Capital G Award: Big Pharma, Agents for Fraud

Fraud is one of big-Pharma’s most profitable endeavours. Just consider Pfizer Inc., which is the world’s largest pharmaceutical company with approximately $50 Billion in annual revenue. This past September (2009), BusinessWeek reported that Pfizer, “plead guilty to one felony count to settle federal criminal and civil charges that it illegally promoted its Bextra painkiller and other drugs.” The admission of guilt comes with the largest criminal fine ever imposed in US history; $2.3 Billion. Pfizer will pay a criminal fine of $1.195 Billion, $1 Billion to resolve civil claims, and will enter a corporate integrity agreement with US HHS, which will monitor the company’s future marketing activities.

The same BusinessWeek article summarizes the underlying rational for the 2009 fines:

The settlement stems from a four-year investigation instigated by six whistleblowers, who between them will receive $102 million from the federal fines. The complaint charged that Pfizer sent doctors on all-expense-paid trips to resorts, gave out free massages, and paid kickbacks to doctors, all to get them to prescribe its drugs for off-label uses. Although it is legal for physicians to write such prescriptions, and a common practice, companies are barred from actually promoting their drugs for purposes other than those that have won Food & Drug Administration approval.

Pfizer however, has proven itself to be a recalcitrant corporate criminal, with no less than four additional settlements since 2002 resulting in $513 million in fines.

This past March, Pfizer was found guilty by an eight person jury for “engaged in a racketeering conspiracy over a 10-year period” Evidence provided during the trial found that Pfizer’s own studies showed that the drug in question, Neurontin, was completely ineffective and had no more effect than a placebo; a fact which Pfizer never disclosed to either doctors or patients. The jury described the activities conducted by Pfizer as pure fraud, a violation of RICO statutes, and California’s Unfair Competition Law. Under RICO, the initial damages found by the jury -$47.36 million- were tripled; i.e. $142.1 million in total.

Lawyers for the plaintiff, Kaiser-Permanente of California, described the verdict as a “triumph for evidence-based medicine over marketing-based medicine.”

Pfizer isn’t alone it is morbid fascination with bilking the sick and pushing useless products onto desperate people. Since May 2004, Pfizer, Eli Lilly & Co., Bristol-Myers Squibb Co. and four other drug companies have paid a total of $7 Billion in fines and penalties. Six of the companies admitted in court that they marketed medicines for unapproved uses.

Eli Lilly, an American based pharmaceutical company with annual revenue of $20 Billion was charged and fined by the US government $1.42 Billion, for bribing doctors to prescribe a schizophrenia drug, Zyprexa, to elderly patients suffering from dementia, despite clinical trial data, which indicating a death rate of 31 people out of 1,184 participants (double the placebo rate). Bloomberg News describes that, “Lilly already had a criminal conviction for misbranding a drug when it broke the law again in promoting schizophrenia drug Zyprexa for off-label uses starting in 1999.”

In September 2007, New York-based Bristol-Myers paid $515 million -without admitting or denying wrongdoing- to federal and state governments in a civil lawsuit brought by the Justice Department.

Impact of Fines

The deterrence factor of imposing these fines, even those in the Billon dollar range, is in question. For example, Zyprexa provided Lilly with $36 Billion in revenue from 2000 to 2008. A fine of a Billion dollars does not offset the profits to be made from off-label marketing. Bloomberg further elaborates:

The $2.3 Billion in fines and penalties Pfizer paid for marketing Bextra and three other drugs cited in the Sept. 2 plea agreement for off-label uses amount to just 14 percent of its $16.8 Billion in revenue from selling those medicines from 2001 to 2008.

The total of $2.75 Billion Pfizer has paid in off-label penalties since 2004 is a little more than 1 percent of the company’s revenue of $245 Billion from 2004 to 2008.

Lon Schneider, a professor at the University of Southern California’s Keck School of Medicine, states that Big-Pharma won’t stop pursuing this strategy of fraud and deceit. He argues that, “They’re drivers that knowingly speed. If stopped, they pay the fine, and then they do it again.”

Capital G Award: The Music Industry

The first official recipient of the "Capital G" Award for unbridled greed and dishonesty goes to the bete-noire of all dormitory-insulated students and MP3 toting technophiles, the music industry and its copyright shrieking attack dogs (my apologies to most canines).

You’re saying: “Man… isn’t Kenney ‘Boy’ Lay and friends, who is magnificently framed in the adjacent picture, and who stole billions from customers and shareholders or the recent wave of corporate frauds doing their perp-walk into US Congressional hallways for further public handouts, more worthy recipients?” Indeed they are, but lets not bite off too much our first time mon ami.

