Americans have long enjoyed a good villain. From Congress to Wall Street, lawyers to lobbyists, we love to hate.
In some cases, we just sort of dislike what they stand for or have some “feeling,” backed up by evidence (or not) that these various scoundrels aren’t really looking out for what is in most of our best interests.
But in certain cases, like with pharmaceutical companies, it can be a well-earned fury documented by years of proven malfeasance.
Yes, that’s right — our pharmaceutical companies have repeatedly been shown to be criminals. Yet even that doesn’t mean that individual executives have, or even should, “serve time” as some have advocated. These are businesses that are also international industry leaders creating amazing, lifesaving and ingenious products.
Yet there is no question that the depth of the wrongdoing can sometimes overshadow even those sorts of miraculous feats. Billions in criminal fines were paid last year alone for bribing pharmacists and promoting toxic off-label uses. So what to do with those who violate the law?
First, to be clear, I am not just talking about civil judgments like Pfizer settling a lawsuit in December 2011 for almost $73 million after one of their products was alleged to have caused breast cancer. In 2012 alone, Pfizer had to deal with 10,000 lawsuits related to HRT, or hormone replacement therapy.
In May, they announced that they had shelled out $896 million to deal with 6,000 cases, and had set aside $330 million for the remaining 4,000. A spokesperson for Pfizer said:“The decision to settle cases reflects a business decision by the company to avoid the cost and distraction of prolonged litigation.”
Pharmaceutical companies get sued all the time, sometimes with more merit than others. Drugs will sometimes be put on the market too quickly or without adequate warnings, while at other times overly aggressive class action lawyers are looking for “deep pockets” for shallow violations. Regardless, a civil judgment doth not make thee a criminal.
But GlaxoSmithKline LLC pled guilty in a criminal case in July 2012. It was accused of bribing doctors, pushing antidepressants on children, and lying about the risks of one of their diabetes drugs, as well as improper marketing of six other drugs.
Criminal? Apparently. They pleaded guilty to three misdemeanor violations of the Food, Drug and Cosmetic Act: two counts of misbranded drugs (one due to misleading marketing, and the other to inadequate directions for use), and one count of failure to report data to the FDA.
Even though the scandal was billed as the “largest health care fraud settlement” in U.S. history at $3 billion dollars, Larry Bodine, Editor-in-Chief of Lawyers.com, wrote that ”to a massive criminal operation like Glaxo, the fines amount to a speeding ticket. Admitting to meaningless criminal charges and paying penalties for poisoning consumers is just a cost of doing business.”
And they’re not alone: Also in 2012, Abbott Laboratories settled for $1.6 billion over improper marketing of Depakote, an antiseizure drug. They also pleaded guilty to a misdemeanor count of misbranding. Biotech company Amgen Biotech pleaded guilty in December to a misdemeanor count of misbranding the drug Aranesp and paid $762 million to settle a series of lawsuits.
Johnson & Johnson reportedly settled with the Justice Department for $2.2 billion over sale of certain drugs including the antipsychotic Risperdal, which caused some men and boys to grow breast tissue. At least two state courts found that they deceptively marketed that drug as well.
These are just from 2012 and stem from the False Claims Act of 1863, the government’s primary civil remedy to redress false claims.
But individual executives have rarely been charged in these cases and that infuriates some, who argue that without striped suits for the “suits,” there is no incentive to choose morals over money. But if the wrongdoers are driven by money, why isn’t a personal financial punishment the way to “make it about money”? Unlike jail time for top officials at these corporations, there are other less draconian options like hitting them where we claim they are thinking from — their pockets.
The GlaxoSmithKline settlement, for example, includes a clause changing their executive compensation program, allowing the company to recoup bonuses or other financial incentives from executives found to be engaging in illicit behavior. They will also now maintain certain compliance programs for employees, including abolishing incentive-based compensation for sales representatives and overseeing reporting of scientific data.
Not every type of bad or even “criminal” behavior need result in jail time. If we believe that these executives are thinking about the bottom line instead of the ethical line, let’s keep the punishment focused there — on their wallets. Criminal fines are there for a reason; now, maybe we just need to make them a little more personal.
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