Pfizer's 13th Legal Settlement - Will it be Enough to End the Impunity?

It has been almost two months since we lasted noted misbehavior by giant global pharmaceutical firm Pfizer Inc. With little fanfare, however, a few small news items noted the corporation's latest legal settlements.

Deceptive Marketing of Protonix

The first settlement merited only a few paragraphs from Reuters.  The gist was:

Pfizer Inc will pay $55 million plus interest to settle charges that Wyeth promoted its acid reflux drug Protonix for unapproved uses and made unproven claims about the medicine, the U.S. Department of Justice said on Wednesday. 

The infractions took place between February 2000 and June 2001, long before the world's largest drugmaker acquired Wyeth in 2009 for $68 billion.

A report in the examiner explained that Wyeth did not merely go beyond the label in promoting Protonix, it went beyond the evidence.

Wyeth allegedly promoted Protonix as the 'best PPI for nighttime heartburn' even though there was never any clinical evidence that Protonix was more effective than any other PPI for nighttime heartburn. 

Furthermore, the charges were that systemic efforts to mislead were sanctioned by top management:

 The allegations in the complaint are that this superiority slogan was formulated at the highest levels of the company. Wyeth retained an outside market research firm, at the cost of tens of thousands of dollars, to ensure that sales representatives delivered that misleading superiority message.

Finally, the government asserted that Wyeth corrupted physicians' continuing medical education in the process:

Finally, the government alleges that Wyeth used continuing medical education (CME) programs to promote Protonix for unapproved uses. CME programs are sponsored by accredited independent providers, such as universities, nonprofit organizations, or specialty societies. Pharmaceutical companies are permitted to provide financial support for CME programs, but they are not permitted to use CME programs as promotional vehicles for off-label indications.

According to the complaint, Wyeth spent millions of dollars providing 'unrestricted educational grants' to CME providers, and these grants invariably included promises that Wyeth would not attempt to influence the content of the program in any way. Nevertheless, the government alleges that one of Wyeth’s core marketing tactics for Protonix was to use CME programs to drive off-label use of the drug. According to the complaint, the Protonix 'brand team' influenced virtually every aspect of these CME programs: program topics, speaker selection, organization, and content. In addition, the government alleges that Wyeth even insisted that the CME program materials use the same color and appearance as Protonix promotional materials–a tactic that Wyeth and the vendor called 'branducation.'

So it seemed that the company put on quite an effort to promote what we have called elsewhere pseudo-evidence based medicine, yet, like many other legal settlements involving large health care organizations, this one involved no penalties of any type against the people within the organization who authorized, directed, or implemented the bad behavior. 

 Misleading Marketing of Zyvox, Lyrica 

Another settlement, for a few dollars less, got even less attention.  Fox Business news did report this:

 Pfizer Inc. (PFE) agreed to pay a combined $42.9 million to North Carolina and 32 other states in a settlement of allegations that the drug maker used unfair and deceptive practices in the marketing of antibiotic Zyvox and nerve-pain medicine Lyrica.

I could find no detail about the sorts of deception allegedly involved in the news media.  What little more Fox provided did suggest that this case also involved pitching drugs in instances in which their use was unsupported by good evidence:

The states had alleged that Pfizer had marketed Zyvox as superior to another antibiotic in fighting certain types of infections, though there allegedly wasn't substantial evidence to support superior results for some uses that Pfizer claimed.

The states also alleged that Pfizer marketed Lyrica for some off-label, or unapproved, uses.

There was no hint that again any individual would suffer any negative consequences for this particular set of deceits either.

Avoiding Impunity as a Topic of Polite Discussion

We have discussed a seemingly endless parade of legal settlements by large health care organizations.  In almost none was there any consequence beyond a fine paid by the company, and sometimes a pledge that the company would thereafter behave better.  While these relatively small costs were diffused throughout the organizations, almost never did the people who authorized, directed, or implemented the bad behavior pay any price or suffer any penalty.  Thus we have opined again and again (e.g., most recently here) that these settlements have become just another cost of doing business, and have no power to deter future bad behavior.

In addition, we have noted not only have multiple organizations made such settlements, some organizations have settled again and again.  Yet even in the cases of these multiple organizational offenders, the individuals involved maintain their immunity from any negative consequences.  Thus these are examples of impunity.  

Transparency International declared 23 November, 2012, as the International Day to End Impunity, explained as follows:

At Transparency International we view impunity as getting away with bending the law, beating the system or escaping punishment. Impunity is anathema to the fight against corruption.

However, impunity is one of those concepts which never seems to be a subject of polite conversation in health care, or, as we say, it has become anechoic.  

Therefore, it is fascinating that while these two Pfizer settlements were announced almost simultaneously, each was discussed, such as it was, as if it occurred in a vacuum.  Moreover, it also seems that each settlement was crafted by law enforcers without any attention to the record of the company making the settlement.  Thus, any implications about impunity were avoided.

Pfizer's Multiple Ethical Opfenses

In fact, during the time we have been posting on Health Care Renewal, Pfizer has become one of the great repeat ethical offenders in the health care arena.  Its track record since the beginning of the 21st century, (with yello colored background below, compiled from this post), is remarkable.

In the beginning of the 21st century, according to the Philadelphia Inquirer, Pfizer made three major settlements,

October 2002: Pfizer and subsidiaries Warner-Lambert and Parke-Davis agreed to pay $49 million to settle allegations that the company fraudulently avoided paying fully rebates owed to the state and federal governments under the national Medicaid Rebate program for the cholesterol-lowering drug Lipitor.

May 2004: Pfizer agreed to pay $430 million to settle DOJ claims involving the off-label promotion of the epilepsy drug Neurontin by subsidiary Warner-Lambert. The promotions included flying doctors to lavish resorts and paying them hefty speakers' fees to tout the drug. The company said the activity took place years before it bought Warner-Lambert in 2000.

April 2007: Pfizer agreed to pay $34.7 million in fines to settle Department of Justice allegations that it improperly promoted the human growth hormone product Genotropin. The drugmaker's Pharmacia & Upjohn Co. subsidiary pleaded guilty to offering a kickback to a pharmacy-benefits manager to sell more of the drug.

Thereafter, Pfizer paid a $2.3 billion settlement in 2009 of civil and criminal allegations and a Pfizer subsidiary entered a guilty plea to charges it violated federal law regarding its marketing of Bextra (see post here).  Pfizer was involved in two other major cases from then to early 2010, including one in which a jury found the company guilty of violating the RICO (racketeer-influenced corrupt organization) statute (see post here).  The company was listed as one of the pharmaceutical "big four" companies in terms of defrauding the government (see post here).  Pfizer's Pharmacia subsidiary settled allegations that it inflated drugs costs paid by New York in early 2011 (see post here).   In March, 2011, a settlement was announced in a long-running class action case which involved allegations that another Pfizer subsidiary had exposed many people to asbestos (see this story in Bloomberg).  In October, 2011, Pfizer settled allegations that it illegally marketed bladder control drug Detrol (see this post). Finally, in August, 2012, Pfizer settled allegations that its subsidiaries bribed foreign (that is, with respect to the US) government officials, including government-employed doctors (see this post). 

By my count, the two current settlements would be numbers twelve and thirteen.  Of course, while I believe this list is accurate, it may be incomplete.

Since none of these posts involved any negative consequences for any individuals who authorized, directed, or implemented the bad behavior, or who profited from it, and none involved any changed in the leadership or organization of the company, this becomes an amazing record of the impunity of Pfizer leadership over time and space. 

Will Impunity Finally Lead to Outrage?

Impunity, though, is a concept that is beginning to command some attention.

The Brasilia Declaration which was published at the conclusion of the 15th International Anti-Corruption Conference (hosted by Transparency International) included:

it is clear we all face a common challenge in our work: impunity for those who abuse positions of power. 

