Annoy Obama, Lose Your Job?
Forest Laboratories, a pharmaceutical company best known for its anti-depressant products, is in a pickle. Six months ago, the company settled allegations it improperly marketed its Lexapro and Celexa products by paying a $313 million fine to the feds. End of story, right? Not so fast. In a new development, the Obama administration is threatening to ban the company’s CEO, Howard Solomon, from doing business with the government, essentially giving Forest’s board of directors an ultimatum to fire him or watch the company collapse as it loses sales to, for example, Medicare beneficiaries.
When I first read this, I was outraged at another job-destroying instinct of the Obama administration. But then I came across a 2009 New York Times article detailing the company’s Lexapro marketing plan and alleging that the many educational events sponsored by Forest were actually thinly disguised opportunities to put money in prescribers’ pockets. Paul Thacker, at the Project on Government Oversight, presents much of the evidence and then summarizes the case for dismissing Mr. Solomon:
So here’s where things get a little tricky and a tad bit confusing. Despite the damaging evidence staring them in the face, Forest seems nonplussed by DOJ’s action against their CEO.
“Numerous other major pharmaceutical companies have plead guilty to much more egregious offenses, and none of them has faced the exclusion of a senior executive who has not himself been convicted of a crime or pleaded guilty to a crime,” stated Herschel S. Weinstein, Vice President and General Counsel.
True. But we thought the “everybody else was doing it too, Mom,” defense went out in middle school. Guess we were wrong.
The government has been signaling for the last couple years that pharmaceutical executives should expect to become targeted for prosecution or debarment. Mr. Solomon is just the latest turn of the screw.
Help me out Richochet members. Is this latest federal move a heavy-handed effort to intimidate legitimate businesses into bending the health care cost curve, or vigorous enforcement of the law to protect patients and taxpayers from unscrupulous drug marketers?
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Aug '10
Re: Annoy Obama, Lose Your Job?
It seems to me that Forest has chosen to market their products to doctors, not patients. I personally think this is defensible, as the doctor is probably in a better position to judge the risks and benefits. So I don't see a lot of "ask your doctor about..." type adds for Forest. The details of how you market a drug to doctors, however, may look like underhanded paybacks to some. I am too distant to judge.
I had heard that Forest has a policy that, if a doctor wishes to prescribe their drug to a patient that cannot afford it, Forest will provide the drug free to the doctor to dispense to patient. Not the most money-grubbing of practices.
Edited on Apr 26, 2011 at 9:48amFeb '11
Re: Annoy Obama, Lose Your Job?
I'm sorry, was that last question rhetorical?
Apr '11
Re: Annoy Obama, Lose Your Job?
I don't understand why they just don't prosecute the company instead of fining them and then trying to strong arm by threatening to lock them out of government largesse if they don't remove the CEO. Sounds like a shakedown to me.
Where do these fines windup by the way. If they have hurt the consumer in some way by their underhanded marketing, how does fining them stop any of the behavior.
If they have broken a law charge them, prosecute them and convict them. Anything less seems as unseemly as the marketing strategy of the very people their threatening to freeze out.
Re: Annoy Obama, Lose Your Job?
It is one thing to enforce the law -- and that the Obama administration should do. It is another to play the crony capitalist game. This is a power no President should have.
Nov '10
Re: Annoy Obama, Lose Your Job?
Not a clinician, so I can't really speak to this directly, but I do remember "drug lunches" from medical school, and I can't say that anyone I knew ever prescribed a drug just because they had been given a nice lunch or dinner. You've been more of a clinician than I ever was--do you think the drug companies' gifts, recently sharply curtailed, ever made much difference in which drug was chosen for a particular patient?
Jun '10
Re: Annoy Obama, Lose Your Job?
"... drug companies' gifts, recently sharply curtailed..."
That's an understatement. They've been eliminated.
It's highly insulting to the medical profession to imply that a drug would be prescribed or a device inserted because the docs were bribed.
I do, however, think there was quite a bit of excessive courting of docs. (I remember having fun on a snow mobile excursion with surgeons in Aspen as part of the out-reach my husband and his colleagues used to take part in many years ago.) But the truth is, docs are busy people. Sending in gorgeous sales reps to get their attention only goes so far. It was the socializing at conventions that would enable the pharmaceutical firms to pin them down and discuss new products, pick their brains about what innovations they'd like to see, and just develop working relationships.
I remember one sales director answering a new sales rep's question about how to reach the doctors in his sales territory. "First," he said, "Buy a very larger boat...."
All industries do this to a certain degree, but it gets touchy when health care is concerned.
Oct '10
Re: Annoy Obama, Lose Your Job?
OK, consider what the company admits doing, who was in its leadership when they were doing it.
1) "Six months after Forest Labs pleaded guilty to obstruction of justice, distributing an unapproved drug and illegally promoting two other meds..."
2) "To settle matters, Forest made a $313 million payment that included $164 million in criminal penalties.. and signed a corporate integrity agreement. "
For the first time almost ever I find myself on th side of the administration.
Sorry.. but if you are the CEO of this kind of outfit, the board should fire you, then resign themselves for an unconscionable lack of oversight. If this was a supplier selling untested or unapproved rivets to the Air Force, would you want to continue to deal with them.. particularly when they won't clean house themselves?
Without the minimal corporate hygiene of firing the CEO, what does the corporate integrity statement communicate to lower level staff? It means keep doing whatever you were doing before but be more discreet.
May '10
Re: Annoy Obama, Lose Your Job?
Remember...this is the dear leader who alleged doctors were doing more amputations in order to make money.
http://www.youtube.com/watch?v=SG56B2et4M8
or taking your tonsils out for big bucks.
http://www.youtube.com/watch?v=ZhNeGYYPgIE&feature=related
What insanity gripped this nation when we made this man-child president...
