Pfizer Fine in Perspective

The odd thing about the Pfizer story is that it is old news. 
Fierce Pharma href="">wrote
about it on 26 January 2009, and Neuron Culture href="">posted
about it, on 27 January 2009.  Yet it just appeared in the New
York Times:

Pays $2.3 Billion to Settle Marketing Case


WASHINGTON -- The pharmaceutical giant Pfizer agreed to pay $2.3 billion
to settle civil and criminal allegations that it had illegally marketed
its painkiller Bextra, which has been withdrawn.

It was the largest health care fraud settlement and the largest
criminal fine of any kind ever.

Although the investigation began and largely ended during the Bush
administration, top Obama administration officials held a news
conference on Wednesday to celebrate the settlement, thank each other
for resolving it and promise more crackdowns on health fraud.

Fierce Pharma pointed out that the charge was reveal in Pfizer's 2008
fourth-quarter earnings report.  It also was href="">mentioned
on the Wall Street Journal's blog, on 26 January 2009.  Yet it
just now shows up now in the mainstream press, presumably because the
Department of Justice recently announced it in a press conference.

In January, there wasn't a lot of buzz about it, but now, it is the
third most-emailed and eighth most-blogged NYT article. 

Perhaps the current buzz is some kind of publicity stunt by the
Administration.  If so, it may not be having the desired
effect.  David Dobbs mentioned that the right-wing gossip machine
is trying to spin this as proof that the Administration plans to
federalize health care.  Never mind that the investigation took
four years to complete.

Anyway, some of the alternative medicine sites are spinning this
another way.  They point to this as evidence that big
pharmaceutical companies are inherently corrupt.

Perhaps, although I am not sure that there is any company of comparable
size that could cast the first stone in this particular riot of

The NYT makes the point, which is probably the most salient: the size
of the fine was partly due to the fact that Pfizer previously had been
fined for similar marketing practices for Neurontin.  Thus, the
court considered this to be a repeat offense. 

The perspective I would offer is this.  I happen to have some
inside views of pharmaceutical companies.  This is not deep, or
extensive, but it is revealing.  I have developed the impression
that pharmaceutical companies consist of two fairly distinct
cultures.  There are the scientists, and there are the business
folks.  The scientists, by and large, are decent people. 
They really want to contribute to the overall health of society. 
They also want their jobs, but they aren't going to do anything devious.

On the other hand, the business ends of the companies have an entirely
different culture.  They haven't gotten this memo: href="">Now
is the time for a less selfish capitalism; or this one: href="">Shareholder
value re-evaluated.

A palace revolution in the realm of business is toppling
the dictatorship of shareholder value maximisation as the sole guiding
principle for corporate action. As so often with regicide, many of the
knives are in the hands of the old regime's own henchmen. Jack Welch,
the former General Electric chief executive who ushered in the reign of
shareholder value maximisation a quarter-century ago, told the
Financial Times last week that "shareholder value is the dumbest
idea in the world"
. [emphasis added]

See the href="">original
interview with Welch for the basis for his change of heart. 
While you're at it, read the entire Financial Times collection on href="">The Future of

One could argue that the situation in pharmaceutical companies is
similar to the situation in biology in general, as described in the
Nature article: href="">Biologists
Rarely Understand How Their Work Is Being Weaponized.  That
is: good research, bad application.  Much of society is like
that.  I'm not sure that anyone is able to cast the first stone.

This is not to say that is is OK because everyone does it, to some
extent.  It is wrong, which is why I haven't talked to a
pharmaceutical representative in over a year.  I still get their
mass mailings, but I just throw them away.

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