If impunity is not stopped, we risk the dissolution of the very fabric of society and the rule of law, our trust in our politics and our hope for social justice.

Activists, businesspeople, politicians, public officials, journalists, academics, youth and citizens who gathered in Brasilia to discuss the threat of corruption made it clear that impunity undermines integrity everywhere.

Whether we are investing collective efforts and resources in fighting poverty, human rights violations, climate change or bailing out indebted economies, we need to give the people a reason to believe that impunity will be stopped.

While the two latest Pfizer settlements barely got media coverage, maybe a $1.9 billion dollar settlement in the US by international banking giant will get more attention.  The charges in this case were not merely deceiving some doctors and patients about drug efficacy and safety.  The company was accused of aiding money laundering by drug cartels, and facilitating rogue regimes get around international sanctions.  As the New York Times reported,

State and federal authorities decided against indicting HSBC in a money-laundering case over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system.

Instead, HSBC announced on Tuesday that it had agreed to a record $1.92 billion settlement with authorities. The bank, which is based in Britain, faces accusations that it transferred billions of dollars for nations like Iran and enabled Mexican drug cartels to move money illegally through its American subsidiaries.

Unlike Pfizer's slow-motion impunity, this example got attention.  The Los Angeles Times noted,

The massive penalty still was not enough to appease some critics. No bank executives were charged as part of the investigation, leading some analysts to question the government's willingness to hold powerful Wall Street firms accountable.

'It's mind-boggling how they think you can have a financial system and allow this kind of impunity,' said William Black, a former banking regulator who aided federal prosecutors during the savings and loan crisis of the 1980s and 1990s. HSBC 'put the world at enormous risk.'

A NY Times editorial opened,

It is a dark day for the rule of law.   Federal and state authorities have not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system.  They have also not charged any top HSBC banker in the case, though it boggles the mind that a bank could launder money as HSBC did without anyone in a position of authority making culpable decisions.

Clearly, the government has bought into the notion that too big to fail is too big to jail.  When prosecutors choose not to prosecute to the full extent of the law in a case as egregious as this, the law itself is diminished.  The deterrence that comes from the threat of criminal prosecution is weakened, if not lost.

So maybe this huge financial case will prove to be the straw that breaks impunity's back.  So I will close by quoting the end of the Brasilia Declaration, in the hope that a few people will take it to heart in the context of health care, as well as in finance.

To take this important struggle forward the international anti-corruption community should promote greater people engagement and find ways to provide greater security for anti-corruption activists.

Reducing impunity also requires independent and well-resourced judiciaries that are accountable to the people they serve.

We call on leaders everywhere to embrace not only transparency in public life but a culture of transparency leading to a participatory society in which leaders are accountable.

We call on the anti-corruption movement to support and protect the activists, whistleblowers and journalists who speak out against corruption, often at great risk.

It is up to all of us in government, business and society to embrace transparency so that it ensures full participation of all people, bringing us together to send a clear message: We are watching those who act with impunity and we will not let them get away with it.

"Phony Consulting and Royalty Agreements," "Chocolate" Bribes, a Sales Representative Doubling as a Stripper, Oh My - Three Settlements for Othrofix

On this US election day, we seem to be in a mini-squall of cases involving unethical, deceptive, and now very colorful marketing practices used to push drugs and devices. 

We recently discussed a settlement of allegations of deceptive marketing practices and kickbacks by pharmaceutical company Boehringer-Ingelheim (here), a US congressional report alleging deceptive influence by Medtronic marketers over ostensibly scholarly publications (here), a study of documents released after litigation that appear to show how Pfizer had a systemic marketing campaign that used controlled trials as deceptive marketing vehicles (here),

Now three separate settlements by device/ biotechnology company Orthofix have come to light.

Settlement 1 - "Phony Consulting and Royalty Agreements," and Prostitution as Kickbacks, and a Sales Representative as Stripper

A Bloomberg article outlined Orthofix's two latest settlements.  The newest seems the most audacious, or bodacious,

Orthofix International NV, (OFIX) a maker of spinal implants, agreed to pay the U.S. $30 million to settle claims that a subsidiary paid illegal kickbacks and provided prostitutes to doctors in return for orders.

The subsidiary, Blackstone Medical Inc., paid kickbacks to spinal surgeons in the form of phony consulting and royalty agreements, and travel and entertainment to entice them to use its products, the U.S. Justice Department said in a statement today.

This case adds to the mounting pile of evidence that many of the financial relationships among physicians and health care academics and drug, device, biotechnology and other health care corporations are not merely conflicts of interest incidental to innovation.  In particular, Bloomberg reported,

[Whistle blower Susan] Hutcheson alleged that officials of Blackstone, purchased by Orthofix in 2006, violated kickback and false-claim laws by setting up a system to compensate doctors under sham consulting agreements and phony research grants, according to court filings. The sales executive said the company also offered lavish travel opportunities to doctors who implanted its products, the filing said.

Some doctors were paid as much as $8,000 a month under the fictitious consulting agreements, Hutcheson said in her suit, filed in federal court in Massachusetts. Orthofix’s U.S. unit is based in Lewisville, Texas. Some also received phony research grants for as much as $18,000, the suit added.

Then there was this colorful detail,

Blackstone salespeople also were urged to take surgeons out for expensive dinners, escort them to strip clubs and pay for liaisons with prostitutes to get their business, Hutcheson said in the suit.

One female sales manager in Dallas agreed to disrobe and join strippers on stage at the request of two surgeons to whom she was pitching the company’s products, Hutcheson said in her suit. The sales manager was demoted, not fired, over the incident, Hutcheson said in the suit.

We often hear from drug, device, and biotechnology companies that their sales efforts are all about providing needed information to physicians, information they could not otherwise obtain.  In this case, the information appeared to be rather anatomical, but also rather personal.

The AP coverage of this store (here, via Businessweek) also noted that the settlement involved a corporate integrity agreement.  Neither story mentioned any admissions made by the company.  As far as I could tell, no corporate executives suffered any consequences as part of this settlement.

Settlement 2 - Fraud, Obstructing the US Government, and Less Colorful Kickbacks to Promote Bone Growth Stimulators

The article did nor provide any helpful photographs, but it did note that Orthofix recently made a second settlement.

The settlement’s approval comes after Orthofix officials agreed to pay $42 million to resolve a separate whistle-blower suit and a criminal probe of allegations it paid kickbacks to doctors who used its bone-growth stimulators.


One of its units will plead guilty in federal court in Boston federal court to a single felony count of obstructing a U.S. government audit and pay a $7.8 million fine, according to a June 7 regulatory filing. Orthofix also will pay $34.2 million to resolve whistle-blower claims that the company defrauded the federal Medicare program over bone-growth stimulators, which patients wear after surgery to speed healing.

Amazingly, unlike the first settlement, and unlike most settlements we have discussed,

Five Orthofix employees have pleaded guilty to criminal charges in connection with probes of the kickback allegations. Thomas Guerrieri, an Orthofix vice president, pleaded guilty in April to violating the federal anti-kickback statute by setting up fake consulting agreements for doctors who used the company’s products.

Note that we discussed a surgeon who pleaded guilty to accepting kickbacks from multiple device companies, including the Blackstone subsidiary of Orthofix, here in 2008.

Settlement 3 - "Chocolate" Bribes to Mexican Government Officials

Finally, the AP story noted in passing "the recent resolution of a federal Foreign Corrupt Practices action" against the company.  I could not find any news coverage of that, but in July there did appear a SEC press release.

The Securities and Exchange Commission today charged Texas-based medical device company Orthofix International N.V. with violating the Foreign Corrupt Practices Act (FCPA) when a subsidiary paid routine bribes referred to as 'chocolates' to Mexican officials in order to obtain lucrative sales contracts with government hospitals.

