Tuesday, August 13, 2013

Pfizer Does It Yet Again—More Perpetrator-less Corporate Crime


Once again to defer to Dr. Roy Poses at the Health Care Renewal blog:


--on an issue we also have blogged about in the past:


--it seems that Pfizer has yet again settled with the Feds, in this case actually going so far as to admit guilt, in relation to a $491M claim over illegal marketing of the drug Rapamune. This drug, manufactured by Wyeth, which Pfizer bought out, was approved for use to prevent immune rejection only in kidney transplants, and data show that it causes serious risks when used in other organ transplants. Nevertheless Pfizer now admits that Wyeth illegally marked the drug for different sorts of organ transplants, to the extent that 90% of the firm’s revenue from Rapamune resulted from non-kidney uses. (Sounds like a pretty effective marketing campaign to me, even if illegal.)

Dr. Poses makes the excellent point, even if it’s a broken record that he’s getting tired of playing, that just as we sometimes talk about “victimless crimes,” the drug industry seems to have teamed up with Federal prosecutors to perfect perpetrator-less crime. A firm is caught doing illegal stuff and settles for huge sums of money—but no actual human beings ever seem to be responsible, much less get punished for their misdeeds. Apparently both Wyeth and Pfizer are operated robotically and no actual person ever takes charge of any decisions.

Pfizer, while admitting guilt, acted like all this is water under the bridge anyway because of course, this crime was not committed by sterling and pure Pfizer, it rather was committed by that nasty, evil company Wyeth, which by the way no longer exists as a separate entity. Which leads to the question of what happens when a company like Pfizer decides whether or not to buy a company like Wyeth. I am of course far from being a business tycoon, but in my state of ignorance I imagine it goes something like this. Pfizer looks at Wyeth’s assets and at its liabilities, and decides on a purchase price based on how both balance out. Among the liabilities, the buyer looks at any future legal actions that might be pending or that it can anticipate. It sets the purchase prices such that if it ends up paying out a lot of money in a legal settlement—just say, to take a wild hypothetical example, $491M—it has paid a low enough price for the bought company so that the assets it acquires makes up for whatever it has to pay out in the legal settlement(s). I assume that’s how business is done. So that seems to make Pfizer a full participant in the process. And any claim that it had nothing at all to do with any chicanery sounds pretty hollow.

The other question, of course, is how this fits with any patterns of long-standing behavior on Pfizer’s part. Dr. Poses admits that by now he’s lost count of how many times Pfizer has had to settle with the Feds over alleged or actual wrongdoing. He adopts the term “umpteenth” as the best count he can manage. And of course, each time it happens, Pfizer promises on its grandmother’s grave never to do it again.

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