers.

Trump said he was surprised by how little was legally required of him. 'In theory I could run my business perfectly and then run the country perfectly. There's never been a case like this,' he said. 'I'd assumed that you'd have to set up some type of trust or whatever and you don’t.'

Yet,

It’s true that federal conflict-of-interest laws exempt the president, and he’ll have the power to change White House ethics rules. But there remains a constitutional ban on accepting payments from foreign governments, as well as anti-corruption laws against bribery and fraud.

Trump Stated His Personal or Family Finances Cannot be Subjects of Investigation

In an interview with the New York Times in July, 2017, he responded to a question:

SCHMIDT: Last thing, if Mueller was looking at your finances and your family finances, unrelated to Russia — is that a red line?

HABERMAN: Would that be a breach of what his actual charge is?

TRUMP: I would say yeah. I would say yes. By the way, I would say, I don’t — I don’t — I mean, it’s possible there’s a condo or something, so, you know, I sell a lot of condo units, and somebody from Russia buys a condo, who knows? I don’t make money from Russia. In fact, I put out a letter saying that I don’t make — from one of the most highly respected law firms, accounting firms. I don’t have buildings in Russia. They said I own buildings in Russia. I don’t. They said I made money from Russia. I don’t. It’s not my thing. I don’t, I don’t do that. Over the years, I’ve looked at maybe doing a deal in Russia, but I never did one. Other than I held the Miss Universe pageant there eight, nine years [crosstalk].

SCHMIDT: But if he was outside that lane, would that mean he’d have to go?

[crosstalk]

HABERMAN: Would you consider——

TRUMP: No, I think that’s a violation.

A typical interpretation of this rather incoherent response was in The Hill,

President Trump warned special counsel Robert Mueller from investigating his family’s finances beyond the scope of the probe into ties between his administration and Russia in an interview with The New York Times on Wednesday.

'I think that’s a violation. Look, this is about Russia,' Trump told the Times.

Trump during the interview said he wasn’t ruling out firing Mueller as special counsel on the probe into Russian meddling in the presidential election.

He did not say that he would order the Justice Department to fire Mueller or under what circumstances he would fire him, but he indicated Mueller investigating his family's finances would cross a line.

Trump's Attorney Argued that a President Cannot be Charged with Obstructing Justice

An article in Axios from December, 2017, strated

John Dowd, President Trump's outside lawyer, outlined to me a new and highly controversial defense/theory in the Russia probe: A president cannot be guilty of obstruction of justice.

The 'President cannot obstruct justice because he is the chief law enforcement officer under [the Constitution's Article II] and has every right to express his view of any case,' Dowd claims.

However, a Washington Post article published on May 18, 2018, stated that Mr Trump's current attorney is not so sure about that,

But apparently [current Trump laywer Rudy] Giuliani disagrees. Trump's own lawyer said Friday that his client is not immune from charges of obstructing justice — which is clearly the most troubling part of special counsel Robert S. Mueller III's investigation for Trump personally. While Trump hasn't been directly linked to potential collusion with Russia, he has taken many actions as president that have caught Mueller's attention and could feasibly be seen as trying to influence the course of the investigation. So whether Trump can technically obstruct justice at all is a key point, and it's one Giuliani just conceded.

Trump's Attorneys Argued He Is Immune from Civil Court Proceedings while President

They had argued that he has immunity from lawsuits as President, but as Reuters reported this month,

A New York state judge on Tuesday said U.S. President Donald Trump must face a defamation lawsuit by a woman who accused him of sexually harassing her after she appeared on his former reality TV show.

The decision by Justice Jennifer Schecter of the New York state court in Manhattan in favor of California restaurateur Summer Zervos, a former contestant on NBC’s 'The Apprentice,' raises the prospect that Trump might have to answer embarrassing questions in court about his behavior toward women.

She rejected Trump’s claim that he was immune from being sued, finding 'absolutely no authority' to dismiss litigation related 'purely to unofficial conduct' solely because he occupied the White House.

'No one is above the law,' the judge wrote.

Trump's Attorney Asserted He Cannot be Forced to Testify in Court

As reported by Reuters two days ago, on May 17, 2018, President Trump's current lawyer Rudolf Giuliani:

told Fox News Thursday morning not just that the special counsel cannot indict President Trump but that Mueller’s team cannot even subpoena the president to appear before a grand jury. Giuliani’s theory is that if the president cannot be prosecuted, he cannot be called to testify in an investigation of his conduct.

'We’re pretty comfortable, in the circumstances of this case, they wouldn’t be able to subpoena him personally,' Giuliani said. 'They could probably require documents to be produced. That’s what was required of Nixon. We’ve provided 1.4 million documents. They probably could require you to testify in a civil case, possibly even as a witness in a criminal case, but they can’t require you to testify in what would be your own case.'

However,

I talked Thursday to eight lawyers who’ve been involved in previous probes of U.S. presidents. Every one of them said Giuliani’s theory is incorrect.

Some of them had quite strong words.

George Conway wrote the Supreme Court briefs for Bill Clinton accuser Paula Jones in the case that led to a unanimous ruling from the justices that the Constitution does not shield presidents from testifying in certain civil suits. He said Giuliani’s assertion that President Trump cannot be subpoenaed is 'drivel.'

Lawrence Robbins, who represented White House officials in the Whitewater investigation, said Giuliani’s theory is 'facially preposterous.'

Solomon Wisenberg, who worked on the Whitewater probe of Clinton, called the theory 'delusional.'

Summary

Unaccountable leadership, particularly leadership with impunity, has been a major feature of modern US health care, and probably explains the continuing bad behavior, including criminally bad behavior and outright corrupt behavior ongoing in US health care organizations. While the US government began to address impunity in the last few years, those efforts have apparently halted during the current Trump regime.  Given President Trump's long record of personal impunity during his career as a wealthy and prominent businessman, and his assertions that as President he is above the law, that should be no surprise.

Yet, true health care reform requires well-informed leaders who uphold health care professionals' values, put patient's and the public's health ahead of all other considerations, avoid self-interest and conflicts of interest, are honest and ethical, and surely are not corrupt.  They need to work in the context of a government that is of, by and for the people, not of, by and for a demagogic leader.

In these times, true health reform is not possible under the current president. We will watch health care dysfunction continue to grow, and patients' and the public's health continue to decline until someone new takes the oath of office.