The SEC alleges that Orthofix’s Mexican subsidiary Promeca S.A. de C.V. bribed officials at Mexico’s government-owned health care and social services institution Instituto Mexicano del Seguro Social (IMSS). The 'chocolates' came in the form of cash, laptop computers, televisions, and appliances that were provided directly to Mexican government officials or indirectly through front companies that the officials owned. The bribery scheme lasted for several years and yielded nearly $5 million in illegal profits for the Orthofix subsidiary.


Orthofix agreed to pay $5.2 million to settle the SEC's charges.

Also,

Orthofix also disclosed today in an 8-K filing that it has reached an agreement with the U.S. Department of Justice to pay a $2.22 million penalty in a related action.

Summary  

So the box score here includes settlements of legal actions alleging bribery and kickbacks, a corporate integrity agreement, a guilty plea by a company subsidiary to obstructing the US government, and multiple guilty pleas by company executives.  The bribes and kickbacks were provided in various colorful forms.  

The variety of unethical behaviors unearthed suggests a company with a seriously deranged corporate culture.  Whether the various actions taken against it, including the very unusual punishments meted out to some of its apparently mid-level executives will change its behavior, or serve as a lesson to other companies and their leaders is not clear.  Whether they are sufficient to suggest anyone should trust this company, its leaders, or its products seems questionable.   

This story adds to our various compilations of legal settlements and tales of crime, including bribery, kickbacks and fraud involving major health care organizations which suggest serious, deep afflictions within the culture of our commercialized health care system.  Yet almost nowhere, except here on Health Care Renewal are there calls for serious reforms to restore trust in our health care organizations and their leaders.

As we have said endlessly, up to now, such legal settlements seemingly have had no effect on the bad behavior of big health care organizations, while they continually erode trust in these organizations and their leadership, and trust in physicians to put patients ahead of personal gain.

Furthermore, these cases seem to be part of a larger social problem. It seems that nowadays the leadership of large, powerful organizations feels free to promote their own interests using psychologically sophisticated but deceptive marketing and public relations strategies no matter what their effect on the public welfare.

Again as we have said all too many times before, we will not deter unethical behavior by health care organizations until the people who authorize, direct or implement bad behavior fear some meaningfully negative consequences. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.

Maybe after all the election hoopla dies down here in the US, we can finally have a serious conversation about health care reform that will make our health care system more trustworthy. 

Just Another Day at the Office: Boehringer Ingelheim Settles Allegations of Deceptive Off-Label Marketing, Kickbacks

Legal settlements by pharmaceutical companies for less than $100 million now seem to barely rate as news in the US. The best report, albeit short, of a by Boehringer Ingelheim for a mere $95 million, seems to be in the Hartford (CT) Courant. The summary was:

Boehringer Ingelheim, a German company with U.S. headquarters in Ridgefield, has agreed to pay $95 million to settle allegations that it promoted four drugs for uses unsupported by research, and that it paid kickbacks to doctors to prescribe the drugs, the U.S. Department of Justice has announced.

It included most of the usual elements.

Off Label Marketing

Two of the drugs in the case are for treating chronic bronchitis and emphysema, and were suggested for children with asthma and coughs from the flu. The drugs had not been tested on children.

'I was concerned that doctors were basing their treatment decisions on false information,' [former Boehringer Ingelheim pharmaceutical representative and whistle blower Ron] Heiden said in the released statement. 'Promoting off-label treatments with potential serious consequences just to increase sales is heinous behavior.'

I note parenthetically that some industry apologists belittle the possible harms of truthful off-label marketing (e.g., look here).  However, at least in this case, the marketing was alleged to be based on falsehoods. 

Furthermore, some industry apologists may also decry the regulation of off-label marketing as a violation of the US Constitutional guarantees of freedom from government infringement on individual free speech.  Note, however, that Boehringer Ingelheim in this case got exclusive rights to market these drugs for many years from the government.  In exchange for these rights, the law restricted their right to market the drugs to approved indications.  

Promotion Beyond the Evidence

The company told doctors Aggrenox was better than Plavis to reduce the risk of heart attacks, but there was no evidence to support that claim, the Justice Department said. The drug had FDA approval to prevent secondary strokes.

Again, the truthfulness of the premises underlying the marketing apparently was questionable, to use charitable phrasing.  

Kickbacks to Physicians

This information came from the AP version of the story, here via the Washington Post:

the settlement resolved allegations that Boehringer Ingelheim paid kickbacks to health care professionals to induce them to prescribe all four of the drugs. These kickbacks included payments for participating in advisory boards, speakers’ training programs, speaker programs and consultant programs.

 Note further that apologists for industry also belittle the importance of the effects of conflicts of interest on health care (e.g., look here).  In this case, activities that are often referred to as species of conflicts of interest, e.g., advisory board membership, speakers board membership, consulting, apparently were meant as vehicles for payments to induce prescribing.  That is, apparently what some might have called conflicts of interests were allegedly kickbacks, or bribes.  As we have discussed before, it is one thing to be paid for legitimate clinical, educational, or scientific activity when such payments might influence professional, educational, or scientific judgments or activities about other matters.  It is entirely another thing to be paid a kickback to favor a drug company's marketing campaign instead of making decisions that put patients first.

A Corporate Integrity Agreement

[From the Hartford Courant]

Also as part of the settlement, Boehringer agreed to enter into an expansive Corporate Integrity Agreement to avoid such marketing in the future.

 We have noted before that such agreements do not seem to deter future bad behavior, (e.g., look here).

No Admission of Wrongdoing by the Company

[from the AP]

'The pharmaceutical industry as a whole has undergone significant changes over the past decade and continues to be under intense scrutiny,' said Greg Behar, president and chief executive officer of Boehringer Ingelheim. 'Likewise, our internal processes and compliance practices have evolved significantly over the years.' The company said it has been cooperating with the government investigation.

Again, if there is no acknowledgement by the company that it did wrong, do we expect it not to do wrong in the future?

Summary

Here was yet another legal settlement that documents the pervasiveness of the influence of marketing and public relations over physicians' professional responsibilities.  This is just one of several recent posts (e.g., here and here) about the malevolent influence of deceptive marketing or public relations on the evidence that health care professionals should be using to make the best possible decisions for individual patients.

Such legal settlements seemingly have had no effect on the bad behavior of big health care organizations, while they continually erode trust in these organizations and their leadership, and trust in physicians to put patients ahead of personal gain. 

Furthermore, these cases seem to be part of a larger social problem.  It seems that nowadays the leadership of large, powerful organizations feels free to promote their own interests using psychologically sophisticated but deceptive marketing and public relations strategies no matter what their effect on the public welfare.

As we have said all too many times before, we will not deter unethical behavior by health care organizations until the people who authorize, direct or implement bad behavior fear some meaningfully negative consequences. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.

Just the Latest Legal Settlement for HCA

Last month, we posted about investigative reports that suggesting that for-profit hospital chain HCAwas pushed by its private equity owners to put short-term revenue ahead of good patient care.  A legal settlement announced this week corroborates these concerns. 

As reported by television station WRCB in Chattanooga, TN,

HCA Inc., one of the nation's largest private hospital chains, has agreed to pay $16.5 million to settle alleged violations of the Ethics in Patient Referrals Act (also known as the Stark law), the False Claims Act, and other federal and state laws and regulations in connection with the operation of its subsidiary, Parkridge Medical Center, Inc., in Chattanooga.
In addition, Parkridge Medical Center has entered into a comprehensive five-year Corporate Integrity Agreement with the Office of Inspector General of the U.S. Department of Health and Human Services (HHS-OIG) to ensure its continued compliance with federal health care benefit program requirements.
As alleged in the settlement agreement, during 2007, HCA, through its subsidiaries Parkridge and HCA Physician Services (HCAPS), entered into a series of financial transactions with a physician group, Diagnostic Associates of Chattanooga, through which it provided financial benefits intended to induce the physician members of Diagnostic to refer patients to HCA facilities.
The financial benefits included lease of office space from Diagnostic at a rental rate well in excess of fair market value to meet the mortgage obligations of the Diagnostic members and release of Diagnostic members from a separate lease obligation. These financial arrangements violated the Ethics in Patient Referrals Act and the Anti-Kickback Statute – laws designed to protect patients as well as the integrity of government-funded health care benefit programs such as Medicare, Medicaid, TRICARE, and TennCare.

