Pfizer's board turned a blind eye to criminal guilty pleas the company entered over marketing practices for medicines such as Bextra and Neurontin. The fund's lawyers argue that the directors' inaction has hurt the value of investors' stakes in the company.
According to Bloomberg:
"The $2.3 billion settlement to resolve government probes into Pfizer's marketing practices was the largest accord in history to address such sales techniques. Proceeds from the accord went to government health agencies including Medicare, Medicaid and the military's Tricare health plan."
In separate drug company lawsuit news, GlaxoSmithKline has agreed to pay more than $1 billion to resolve more than 800 cases alleging its Paxil antidepressant caused birth defects, according to sources familiar with the settlements.
The accords provide an average payout of more than $1.2 million to families of affected children, but still leave more than 100 birth-defect cases pending. Officials of Glaxo said they set aside $2.4 billion to resolve litigation over Paxil and the diabetes drug Avandia.
"The company had $11.7 billion in U.S. Paxil sales for nine years starting in 1997, according to documents made public last year in a Pennsylvania trial over birth-defect claims."
Pfizer not only made repeated violations of federal laws when illegally marketing their drugs, they did so knowingly in what is being called “a calculated bet that the negative consequences of getting caught would never become significant.”
Instead of cleaning up their act long ago, Pfizer, the world’s largest drug maker, paid out the largest health care fraud settlement in history -- $2.3 billion -- for illegally promoting uses of four of its drugs, including Bextra.
Now, the company’s investors are mad and are suing Pfizer for all lost profits and other benefits due to their “systematic disregard for the laws governing its fundamental business …”
The Arrogance is Appalling
The truth is, drug companies continue to display this type of blatant disregard not only for federal laws but also for public health because they are unlikely to suffer much of a consequence for their crimes.
Most people have no idea about how shielded these huge drug companies really are.
Pfizer engaged in illegally promoting their drug Bextra for off-label use, despite their knowledge that it was associated with an increased risk of stroke and heart attack.
Bextra was pulled from the market in 2005, but not before many people were damaged by its use. When Federal prosecutors realized that convicting Pfizer would likely be a corporate death sentence (as any company convicted of major health care fraud is excluded from Medicare and Medicaid), they cut Pfizer a deal. Just as the big banks on Wall Street were deemed “too big to fail,” Pfizer was deemed “too big to nail.”
Prosecutors claimed to be concerned about the loss of jobs by Pfizer employees and financial losses to Pfizer shareholders as a result of being excluded from the Medicaid/Medicare programs.
So the prosecutors charged a Pfizer subsidiary, Pharmacia & Upjohn Co., instead. In fact, this particular subsidiary company was created specifically for this purpose, as a sacrificial lamb, having been incorporated the very same day its lawyers filed a “guilty” plea in another case involving kickbacks.
In the end, all Pfizer lost was about three months’ profit, but all contracts, including those with Medicaid and Medicare, were spared.
This is just one more example of your federal government failing to protect you, and opting to protect big business’ interests instead.
Like the child who spoils their dinner with candy, drug companies know it’s far easier to ask for forgiveness than permission. But even after being “caught” red-handed, they are merely slapped on the wrist and left with penalties that are the equivalent of being sent to bed without supper.
Pfizer is Not Alone in Their Actions
Pfizer may be the world’s largest drug company, but they are far from the only one that operates on such unethical scruples.
Just last month, drug maker GlaxoSmithKline agreed to pay more than $1 billion to resolve more than 800 lawsuits alleging that Paxil, an antidepressant, caused birth defects. In all, the company has paid out more than $2 billion over Paxil-related injuries, which along with birth defects include suicides, attempted suicides and addiction problems.
In a sign of the times, the company announced dutifully that it has set aside $2.4 billion to resolve such litigation involving not only Paxil but also Avandia, a diabetes drug that remains on the market despite steep heart attack risks.
Once again, the company is left with a mere slap on the wrist (Paxil generated $11.7 billion in sales over a nine-year period) while the people hurt by the drugs are left permanently injured and in some cases killed.
No amount of money can give a family back their lost loved one or make up for a child’s lifelong heart defect, caused by its mother taking Paxil while pregnant. But Pfizer, GlaxoSmithKline and many others just like them will continue to carry on business as usual, with lawsuits like these regarded as a small inevitable cost of doing business.
Another Reason to Take Control of Your Health
Drug companies are not looking out for you; they are looking out for their profits and they are now in full collusion and cooperation with the government. The government has long ago abandoned its role to protect you and your family from these pernicious forces, now they are partners in crime to pillage as much as they can from you and your family.
You need to understand that any corporation's primary and essential responsibility is to their shareholders -- NOT to you -- and the sooner you realize this, the better.
Drug companies have accumulated so much wealth, power and government influence that so far they have been able to largely escape any serious consequences that would prevent them from changing their ways.
So until real systemic change takes place, your best health strategy is quite simply to employ and maintain a naturally healthy lifestyle that will optimize your body’s innate healing abilities and minimize your need for the drug companies’ latest concoctions.