Edited on Apr 26, 2011 at 10:25amSep '10
Re: Annoy Obama, Lose Your Job?
If they broke the law prove it in court and have them face legal sanction. This executive (and any other really) have shown they lack discrimination in the use of power and should not be allowed to bully business like this.
Mar '11
Re: Annoy Obama, Lose Your Job?
This leaves a lot of room for the government to bully people and companies they don't like. Where is the rule of law in this? Another argument for smaller government. The bigger the government is, and the bigger their programs, the more temptation and ability to bully.
Consequences like this should be based on the rule of law and be ultra-transparent - this seems to be neither.
Nov '10
Re: Annoy Obama, Lose Your Job?
By the way, I fully agree that this is the heart of your question, and the right answer. But I think my first comment makes an interesting tangent. The whole premise, forbidding the "drug lunch" (which I remember as a drug company buying submarine sandwiches or the like to serve at a previously scheduled conference), strikes me as an unnecessary over-reach of government power to begin with.
Jul '10
Re: Annoy Obama, Lose Your Job?
Sad, but nothing new. There is no final settlement with this administration. Look at GM, Chrysler, and BP. For those in office today, the end of the legal penalties is merely where the political penalties start.
Plus side: maybe this will dampen crony capitalism as trust in Washington declines.
Sep '10
Re: Annoy Obama, Lose Your Job?
I would doubt a "drug lunch" ever was the deciding factor. There is a theory in advertising about "top of mind" presence. The little gifts, pens, pads, lunches, etc, can make sure that your brand is the first to pop up when making purchasing decisions. It should go without saying that I think that falls well below the bar of deceptive or unethical practices.
Jun '10
Re: Annoy Obama, Lose Your Job?
To me, this is no different than the Westboro Baptist Church issue. You can loathe what they say, but you can't deny them the right to say it. It sounds like this company, and by association, the executive, are pretty slimy. However, I object to the government targeting a specific businessman by threatening him and the company's right to do business and to make a living. If he has broken the law, then yes, he must pay the consequences. Once he has repaid that debt to society, he can start over. The government cannot tell a business who should lead it. This is a slippery slope to more and more soft despotism. If there were rules that can legally weed out the company from winning bids, so be it, but to tell a company who can run its business, is beyond government's scope. Don't be fooled.
Jan '11
Re: Annoy Obama, Lose Your Job?
Obama's perspective is inverted. In foreign policy, he prosecutes the War on Terror as a series of criminal acts. Domestically, he's targeted his own "enemies of the state" and he's at war.
Suppose we contrast two mythical people. One loves the Nazis, hates Jews and blacks, and thinks there's nothing wrong with rape ... but he never commits a crime. The other is a sainted humanitarian, loves puppies, and is a pillar of the community ... but one night he drinks and drives, and plows his car into a empty storefront.
Of course, we prosecute the humanitarian. It doesn't matter how we feel about him, or whether we approve of his attitudes. We prosecute the act, not the person.
Now consider how war is different. When we're at war, we do exactly the opposite. We fight the person, not the act. The mere fact that he's an enemy soldier means that he's subject to attack, even if that particular soldier didn't do anything.
What strikes me is that the normal process of crime and punishment is being pursued personally. In a manner of speaking, we're punishing the person instead of the act.
Apr '11
Re: Annoy Obama, Lose Your Job?
What "unfair marketing techniques" take place at the capital everyday that either go by unknown, unnoticed or blatantly out in the open. Who is our advocate. I'm not saying we ignore illegalities but "he who is without sin...cast the first stone" The very ones who hold the most power of our government are the very same ones who are the most abusive and corruptible by money and promises.
Re: Annoy Obama, Lose Your Job?
Lucy, I used to grab the free sandwich and escape as soon as possible. And the now-forbidden hoagie is the extent of my pharma freebies. To this day, I have trouble remembering drug brand names--my Boston medical school frowned on any but the generic chemical name--so I don't think the occasional sandwich influenced me.
Re: Annoy Obama, Lose Your Job?
KC, you are exactly right. That's what troubles me about targeting the Forest CEO for removal: his crime is who he is and what he represents rather than anything he's been proven to have done wrong in a court of law.
Edited on Apr 26, 2011 at 11:40amRe: Annoy Obama, Lose Your Job?
I agree...and yet, I am concerned. I'd need to read a lot more of the record to agree that the settlement indicated true recognition of criminal culpability rather than a cost-effectiveness calculation.
The problem with the drug promotion rules is that the boundary between perfectly legal and criminally actionable can be vague. For example, physicians can use approved drugs "off-label" for unapproved indications but pharma companies aren't allowed to "promote" for such purposes. What, exactly, does this mean?
What I've seen so far indicates that Forest funded an aggressive campaign of physician-to-physician outreach and highlighted favorable published data about its drugs over unfavorable data. A company accenting the positive is hardly criminal behavior.
And what about the fact that Forest went through the legal process, reached an agreement with prosecutors, and only later discovered that the deal wasn't a deal at all? In football, the latest DOJ effort would be called a late hit after the whistle on the Forest litigation
Jun '10
Re: Annoy Obama, Lose Your Job?
If the company broke the law under this guy's watch he should be banished, he should be jailed. In the military a leader is held responsible for the actions of his organization. This personal responsibility insures the organization follows the rules. Allowing an organization to get off with a fine and no one being held accountable (other than the accountant) simply puts things on the footing of "how many laws can we afford to break before it starts eating into our profits."
I think the folks here, especially those with military experience, can understand my point here. Could this be the kind of think Obama's folks are trying to do in some ham handed manner?