The issue here were allegations that HCA and its subsidiaries were paying physicians extra so that they would refer patients to an HCA hospital. Obviously, physicians are supposed to put each patient's interests ahead of extraneous considerations, and hence should make referral decisions based on the patients needs, and the likely benefits and harms of the referral, not the amounts the physicians might make from such payments.

Referrals for particular services can be very lucrative for hospitals.  So this settlement seems to provide more evidence that to get profitable referrals, HCA was willing to subvert physicians' values by paying physicians to induce to make what might have been the wrong decisions for individual patients.  Of course, in this situation some physicians were hardly blameless, since they were also willing to set aside their values to receive the payments that generated those referrals.

This fits with the thesis we advanced last month.  While hospitals are supposed to have a mission to put care of the sick ahead of all else, it appears that for-profit hospitals, and especially those owned by private equity are more likely to put short-term revenue ahead of patient care.

As an aside, while this settlement provides useful information, do not think of it as a solution to the immediate problem. 

As we have frequently asserted, it is doubtful that the relatively small payment and the relatively unlikely to be enforced corporate integrity agreement imposed in this settlement will change the company's behavior, in the absence of any negative consequences for the people who authorized, directed or implemented the bad behavior.  HCA once made a $1.7 billion fraud settlement, at the time the biggest such settlement ever made (see this post).  However, the company's CEO at the time, Rick Scott, left the firm with a golden parachute and no negative consequences, and is now Governor of Florida.  If that previous huge settlement did not deter the more recent bad behavior in the absence of any penalties for company executives, why should we expect that the current comparatively tiny settlement also in the absence of such penalties will have any effect?

As we have now said many, many times, we will not deter unethical behavior by health care organizations until the people who authorize, direct or implement bad behavior fear some meaningfully negative consequences. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.

Furthermore, as I wrote last month, we need to challenge the notion that direct health care should ever be provided, or that medicine ought to be practiced by for-profit corporations. Before market fundamentalism became so prominent, many stated prohibited the corporate practice of medicine, and the American Medical Association forbade the commercialization of medicine. It is time to heed that wisdom. I submit that we will not be able to have good quality, accessible health care at an affordable price until we restore physicians as independent, ethical health care professionals, and until we restore small, independent, community responsible, non-profit hospitals as the locus for inpatient care.

Twilight of the Anechoic Effect? - New England Journal of Medicine Article Discusses Previously Taboo Topic of Bad Corporate Health Care Leadership

We have often complained of the anechoic effect, that the issues we discuss on Health Care Renewal often do not seem to be considered topics of polite conversation.  Any discussion that might question the brilliance, integrity, dedication, or selflessness of the leaders of health care organizations seems particularly taboo. 

So a major aim of this blog has been to discuss the numerous publicly available examples of leadership that is ill-informed, uncaring about or hostile to the values of health care professionals, incompetent, self-interested, conflicted, or outright corrupt, and of governance that lacks accountability, transparency, integrity, honesty, or ethics.  We have postulated that such problems with leadership and governance are not only causes, but the major causes of the increasing dysfunction of our health care system.  That discussing these issues is simply not done in many contexts, including academic health care, medical and health care journals, and health policy fora has only accelerated health care dysfunction.

The New England Journal on Punishing Health Care Fraud

Therefore, I note with some surprise that the New England Journal of Medicine just published an article (online first) that implicitly challenged the leadership of some large health care organizations. [Outterson K. Punishing health care fraud - is the GSK settlement sufficient.  N Engl J Med 2012; 367: 1082 - 1085.  Link here.]

The article summarized the record settling legal settlement agreed to by GlaxoSmithKline (see this post).  It noted that the company pleaded guilty to three criminal charges.  It then noted that while this was the largest recent legal settlement by a pharmaceutical company, "it would be a mistake to assume that GSK was an outlier in the global pharmaceutical and medical-device industries. Indeed, many of the major companies have settled with the Department of Justice in recent years."  It included a table of the largest pharmaceutical company settlements with the US government from 2009 to now.

Based on this background, the article dared to question whether such settlements deter bad behavior:

But questions remain about the efficacy of fines and corporate integrity agreements in deterring corporate misbehavior. The 2012 fines against Abbott Laboratories and GSK represent a modest percentage of those companies' revenue. Companies might well view such fines as merely a cost of doing business — a quite small percentage of their global revenue and often a manageable percentage of the revenue received from the particular product under scrutiny. If so, little has been done to change the system; the government merely recoups a portion of the financial fruit of firms' past misdeeds.

Even more daring was its challenge to top executives of pharmaceutical corporations,

One partial solution would be to impose penalties on corporate executives rather than just the company as a whole. Boston whistleblower attorney Robert M. Thomas, Jr., embraces this approach: 'GSK is a recidivist. How can a company commit a $1 billion crime and no individual is held responsible?'

A Taboo Broken

Having blogged on Health Care Renewal for nearly eight years, I recall very few, if any instances in which leaders of health care organizations were described as deserving punishment, or perhaps even guilty of crimes within large circulation medical journals, and within the New England Journal of Medicine, the most prominent US journal in particular. While discussion of misbehavior within health care organizations has slowly been seeping into the medical and health care literature, delicate phrasing has often been employed that leaves unclear whether top executives have any accountability for this behavior. (For example, while the Lancet editorial on the GSK settlement condemned "GSK's fraud," accused GSK of "actively encouraging off-label prescription," and asserted that "GSK and other drug companies have come adrift from standards of the societies they seek to serve," it never said anything about GSK's leaders or whether they in paticular had anything to do with the company's bad behavior. [Anon. Moral decaly at GSK reaps record US$# billion fine. Lancet 2010; 380: 2. Link here.])

So it is a big step for the NEJM to publish an article that suggests corporate executives might deserve penalties. I hope that this publication might lead to a bit of discussion of these issues within the larger medical and health care communities, the vast majority of whom have likely never heard of this blog and may have never seen anything other than an occasional news article in local media questioning the leadership of large health care organizations.

Things are Even Worse

Unfortunately, I need to end with the observation that the problems are even worse than what the NEJM article implies. Legal settlements of allegations of bad behavior by large health care organizations are much more numerous than those mentioned in this article (look here for examples).

Many of the largest and most prestigious organizations actually have histories of multiple settlements, guilty pleas, and related legal and governmental findings. For example, look here for Pfizer's record, here for Johnson and Johnson's record, here for Abbott's record, and here for Wellpoint's record. Pfizer was even found by a jury to be a racketeering influenced and corrupt organization (RICO)(see post here).

Despite these records of recidivism, no leaders of these companies have paid any individual penalties, and none of these organizations have had any restructuring or leadership changes imposed. This is even more disturbing when this kid-glove treatment of misbehavior by big health care organizations is contrasted with the severe penalties imposed on individuals or leaders of small companies found guilty of health care fraud (look here).

You Heard It Here First

However, in 2003 we first published documentation of individual physicians' concerns that ill-informed, incompetent, self-interested, or even corrupt leadership was threatening their core values [Poses RM. A cautionary tale: the dysfunction of American health care. Eur J Int Med 2003; 14: 123-130. Link here.] Furthermore, since 2008 we have been stating that corporate fines do not deter bad behavior.