Every decade in the twentieth century had specific sounds and creative elements that both inspired youth and infuriated cultural conservatives. At the turn of the century, black musicians began introducing “the blues,” a direct progeny of the old time Negro spirituals that elicited soulful feelings of hopelessness and misery. The sounds that emerged from this genre were far from mainstream and were considered unfit for refined upper-class consumption. In the 1920’s the sounds and flavors of African music continued to percolate through society with the evolution of jazz, which at the time was considered the ‘Devil’s music’ by encouraging inter-racial mingling and purportedly raucous dancing.

The transformative rhythms and sounds that emerged from the children of former slaves, created throughout the 20th C. numerous acoustic innovations, in the likes of rock n’ roll, R&B’s, 70’s punk, Hip-Hop, Chicago house, Detroit techno, and urban rap. What would our world be today without these sounds and the legendary performances by those artists? What would the 60’s been without Jimi ‘Are you Experienced’ Hendrix; the 70’s without Led Zeppelin and Pink Floyd; the 80’s without The Police and REM; the 90’s without Pearl Jam, electronica, and white suburbanite kids ‘whigging’ to Public Enemy? Music of the 20th Century transcended class, ethnicity, and geography, and brought forth the expansion of western idealism, the undermining of communism, and a universal human connection.

At the end of the first decade of the 21st century what do we have to show for ourselves? At first there was the demise and fall of the pre-fabricated teen bands, only to be resurrected in the buffoonery of ‘American Idol.’ Every band that ever made money in the last quarter of the 20th century and few that did not, went back on the road to allow devoted fans to witness, as in the case of the Rolling Stones, that last fitful glance of Mick dancing like a chicken on Viagra. In the decade of the war against global terrorism we were subjected to a vast litany of re-heated and recycled sounds and entertainers. Urban hip-hop degenerated into guttural sounds encompassing such vibrant themes as “who’s the bigger thug”, “who’s got more bee-a-tches”, and how long someone can spool a 3-second bass and drum riff into an entire song. The decade of the zeros was a cultural wasteland bereft of a singular example of creativity.

Having done nothing to encourage new ideas, new sounds, or even promoting artists with talent, the music industry has engaged in a decade long assault on its customers, by lecturing, taunting, intimidating, and suing us. Earlier this month, the RIAA obtained a $1.92 million judgment against Jammie Thomas-Rasset, a single mother living in Minnesota who denied illegally downloading, in a jury trial in Federal court in Minnesota. Her crime was placing twenty-four (that’s 24 as in the hours in a day) songs on the old Kazaa file-sharing network. These pirates of high-capitalism have filed more than 30,000 similar copyright lawsuits against people they accuse of illegally swapping songs through Internet file-sharing services.

Once a mundane area of legal activity, copyright law has morphed into an all-encompassing juggernaut that can be found at the heart of many art and science disputes. Copyright litigation has entailed such high-minded cases as suing the Girl Scouts of America over the use of campfire songs and biotech firms demanding royalties on the detection of cancer causing human genes in sick patients. Ultimately these corporations and their legal shills do not improve our society; they do not make our society more decent, freer, or creative as this decade has proven. What they and their greed-head management want is nothing more than what the financial mandarins of Wall Street have been doing this dismal decade of deceit, that is creating money, for themselves of course, from nothing. These are the rancid offspring of Ivan Boeskey, 1980’s trader and convicted felon, who proclaimed, “I think greed is healthy. You can be greedy and still feel good about yourself.”

Well Boesky, RIAA, and all you music industry executives; fuck you!

The basis of copyright has been to provide the creators of new works an exclusive right to profit from their intellectual property for a limited period. Everything in our lives is to some extent borrowed, extended, or graft onto our individual being. Muddy Waters wrote famously that, “Blues had a baby and they named it rock and roll.” The point being, is that many corporations and white musicians like Elvis profited handsomely throughout the 20th century from the originators of the blues, jazz, bluegrass, country music, and rock and roll, but never felt it necessary to pay compensation to those who created the music in the first place. In fact, on more than a few occasions, these lamprey-faced pickpockets did not even live up to their fiduciary responsibilities to their actual black clients and simply pocketed the royalties for themselves.

In April 2009, Bono issued a statement on behalf of Pay for Musicians, saying, “It’s only fair that when radio makes money by playing a recording artist’s music ... the recording artist should be compensated just as songwriters are already.” What was the industry’s response to making sure that artists are adequately compensated for their work? U2 had their single “Get on your boots” pulled from some radio stations play lists in retaliation for supporting royalties for musicians.

What then is the value of the music industry?

They don’t produce or promote the generation of quality music.

They treat their clients (the musicians) with contempt.

They harass and sue single women and children on bogus and inflated charges.

For all these reasons, the music industry receives my first Capital-G award for corporate greed, legalized parasitism, and gross public incompetence.