September 25th, 2012 9:15am
Scientific advancements in the field of pharmaceuticals have helped saved countless lives over the last century. Diseases that once were considered a death sentence are now treated with a handful of pills or a quick vaccine. But there is a darker side to the industry – those working in the laboratories developing life-saving drugs might be concerned with saving lives, but its an entirely different story in the board rooms of these multi-national drug companies.
A culture of both greed and corruption, the model of putting profits ahead of patients, has resulted in a slew of faulty, dangerous, and wholly untested drugs to be pushed onto consumers. Because of this, we now have people who die from supposedly safe birth control products, arthritis medications, and anti-depressants. The prevention and treatment of non-fatal conditions is killing people across the globe.
Given this information, its no surprise that a recent report by the UK’s The Independent has revealed that the global pharmaceutical industry has been slapped with $11 billion worth of fines in just the last three years. These fines were all the result of “criminal behavior,” which includes withholding relevant safety information about drugs and marketing drugs for off-label uses.
GlaxoSmithKline received the largest amount in fines, according to The Independent, bringing their total to $3 billion. Pfizer was close behind with fines totaling $2.3 billion in the last three years.
While these seem to be staggering amounts, they are merely “the cost of doing business” for massive pharmaceutical companies. The Glaxo fine amounted to a mere 10.8% of the company’s yearly revenue. Break that down over the three-year period, and the company is paying under 4% of their yearly revenue in fines. Similar figures apply to other companies as well.
The Independent’s story highlights a massive problem within the industry – no single person is held accountable. While the fines are meant to “punish” the corporation as a whole, individual decisions are made by individuals, or at least groups of individuals. These people knowingly commit crimes and yet not a single person has gone to prison for their blatant disregard for human life and the rule of law.
But what the story missed was why these crimes are able to happen in the first place. In the United States, the pharmaceutical industry spent more than $700 million on lobbying and political donations during the same three-year period that they racked up $11 billion in criminal fines. This money has allowed them unbridled influence over politicians in Washington.
But the trail gets a little hazy when you look past the millions of dollars. After all, money can buy power and influence, but it can’t always buy you a way out of prison. So what the pharmaceutical industry has done in Washington, D.C. is to place their own former executives and insiders into positions of regulatory power, particularly within the Food and Drug Administration (FDA.) For years, a revolving door has existed between the industry and the Administration, where executives either go from industry into the regulatory agency or vice versa. This allows pharmaceutical companies to control the system from the inside.
The best example of how this practice corrupts medicine – and helps poison American consumers – is the story of Vioxx. Vioxx manufacturer Merck knew that their product was dangerous for consumers, but the FDA that former president George W. Bush stacked with industry insiders allowed it to remain on the market until a swath of lawsuits forced the company to recall the drug. But not long after the recall, the industry-packed FDA once again approved the drug, opening the door for even more patients to become victims.
And what happened to Merck as a result? They paid out $4.8 billion in criminal fines and lawsuit settlements, which was equivalent to about two year’s worth of profits from Vioxx sales. The rest of the profits from the deadly drug went back into the pockets of shareholders.
In an interview, Mike Papantonio, president of the National Trial Lawyer Association and senior partner at the firm of Levin, Papantonio, Thomas, Mitchell, Rafferty, and Proctor, says that the criminal conduct of these corporations is the result of their years of destructive influence in Washington, D.C. “The corrupt, criminal nature of these corporations is clearly visible in their efforts to deregulate the industry from the inside out. By removing the regulatory hurdles that they once had to overcome, they are able to push faulty products onto Americans – Their only motive is profit, consumers-be-damned,” said Papantonio.
The fines imposed on the industry are not enough to keep them accountable for their actions. In fact, according to Papantonio, these fines and legal fees are actually calculated into the companies’ budgets, and as long as the profits continue to exceed the penalties, it remains unlikely that their operations will change.
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