It is not that law enforcement does not have the power to seek penalties on individuals. As we noted here, a Supreme Court case from 1943 empowered the government to seek penalties against responsible corporate officers (the "responsible corporate officer doctrine") who were in a position to stop a fraud that resulted in a guilty plea or conviction, particularly for the selling of misbranded or adulterated drugs into interstate commerce under the US Food and Drug Act.  (This was exactly the situation dealt with by the GSK settlement.)  Despite a threat made in 2010 by the chief counsel of the Inspector General's office of the US Department of Health and Human Services to use such legal authority to "get high level executives out of companies," nothing of the sort has happened.

So now that it is no longer taboo to question the pretensions of some leaders of health care organizations to near divine purity, let me state as I did in 2008,

As long as health care leaders can shrug off the consequences of unethical behavior merely as acceptable costs of doing business, absent any serious attempts to get health care organizations to enforce internal codes of ethical behavior or to avoid hiring ethically challenged leaders, the procession will likely continue. The effects will be continually rising costs, declining quality, shrinking access, and rising numbers of demoralized health professionals.

As I wrote in 2009,

Until bad leadership of health care organizations leads to negative consequences for those practicing it, health care leadership can be expected to continuously degrade.

How Many Legal Settlements Does it Take... to Lead to Real Change in Johnson and Johnson Leadership?

And the latest Johnson & Johnson settlement is (as described in Bloomberg/ BusinessWeek):

Johnson & Johnson (JNJ) will pay $181 million to resolve claims by 36 states that it improperly marketed and advertised the antipsychotic drugs Risperdal and Invega.

J&J and its Janssen unit settled claims that it promoted the drugs from 1998 through 2004 for uses not approved by the U.S. Food and Drug Administration. New York Attorney General Eric Schneiderman said today the accord is the largest multistate consumer protection-based pharmaceutical settlement.

'This landmark settlement holds the companies accountable for practices that put patients in danger, and serves as a warning to other pharmaceutical giants that they must play by one set of rules,' Schneiderman said in a statement.

J&J agreed it won’t promote the drugs for off-label uses or tout them falsely.

Specific Bad Behaviors

The allegations were of the sorts of behavior that should make health professionals cringe,

Using speaker programs on unapproved uses, sham consulting programs for physicians, and lucrative agreements with doctors who prescribed off-label, J&J 'sought to enhance Risperdal’s off-label market penetration across a wide range of diagnoses and patient populations, according to Florida’s complaint.

So reading slightly between the lines, the behaviors included various ways to pay physicians ("sham consulting," "lucrative agreements") for prescribing drugs, providing physicians monetary incentives to violate the most core of their core values, putting the individual patient's welfare and needs ahead of personal enrichment. Why these were not labeled kickbacks or bribes is not obvious.

No Individuals Pay any Penalty

Nonetheless, as in nearly every other legal action by state or federal law enforcement against a big pharmaceutical company or other big health care company, the entire settlement involved no penalties to any individuals who may have authorized, directed or participated directly in the misbehavior. In fact,

The company, based in New Brunswick, New Jersey, settled 'to resolve the concerns of the attorneys general under state consumer protection laws and to avoid unnecessary expense and a prolonged legal process,' it said in a statement.

J&J didn’t admit wrongdoing or pay a fine or penalty.

The tough law enforcers claimed

The agreement 'sends a message to all pharmaceutical companies that these practices will not be tolerated,' Florida Attorney General Pam Bondi said in a statement.

Of course, there was another part to the settlement. The company promised not to do these sort of bad things again,

Bondi said Janssen agreed to several steps over five years. They include having policies to ensure that financial incentives aren’t given to encourage off-label marketing; sales and marketing employees can’t develop the medical contents of responses to health-care providers; and it must describe the effectiveness and risks of drugs in a balanced manner.

Should we believe them? Their record is not promising.

Earlier this year Johnson & Johnson was fined $1.1 billion by a judge in Arkansas for deceiving patients and physicians about the very same drug at issue in this suit, Risperdal (look here). That was just the latest in a remarkable string of legal cases suggesting an ongoing pattern of unethical and illegal behavior by this very large health care corporation. As we wrote recently, this included
- Convictions in two different states in 2010 for misleading marketing of Risperdal, as noted above
- A guilty plea for misbranding Topamax in 2010
- Guilty pleas to bribery in Europe in 2011 by J+J's DePuy subsidiary
- A guilty plea for marketing Risperdal for unapproved uses in 2011 (see this link for all of the above)
- Accusations that the company, which makes smoking cessation products, participated along with tobacco companies in efforts to lobby state legislators (see post here)
- A guilty plea to misbranding Natrecor by J+J subsidiary Scios (see post here)
- More recently, in 2012, testimony in a trial of allegations of unethical marketing of the drug Risperdal (risperidone) by the Janssen subsidiary revealed a systemic, deceptive stealth marketing campaign that fostered suppression of research whose results were unfavorable to the company, ghostwriting, the use of key opinion leaders as marketers in the guise of academics and professionals, and intimidation of whistleblowers. After these revelations, the company abruptly settled the case (see post here).
- Most recently, there are reports that the company is in negotiation with the US Department of Justice to settle other lawsuits about the marketing of Risperdal, perhaps for as much as $1.8 billion (see this BusinessWeek story.)

One might think that the leadership on whose watch this all occurred would be in disgrace. There has been, however, no major changes in leadership of the company. The CEO who was in power during the time when these settlements, and much of the behavior leading to them, will be retiring, after earning huge compensation, and with a retirement package valued somewhere between $143 and $197 million (see this post). Rather than disgrace, he recently was put on the committee responsible for investigating JP Morgan Chase's $5.8 billion dollar trading loss (as reported by Bloomberg, via NJ.com).

Summary

As we have noted again and again and again, many of largest and once proud health care organizations now have recent records of repeated, egregious ethical lapses. Not only have their leaders have nearly all avoided penalties, but they have become extremely rich while their companies have so misbehaved.

These leaders seem to have become like nobility, able to extract money from lesser folk, while remaining entirely unaccountable for bad results of their reigns. We can see from this case that health care organizations' leadership's nobility overlaps with the supposed "royalty" of the leaders of big financial firms, none of whom have gone to jail after the global financial collapse, great recession, and ongoing international financial disaster (look here). The current fashion of punishing behavior within health care organization with fines and agreements to behave better in the future appears to be more law enforcement theatre than serious deterrent.  As Massachusetts Governor Deval Patrick exhorted his fellow Democrats, I exhort state, federal (and international, for that  matter) law enforcement to "grow a backbone" and go after the people who were responsible for and most profited from the ongoing ethical debacle in health care.

As we have said before, true health care reform would make leaders of health care organization accountable for their organizations' bad behavior.

Continuing Dissection of the Infamous Study 329

On the 1BoringOldMan blog, semi-anonymous blogger Mickey has been dissecting in detail the infamous Study 329 that GlaxoSmithKline used to promote Paxil (Seroxat, paroxetine) as safe and effective for children and adolescents, when the study data, rigorously analyzed, showed that was not the case.  Study 329 was an important part of the US Department of Justice case against GSK that resulted in a record $3 billion settlement (see this post). 

The posts so far are:
A Pretty Rotten Era  
A Movement
To Make Distortion Possible
The Lesson of Study 329: the Basics
The Lesson of Study 329: Efficacy Drifts to Trends and 2s
The Lesson of Study 329: Conventions and Protocols
The Lesson of Study 329: Uh-oh
The Lesson of Study 329: Data Transparency
The Lesson of Study 329: the Authors

This does not seem to be the end of the series, but the last post yesterday did have a striking conclusion:

But, for the moment, I am stuck on the piece that is, to me, the most fundamental lesson from this story, and unfortunately many similar stories in the industry-funded clinical trial literature that fills our journals. The authors of this study did not function as physicians, clinicians, scientists, or even authors. Some were there because of their previous credentials. Others were there to build up future credentials. But they weren’t there to do what they presented themselves as doing. Researchers are practicing medicine too. I might be seen as naive to see this as the center of this story. If that’s the case, I’ll go to my grave being naive. Medicine has been my life, and this isn’t Medicine.

