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working to draft a bill that would retroactively rectify the mistake. The Patent and Trademark Office’s director has said that the legislation, if enacted, would apply to only one drug. Guess which one?
Tax Evasion. Several companies have paid huge fines for practices in which they funneled money offshore to hide cash from US tax authorities. Schering-Plough lost a $437 million tax case in New Jersey for parking money in Ireland, and Merck has to pay $2.3 billion to the IRS for tax avoidance in Bermuda.
Putting Words in Your Politician’s Mouths. Portions of speeches given by lawmakers debating healthcare reform that found their way into the Congressional Record have been traced to lobbyists working for Genentech. The company estimated that 22 Republicans and 20 Democrats picked up on language crafted by their lobbyists. While some of these politicos received contributions from the company or were beneficiaries of fundraising efforts, according to Genentech “there was no connection between the contributions and the statements”.
Bribing Foreign Officials. This can certainly facilitate selling drugs in their countries. The US Justice Department has promised to crack down on pharma providing foreign officials with cash, gifts, travel, meals, entertainment, etc. This is an extension, of course, of good old-fashioned domestic bribes. Biovail Pharmaceuticals agreed in 2009 to pay nearly $25 million in criminal and civil fines for compensating doctors to prescribe or recommend one of their drugs.
Failure to Complete Clinical Studies. Between 1992 and 2008 the FDA asked drug makers to complete 144 clinical studies in support of 90 drug applications, according to the Government Accountability Office. These applications were part of a program intended to speed drugs to patients with life-threatening illnesses. Fifty-two of the studies remain uncompleted, with 15 pending for more than five years and several others by more than eight years.
Hiding Payments to Doctors. This is another widespread industry practice that has forced a number of companies to recently change their practices. The Institute of Medicine recently issued a report about the need to adopt “conflict of interest policies” to avoid perceptions that would serve “to undermine public confidence in medicine”.
A 2007 survey by the marketing research firm Ipsos revealed that only about one-third (35 percent) of Americans had a favorable opinion of the pharmaceutical sector. Does the industry acknowledge that it has not only an image problem, but an ethical problem as well? Both Pfizer CEO Jeff Kindler and Merck CEO Richard Clark have given speeches in the past year recognizing the need to regain the public trust. It would seem that the first step in such a campaign would be to curtail the corrupt practices detailed above.
Whether the industry is capable of reforming itself remains to be seen, and, given the examples cited above, would clearly be a huge undertaking. Huge amounts of money are at stake, the industry isn’t monolithic, and the companies are spread out over a large number of countries. Reining in the excesses of all of its members is unrealistic. However, they need to seriously examine their actions and put in place industry-wide reforms if they hope to regain the public trust.
In the meantime, I’ll get the popcorn popping in anticipation of next month’s release of Extraordinary Measures, a film (inspired by a true story) that stars Harrison Ford as a researcher enlisted by desperate parents seeking to cure their children’s rare disease. Sound familiar? Harrison Ford may be a fine actor, but I’m betting he’s no Don Suddaby.
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