Koch's Comments: Unconscionable greed and Obama's betrayal

A $2.3 billion fine was recently levied against the pharmaceutical giant Pfizer for a health care fraud. The settlement with Pfizer, the largest ever imposed, was announced at a press conference by Kathleen Sebelius, Secretary of Health and Human Services. 

The New York Times reported that Pfizer "had illegally marketed its now-withdrawn painkiller, Bextra," and that the company was turned in by "six whistle-blowers [who] will collect $102 million from the federal share of the settlement, and more from states' shares." 

The Times also reported that "the government charged that executives and sales representatives throughout Pfizer's ranks planned and executed schemes to illegally market not only Bextra but also Geodon, an antipsychotic; Zyvox, an antibiotic; and Lyrica, which treats nerve pain. While the government said the fine was a record sum, the $2.3b. fine amounts to less than three weeks of Pfizer's sales."

By way of background, the Food and Drug Administration (F.D.A.) approved the sale of Bextra in 2001 to treat arthritis and menstrual cramps. The Times in its article pointed out that "the drug was not approved for the treatment of acute pain, nor was it shown to be any more powerful than ibuprofen. But Pfizer instructed its sale representatives to tell doctors that the drug could be used to treat acute and surgical pain and at doses well above those approved, even though the drug's dangers - which included kidney, skin and heart risks - increased with the dose, the government charged. The drug was withdrawn in 2005 because of its risks to the heart and skin."

While doctors can legally prescribe any F.D.A.-approved drug for any purpose, notwithstanding the drug's F.D.A. approval was for a specific treatment, drug companies are not allowed to urge its use for any purpose other than prescribed by the F.D.A. While the Times does not mention it, I believe I heard a television commentator state that Pfizer specifically asked the F.D.A. for permission to advocate the use of Bextra for other purposes. The F.D.A. rejected that request, which makes the alleged actions even more horrible.

The Times quotes one of the whistle-blowers as saying, "The whole culture of Pfizer is driven by sales, and if you didn't sell drugs illegally, you were not seen as a team player." 

I’m sorry to be quoting the Times so much, but they did a bang-up job of investigating this case. The article also states: "Almost every major drug maker has been accused in recent years of giving kickbacks to doctors or shortchanging federal programs. Prosecutors said that they had become so alarmed by the growing criminality in the industry that they had begun increasing fines into the billions of dollars and would more vigorously prosecute doctors as well." 

So, you may ask, what's my point?

My point is that this settlement with a huge fine was not sufficient punishment for a company referred to by one US attorney as recidivist. He stated: "Among the factors we considered in calibrating this severe punishment was Pfizer's recidivism."

The CEO and Board of Directors should have been indicted. That is truly the only way to stop the practices which produce so much wealth for the company, its stockholders, officers and directors. The allegations against Pfizer are reminiscent of price fixing by some prime American companies of 50 or more years ago.  At that time, the Justice Department did not believe that the levying of fines would prevent recidivism, and it indicted company officials, some of whom actually went to prison.

The investigation of Pfizer was undertaken by the Bush administration. No one would have expected that a Republican administration would punish its business allies with prison terms. But we would have hoped that the Obama administration would act differently. That is not happening, and it is shameful. 

President Obama has caved on an additional matter relating to the pharmaceutical industry. That issue involves the barring of Medicare volume discounts which would save Medicare billions of dollars. In his Journal of August 28, 2009, Bill Moyers highlighted one of Obama's presidential campaign commercials. A transcription follows. Barack Obama:

The pharmaceutical industry wrote into the prescription drug plan that Medicare could not negotiate with drug companies. And you know what? The chairman of the committee who pushed the law through went to work for the pharmaceutical industry making $2 million a year. Imagine that. That's an example of the same old game-playing in Washington. I don't want to learn how to play the game better.  I want to put an end to the game-playing."

Moyers' comment cannot be improved upon.  He said:

Now look at this recent story in the Los Angeles Times. Lo and behold, since the election, the pharmaceutical industry's $2 million dollars a year superstar lobbyist Billy Tauzin has morphed into President Obama's pal. Tauzin said the president has promised not to pressure the drug companies to negotiate with the government for lower drug prices and has agreed not to allow cheaper drugs to be imported from Canada or Europe - contrary to the position taken by candidate Obama... ?

What's going on here? Why is the president selling us out? Why has he become a defender of the pharmaceutical industry?

To be fair, that industry is supporting the Obama universal medical care initiative and is footing the multi-million dollar bill for television advertisements supporting the proposed health care legislation. Of course, the pharmaceutical industry is also providing campaign contributions to every Democratic and Republican politician supporting its position to limit the industry's responsibility for contributing to the cost of universal health care.

The President has confirmed his agreement with Billy Tauzin to limit the industry's contribution to $80b. over a ten-year period, or $8b. a year. In contrast, a volume discount of 30 percent on more than $800b. in drugs purchased annually by Medicare would produce $240b. a year in cost savings to the government. 

What happened to the Obama pledge of "change?"

It appears to me on this issue he is no different than Bush and the Republicans. 

The betrayal by political reformers promising change but acting like the politicians they asked us to help them defeat is age-old. It is happening before our very eyes, less than a year into the new administration.  How sad.