There’s no place or tradition for physicians, particular physicians in high places, taking part in this kind of bullshit – particularly all the while claiming otherwise. The fact that it has been a widespread practice isn’t an excuse. That’s also an even stronger indictment. There are many principled neuroscientists working in this difficult area of medical science who’ve been tarnished by this kind of pseudoscience. There are many psychiatrists and other practitioners who’ve actually trusted these deceitful articles. And there are untold numbers of patients who’ve been medicated un-necessarily or even directly harmed by this and other capricious advise coming out of these studies – this one in particular. Rather than functioning as the advisers of ill people, these were physicians who actively participated in capitalizing on patients’ illness.

However, despite the seriousness of these concerns, and their corroboration in the Justice Department document that pushed GSK to settle for so much money, my alma mater, Brown University, where Dr Martin Keller, the lead author of Study 329, was Chair of Psychiatry, has consistently refused to revisit the study, and consistently failed to publicly refute the accusations against Dr Keller, nor to accept them and take appropriate action.  The University supposedly conducted an internal investigation of the matter, but has not seen fit to make it public.  When asked again about this, Brown's new President, Christina Paxson, referred the inquiry to the public relations people:

'The recent announcement by the U.S. Department of Justice did not suggest that any further reviews of the paper by the university are immediately warranted,' Darlene Trew Crist said in a written response. 'We have no further statement to make at this time.'

Given the seriousness of the allegations, and the University's mission:

The mission of Brown University is to serve the community, the nation, and the world by discovering, communicating, and preserving knowledge and understanding in a spirit of free inquiry, and by educating and preparing students to discharge the offices of life with usefulness and reputation.

the logic of the administration's refusal to have a public discussion of this case escapes me. As I have said before (in 2008!), the appearance of continued stonewalling, now going on for years, can easily be interpreted to imply that the institution has something really big and bad to hide.

Also see comments by Alison Bass on the Alison Bass blog, and by Dr Howard Brody on the Hooked: Ethics, Medicine and Pharma blog.

ADDENDUM (4 September, 2012) - There have been two additional posts on the 1BoringOldMan blog on Study 329:
the lesson of Study 329: the hurdles…
the lesson of Study 329: naked Emperors, fractious Queens…

ADDENDUM (4 September, 2012) - See also this post on the Alison Bass blog.

ADDENDUM (5 September, 2012) - See this post on the retirement of Dr Keller by Ed Silverman on PharmaLot.

ADDENDUM (10 September, 201) - See the final two posts in the 1BoringOldMan series:
the lesson of Study 329: “we’re only as sick as our secrets”…
the final lesson of Study 329: epilogue…

His conclusion in the next to last post of the series:

Something terrible happened in psychiatry, an alliance between the pharmaceutical industry and a number of our leaders who allowed their academic credentials to be used for commercial purposes. It happened on a large scale, and in the process shamed all of us, whether we were involved or not. Many of the people we looked to to guide us fell into the role of key opinion leaders – a marketing term that meant that they could influence what we did and how we practiced. And in that new role, medical degrees, academic positions, the methods of science, and psychiatric experience became little more than marketing tools in a commercial campaign. Such was the case with Study 329 – an article that has become exemplary because it is now so painfully well known – a symbol for the failings of an era. It needs to be retracted simply because it was wrong on purpose – and we all know it. And yet no involved person, institution, or organization highlighted in that last paragraph has swallowed their pride, or guilt, or denial, or arrogance and called for retraction.

[Italics and bold typeface added for emphasis]

Pfizer's Pforeign Pfiasco

Quelle surprise.  Giant international pharmaceutical company Pfizer managed to go for nearly 10 months without announcing a major legal settlement.  However, this month, as reported by Bloomberg, it was time for Pfizer to settle again.  The basics were:

Pfizer Inc., the world’s biggest drugmaker, agreed to pay $60.2 million to settle foreign bribery cases it brought to U.S. authorities involving alleged payments paid by employees and agents of subsidiaries.

Pfizer entered into two agreements with the Securities and Exchange Commission and the New York-based drugmaker reached a deferred prosecution accord with the Department of Justice, according to filings today in federal court in Washington.

Bribery

This case is worth perusing because of how it documents what the US government called not merely deceptive, but corrupt practices used by Pfizer to sell drugs. The practices were widespread around the world:

The settlements announced today include Pfizer operations in eight countries: Bulgaria, Croatia, Kazakhstan, Russia, Italy, China, the Czech Republic and Serbia. The Wyeth settlement, over its nutrition business, was for China, Indonesia, Saudi Arabia and Pakistan.

The practices involved, not to put too fine a point on it, bribing doctors. Furthermore, as part of the settlement Pfizer apparently admitted to some of the specific practices alleged by the government:

In Bulgaria, local representatives spent $28,000 to invite government doctors on 'incentive trips' to Greece, as a reward for the physicians who were the biggest prescribers of Pfizer’s products, Pfizer admitted according to the Justice Department filing. They also paid $17,000 to send doctors to medical conferences, again in exchange for commitments to prescribe Pfizer drugs.

In Croatia, the unit there had used a consulting agreement with a government doctor to help influence which drugs were allowed to be sold in the country, paying the physician in cash and travel expenses, Pfizer admitted.

Pfizer also admitted to what was called the 'hospital program,' in Russia, where doctors were given a 5 percent kick- back on certain drugs prescribed.

'Pfizer Russia used the Hospital Program to make cash payments to individual government healthcare professionals to corruptly reward past purchases and prescriptions of Pfizer products, and to corruptly induce future purchases and prescriptions,' the Justice Department said in the filing. Pfizer’s Russian unit also used intermediary companies to pay off doctors and government officials, the company admitted.

No Individual Penalties

Despite the shamefulness of these practices, as is now distressingly usual (look here), no individual seems to be obligated to suffer any penalty or negative consequences as a result of this settlement. While the US government alleged criminal behavior, beyond the fines imposed on the company, further prosecution will be deferred:

The Justice Department charged the Pfizer HCP Corp. unit with two criminal counts, conspiracy to violate the Foreign Corrupt Practices Act and a violation of the FCPA’s anti-bribery provisions. Prosecutors agreed to defer prosecution and drop the charges after two years if Pfizer continues to cooperate and take remedial steps.

The article contained a curious statement seemingly asserting that the payments were somehow made independent of any actions by individuals at Pfizer:

The SEC said the payoffs were made 'without the knowledge or approval of officers or employees of Pfizer, but the inaccurate books and records of Pfizer subsidiaries were consolidated in the financial reports of Pfizer.'

So were the payments made by machines acting autonomously? or by ghosts? Maybe this was just a typo. However, note that the de rigeur statement by Pfizer's internal counsel was phrased so as to imply the actions somehow occurred outside of the organization:

'The actions which led to this resolution were disappointing, but the openness and speed with which Pfizer voluntarily disclosed and addressed them reflects our true culture and the real value we place on integrity and meeting commitments,' Amy Schulman, Pfizer’s general counsel, said in an e-mailed statement.

Summary

This latest settlement reaffirms the poor ethical culture now prevalent in major health care organizations throughout the world.  It also affirms how deeply unethical the culture has become at some of our largest and most prominent and influential health care organizations.  This settlement is only the latest evidence of ethical missteps by Pfizer's leadership.

In the beginning of the 21st century, according to the Philadelphia Inquirer, Pfizer made three major settlements,

October 2002: Pfizer and subsidiaries Warner-Lambert and Parke-Davis agreed to pay $49 million to settle allegations that the company fraudulently avoided paying fully rebates owed to the state and federal governments under the national Medicaid Rebate program for the cholesterol-lowering drug Lipitor.

May 2004: Pfizer agreed to pay $430 million to settle DOJ claims involving the off-label promotion of the epilepsy drug Neurontin by subsidiary Warner-Lambert. The promotions included flying doctors to lavish resorts and paying them hefty speakers' fees to tout the drug. The company said the activity took place years before it bought Warner-Lambert in 2000.

April 2007: Pfizer agreed to pay $34.7 million in fines to settle Department of Justice allegations that it improperly promoted the human growth hormone product Genotropin. The drugmaker's Pharmacia & Upjohn Co. subsidiary pleaded guilty to offering a kickback to a pharmacy-benefits manager to sell more of the drug.

Thereafter, Pfizer paid a $2.3 billion settlement in 2009 of civil and criminal allegations and a Pfizer subsidiary entered a guilty plea to charges it violated federal law regarding its marketing of Bextra (see post here).  Pfizer was involved in two other major cases from then to early 2010, including one in which a jury found the company guilty of violating the RICO (racketeer-influenced corrupt organization) statute (see post here).  The company was listed as one of the pharmaceutical "big four" companies in terms of defrauding the government (see post here).  Pfizer's Pharmacia subsidiary settled allegations that it inflated drugs costs paid by New York in early 2011 (see post here).   In March, 2011, a settlement was announced in a long-running class action case which involved allegations that another Pfizer subsidiary had exposed many people to asbestos (see this story in Bloomberg).  In October, 2011, Pfizer settled allegations that it illegally marketed bladder control drug Detrol (see this post).

Thus, it appears on 10 separate occasions between 2002 and 2012, Pfizer settled allegations of, pleaded guilty to, or was convicted for actions that represented seriously unethical behavior.  Note that these included a conviction that found the company to be a racketeer-influenced corrupt organization.

Yet the company has not failed or been restructured, and none of its leaders has ever faced any negative consequences.  In fact, last year its CEO made over $18 million, up from over $6 million the year before (see this post).   

So obviously it is not just that one company's culture has become seriously corrupt.  We seem to live in such a corrupt nation, and maybe such a corrupt global society that such corrupt cultures thrive in our major corporations and organizations.  Despite stories like this in health care, just like in finance despite the global financial collapse, as Charles Ferguson said at the Oscar awards last year, " not a single ... executive has gone to jail, and that's wrong."




Unless we hold leaders of health care organizations accountable for bad behavior and corruption, expect bad behavior and corruption to get worse.  Until we have political leaders with the courage to stand up for honesty and the law, expect continued dishonesty and the law to continue to be trampled by the rich and powerful. 

Giant GSK Settlement Provides Reminder of the Pervasiveness of Stealth Marketing

The latest  and biggest legal settlement involving health care to hit the news, that of GlaxoSmithKline (GSK) and the US government, has many familiar elements. As summarized by the New York Times,

In the largest settlement involving a pharmaceutical company, the British drugmaker GlaxoSmithKline agreed to plead guilty to criminal charges and pay $3 billion in fines for promoting its best-selling antidepressants for unapproved uses and failing to report safety data about a top diabetes drug, federal prosecutors announced Monday. The agreement also includes civil penalties for improper marketing of a half-dozen other drugs.

As was the case for nearly every other legal settlement we have discussed,

No individuals have been charged in any of these cases.

Thus, how well even such a large settlement will deter future wrong-doing is not clear.

Nonetheless, the documents released with it provide good documentation about how pervasive systematic, deceptive stealth marketing campaigns have become in health care. 

In particular, the official "complaint" filed by the US Department of Justice emphasized all these elements in the stealth marketing of paroxetine (Paxil, Seroxat in the UK) to adolescents.

Manipulation of Clinical Research

We have frequently discussed how health care corporations, particularly pharmaceutical, biotechnology and device companies, now sponsor  the majority of clinical research.  Their control of the design, implementation, analysis and dissemination of clinical research allows manipulation that increases the likelihood that the results will be favorable to their vested interests, usually the products and services they sell. 

We have previously discussed the manipulation of Study 329 to promote the marketing of Paxil (look here and here).  However, the US DOJ document makes these concerns more official.  It included:

Manipulation of Study Endpoints

Study 329 was a randomized controlled trial of Paxil vs imipramine vs placebo for depression in adolescents. The two primary endpoints pre-specified to the US Food and Drug Administration were "the degree to which a patient's Hamilton Rating Scale for Depression ('HAM-D') total score changed from baseline"; and "the patient's 'response' to medication, as defined as (a) a 50% or greater reduction in the patient's HAMD-D score, or (b) a HAM-D score of less than or equal to 8." However, initial analysis by GSK failed to show that Paxil improved either of these two end-points. The company concluded "it would be commercially unacceptable to include a statement that efficacy had not been demonstrated, as this would undermine the profile of [Paxil]."

So the analysis emphasized secondary outcomes, the "Study 329 investigators later added several additional efficacy measures not specified in the protocol. Paxil separate statistically from placebo on certain of these measures." Adding numerous post-hoc measures increased the likelihood of finding a difference on at least one due to chance alone.

Manipulation of Data

Initial analysis of the data suggested that patients given Paxil experienced 11 serious adverse events, including five that appeared related to suicidal ideation or action. When the FDA later reexamined the data, "upon closer examination the number of possible suicide-related events among the Study 329 Paxil patients increased beyond the five patients GSK described in the JACAAP article as having 'emotional lability.' While collecting saftey information for the FDA, GSK admitted that there were four more possible suicide-related events among Paxil patients in Study 329. In addition the FDA later identified yet another possible suicide-related event in the Study 329 Paxil patients, which was also not among the 11 serious advents listed in the JAACAP article. Thus, altogether, 10 of the 93 Paxil patients in Study 329 experienced a possible suicidal event, compared to one in 87 patients on placebo. This is a fundamentally different picture of Paxil's pediatric safety profile than the one painted by the JAACAP article...." 

Manipulation of Dissemination

The report describing the results of Study 329 (Keller MB, Ryan ND, Strober M et al.  Efficacy of paroxetine in the treatment of adolescent major depression: a randomized controlled trial.  J Am Acad Child Adolescent Psychiatry 2001; 40: 762-772.  Link here. ) was written under the control of GSK. "In April 1998, GSK hired Scientific Therapeutics Information, Inc (STI) to prepare a journal article about Study 329. GSK worked closely with STI on the article by providing a draft clinical report to 'serve as a template for the proposed publication.'"

The published report of Study 329 "mischaracterized the results." "Although the ... article identified the study's two primary endpoints in the abstract, the article did not explicitly state that Paxil failed to show superiority to placebo on either of the primary efficacy measures." Also, "the article did not explicitly identify the two protocol-specified primary outcome measures - or that Paxil failed to show superiority to placebo on these two measures. Instead the article claimed that there were eight efficacy measures and that Paxil was statistically superior to placebo on four of them." In addition, "while the article listed the five protocol-defined secondary endpoints, the text of the article omitted any discussion regarding three of the secondary measures on which Paxil failed to statistically demonstrate its superiority to placebo and instead focused on the five secondary measures that GSK added belatedly and never incorporated into the Study 329 protocol. The article claimed that these finve secondary measures had been identified 'a priori,' therefore incorrectly suggesting that all secondary endpoints had been part of the original study protocol." In other words, the final published articles contained multiple outright falsehoods about the drug's efficacy that exaggerated that efficacy.

Furthermore, initial analysis showed that patients given Paxil had more serious adverse events than others. An initial draft of the study article stated, "serious adverse events occurred in 11 patients in the paroxetine group, 5 in the imipramine group, and 2 in the placebo group." These included "headache during down-titration(1 patient), and various psychiatric events (10 patients): worsening depression (2); emotional lability (e.g., suicidal ideation/ gestures, overdoses), (5); conduct problems or hostility (e.g., aggressiveness, behavioral disturbance in school) (2); and mania (1)." As noted above, the number of suicide related events was actually double that noted in this draft as "emotional lability."  However, the published version of the report "falsely state[d] that only one of the 11 serious adverse events in Paxil patients was considered related to treatment...."  Nor did it mention the true number of events related to suicidal ideation or action.

The article only "listed at most five possibly suicidal events among Paxil patients, brushed those off as unrelated to Paxil, and conclude that treating children with Paxil was safe."

Later, GSK marketing materials described the results of the study thus,

This 'cutting-edge,' landmark study is the first to compare efficacy of an SSRI and a TCA with placebo in the treatment of major depression in adolescents. Paxil demonstrates REMARKABLE Efficacy and Safety in the treatment of adolescent depression."

Thus the conrol exerted by GSK over the published article, despite its apparent academic authorship, enabled it to promote a drug that was not efficacious and had major adverse events as remarkably safe and effective, a totally deceptive result that would mislead any health care professional who used the article to guide clinical practice. 

Suppression of Clinical Research

GSK sponsored two other studies of Paxil in pediatric populations, Studies 377 and 701. As stated in the Department of Justice's Criminal Complaint against GSK,

GSK Did Not Publicize the Results of Studies 377 and 701
43. GSK learned the results of Study 377 in 1998 and the results of Study 701 in 2001. Paxil failed to demonstrate efficacy on any of the endpoints of either study.
44. GSK did not hire a contractor to help write medical articles about the results of Studies 377 and 701, as it had with Study 329.
45. GSK did not inform its sales representatives about the results of Studies 377 and 701.

Thus, GSK managed to conceal the fact that the majority of the studies it sponsored about Paxil used for adolescent patients showed no evidence that the drug worked, again seriously distorting the evidence-base on which clinicians made decisions, and doubtless leading to the use of a dangerous, ineffective drug by numerous vulnerable patients.

Bribing Physicians to Prescribe

GSK's sales representative reflected in their call notes their use of money, gifts, entertainment and other kickbacks to induct doctors to prescribe GSK drugs....

One really creative way to pay physicians to be exposed to marketing:

For example, in or about 2000 or 2001, GSK used 'Reprint Mastery Training Programs' or 'RMTS' to further promote drugs by purporting to pay physicians to train sales representative to review reprints of studies. Although the training was purportedly for the representatives, in fact, the sales force was already familiar with the materials. GSK typically paid physicians $250 to $500 to review the reprints.

Thus GSK simply paid physicians to use its drug, a practice characterized as kickbacks in the official complaint.  An article in the Guardian noted that the US Attorney involved in the case put it even more bluntly,

The sales force bribed physicians to prescribe GSK products using every imaginable form of high-priced entertainment, from Hawaiian vacations [and] paying doctors millions of dollars to go on speaking tours, to tickets to Madonna concerts.

Use of Key Opinion Leaders as Disguised Marketers

GSK also created a group of national 'key opinion leaders' ('KOLs') who were paid generous consulting fees. GSK selected many of these physicians based on their prescribing habits and influence within the community and used the speaker fees paid to these physicians to induce and reward prescribing of GSK's products. GSK used these individual to communicate marketing messages focused on the drug's marketing campaigns at the time, including off-label uses. Some physicians on GSK's speaker's board have been paid more than a million dollars for speaking on behalf of the company and recommending its drugs.

Thus key opinion leaders were paid specifically to market drugs, and as a reward, a bribe for prescribing drugs.

Consulting Fees as Kickbacks

In general,

In order to induce physicians to prescribe and recommend its drugs, GSK paid kickbacks to health professionals in various forms, including speaking or consulting fees, travel, entertainment, gifts, grants, and sham advisory boards, training,....

In particular,

During 2000 and 2001 at least, GSK also utilized events termed 'advisory boards' or consultant meetings and forums to disseminate its promotional message. Although these boards were purportedly composed of 'thought leaders' for the purpose of obtaining advice from the physicians, in fact, the 'advisory boards' were little more than promotional events coupled with financial inducement to prescribing and influential physicians.

Also,

GSK typically paid the physician between $250 and $750 to attend each local 'advisory' meeting. The payments did not reflect the value of services. The physician was not required to do anything but show up. GSK had no legitimate business reason to hire thousands of 'advisors' to 'consult' with the company about a single drug.

Manipulation of Continuing Medical Education

GSK also used so-called CME and CME Express programs and other sham training for marketing purposes, and to promote off-labe uses for the GSK prescription drugs.

Furthermore,

These CME programs purported to be independent eduaction free of company influence, but in fact functioned as GSK promotional programs disguised as medical education. GSK maintained control and influence over the purportedly independent CME programs through speaker selection, and influence over content and audience, among other things. Although third party vendors were usually also involved, they served only as artificial 'firewalls' that did not insulate the program from GSK's influence.

Summary

The legal documentation of the GSK settlement demonstrated how one drug company used an integrated, systematic campaign incorporating deception and bribery to sell drugs. Its elements included manipulation and suppression of the clinical research it sponsored, paying key opinion leaders to be disguised drug marketers, outright payments to physicians to prescribe drugs, and manipulation, again using payments to physicians, of supposedly independent continuing medical education. 

Note that while I summarized the elements of the stealth marketing campaign to sell Paxil, particularly for use in pediatric patients, the US government complaint also documents similar activities used to sell other drugs.  Furthermore, other stealth marketing campaigns have come to light through legal action, and many other instances of manipulation and suppression of clinical research, use of KOLs as disguised marketers, kickbacks and bribes, and manipulation of CME have been documented.

This means that any claims that:
- commercially sponsored clinical research provides clear, unbiased data that should drive clinical decisions
- health care professionals and academics paid as consultants by commercial health care firms are not influenced by these payments, and can provide clear, unbiased opinions
- commercially sponsored medical education provides clear, unbiased teaching
unfortunately must be viewed with extreme skepticism. This is particularly unfortunate given that most clinical research is now supported by commercial sponsors, and the majority of influential academics in medicine get some form of payments from the health care industry (look here).

Of course, there are some physicians who consult for commercial firms who actually provide clinical or scientific advice or assistance, and some commercially sponsored activities are honest. But we must wonder what garden path all those advocates for increasing industry "collaboration" to promote "innovation," and who regard conflicts of interest as "inevitable" and "manageable" are taking us down (e.g., look here and here).

Although the current settlement will require a huge payment, as I have said many times before (as early as 2008, here), do not expect such settlements to deter future bad behavior like that listed above.  The cost of the settlement will actually be spread among all company shareholders, all company employees, and likely patients and taxpayers.  However, the settlement will entail no specific negative consequences to the people who authorized, directed, or implemented the bad behavior.  In particular, executives whose remuneration was swollen by proceeds from the sales of affected drugs, and the health care professionals who willingly accepted what the US Attorney called bribes will not pay any sort of penalty.  The bad behavior listed above was doubtless personally very profitable for some people.  Unless people who indulge in such behavior face the possibility of penalties worse than their expected gains, expect such bad behavior to continue.

In fact, as the New York Times reported,

critics argue that even large fines are not enough to deter drug companies from unlawful behavior. Only when prosecutors single out individual executives for punishment, they say, will practices begin to change.

'What we’re learning is that money doesn’t deter corporate malfeasance,' said Eliot Spitzer, who, as New York’s attorney general, sued GlaxoSmithKline in 2004 over similar accusations involving Paxil. 'The only thing that will work in my view is C.E.O.’s and officials being forced to resign and individual culpability being enforced.'

True health care reform would strive to eliminate important conflicts of interest affecting clinical research and medical education.  Specifically, it would prevent corporations that sell health care products or services from controlling clinical research meant to evaluate these products or services.  It would seek to eliminate serious conflicts of interest affecting health care professionals.  Finally, it would prevent vested interests from controlling medical education.  Not that I expect any such reform in the near future, it would be too threatening to those who have personally benefited from the current system.

Hat tip to Dr Howard Brody whose Hooked: Ethics, Medicine and Pharma blog scooped me on the details of the settlement relevant to study 329.

ADDENDUM (11 July, 2012) - see also this post on the 1BoringOldMan blog.