Shielding Big Pharma

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[sSRI-Research] TomPaine.com [Pizzo] Shielding Big Pharma

 

 

 

 

 

 

Shielding Big Pharma

http://www.tompaine.com/print/shielding_big_pharma.php

 

 

Stephen Pizzo

January 25, 2006

 

 

 

Stephen Pizzo was an investigative journalist for 25 years,

whose articles have appeared in The New York Times, The Washington

Post, The San Francisco Chronicle, Forbes and other publications.

Pizzo also co-authoredbest-seller, Inside Job: The Looting of

America's Savings and Loans, which was nominated for a Pulitzer. The

New York Times

 

It's an image that haunts pharmaceutical CEOs' private

moments-Big Tobacco CEOs swearing to tell the truth on live

television. And later, tobacco companies were ordered to pay billions

of dollars in damages to their product's victims.

 

Pharmaceutical CEOs can't wipe those images away, because they

know that they also knew. They too knowingly and purposely obfuscated,

obscured, fudged the facts and, when push came to shove, lied about

the known dangers of some of their most profitable products. Now they

are terrified that their crimes of commission and omission could reap

them the same whirlwind harvest of accountability.

 

That's really all you need to know to understand what George W.

Bush's FDA was up to last week. Ostensibly, last week's news

conference was to unveil new rules-long demanded by consumer

advocates and fiercely fought by drug companies-requiring clearer

labeling of prescription drugs, particularly about possible harmful

side effects.

 

Drug companies had successfully fought such a rule for more than

two decades. They convinced the incoming Reagan administration to nix

a similar Carter administration rule that was about to go into effect.

Drug companies did not want to produce marketing materials that could

scare off customers-so they didn't. When the University of Wisconsin

conducted a study of industry-produced drug pamphlets, they concluded

that the information contained in the pamphlets contained only half

the story-the good half. Particularly lacking were clear, unambiguous

warnings about any given drug's potential negative attributes.

 

The new rules announced by the FDA last week requiring clearer

labeling and more detailed warnings represent a long overdue,

pro-consumer change for the FDA-which causes one to wonder what's

really up. Whenever the fiercely anti-regulation, pro-business Bush

administration sides with consumer advocates, there must be more to

the story. And there was.

 

Tacked onto that consumer-friendly drug labeling rule change was

another rule change, one that couldn't have been less

consumer-friendly if it had been written by Big Pharma itself-which it

likely was. It represents nothing less than a multibillion dollar gift

to the pharmaceutical industry.

 

The second rule change announced that day would bar state courts

from hearing individual or class-action liability suits against drug

companies. The reasoning behind this change was that, because a

federal agency-the FDA- approves drugs before they can be marketed to

the public, only federal courts should hear cases where someone claims

they were injured by those drugs. It's called " federal preemption, "

and, if upheld, it will require anyone wanting to sue a drug do so in

federal court.

 

Deputy FDA commissioner Scott Gottlieb explained the logic

behind federal preemption.

 

We think that if your (drug) company complies with the FDA

processes, if you bring forward the benefits and risks of your drug,

and let your information be judged through a process with highly

trained scientists, you should not be second-guessed by state courts

that don't have the same scientific knowledge.

 

It may come as no surprise that not everyone agrees.

 

" This is a sneak attack on consumer rights, " responded Joan

Claybrook, president of Public Citizen. " Bush is once again abusing

his executive powers, this time in his attempt to protect the big

pharmaceutical companies from the consequences of their actions.

Thousands of people in this country have died or been seriously

injured by drugs approved by the FDA, and this administration is

saying it doesn't think people should have any recourse. "

 

Third Time's The Charm

 

Republicans tried to pass legislation to shield Big Pharma from

litigation. But with so much angst roiling voters over soaring drug

costs, it proved too hot a potato. So the Bush administration turned

to the courts, hoping they would rule in favor of federal preemption

in drug liability cases. But those attempts failed as well.

 

With only three more years left in Bush's tenure, time was

running out. That's why anti-regulation Bush administration officials

decided to go the regulatory route. By employing executive branch

regulatory authority, the administration was able to spare Republicans

in Congress from having to fight for such an explosive pro-industry

measure during an election year while still rewarding Big Pharma for

the generous support-roughly $84 million- for Republican candidates

over the past decade. It was a win/win situation.

 

Too Close For Comfort

 

You could almost hear the sighs of relief from drug company

executives last week when the FDA finally went public with its federal

preemption rule. It came not a second too soon for them.

Tweedledee-Big Pharma had just been rescued by its federal friends

from the fate that befell Tweedledum-Big Tobacco.

 

The rule change is timely because law firms-some the same firms

who took Big Tobacco to the cleaners a few years ago-now have Big

Pharma firmly in the crosshairs. It would be so easy. All those law

firms would have to do is white out the old defendants-from Brown and

Williamson and Phillip Morris- and type the names of drug makers like

Merck and Pfizer. After all, the causes of action were the same:

 

a.. Both Big Tobacco and Big Pharma produce and sell products

that often cause injury or death when used as directed.

a.. Both industries knew that some of their most profitable

products were injuring and killing people, and either hid such

evidence, lied about it or both.

a.. Both industries hired their own experts to produce often

phony, always misleading non-peer-reviewed, " research " designed solely

to cast doubt on any genuine research by outside experts that came to

conclusions that could hurt sales.

a.. Both industries attacked, slandered and punished those

within or associated with their industries who broke the company

stonewall by trying to sound a warning .

a.. Finally, both industries enjoyed overly cozy relationships

with government-relationships that enabled them to maximize profits

for a long as possible, regardless of the harm such products were

known to be causing. (In this regard, Big Pharma has gone even

further, by compromising the FDA, the very federal regulatory agency

that is supposed to protect consumers.)

The growing number of drug-liability lawsuits popping up in

state courts had worried drug companies for years. State court juries

are considered softies when it comes to these kind of David v. Goliath

encounters. Liability laws are set by states and tend to favor

consumers, which is why drug companies want such cases moved to

federal courts. Some consumer advocates believe the ultimate goal of

this FDA is to take that a step further, cutting off even federal

court to injured plaintiffs, leaving just FDA as the final arbiter in

such matters.

 

And state juries tend to sympathize with consumers over big

corporations. The failure to get litigation protections for Big Pharma

through Congress left them exposed to the same kind of financial

trashing Big Tobacco suffered in state courts.

 

The Vioxx Nightmare

 

Then Vioxx happened. Big Pharma's worst nightmare was realized.

Merck's miracle painkiller had become a record-breaking cash cow for

the company. The only trouble was, it was killing people in alarming

numbers- upward of 55,000 Americans before it was finally pulled from

the market. But this was known to both Merck and the FDA long before

that-and both had ignored, denied and even suppressed evidence of this

deadly side effect. )

 

But it's hard to just ignore that many dead customers, and it

wasn't long before state court dockets were filling with class-action

suits against Merck. Then Merck was slapped by a Texas jury with a

quarter-billion-dollar judgment in one of the first Vioxx cases to go

to trial.

 

But things got worse. Vioxx users-or their surviving heirs-began

elbowing their way into state courts across America. As of Nov. 30,

2005, Merck admits to being served or being named as a defendant in no

fewer than 9,200 lawsuits brought by 18,250 plaintiff groups, each

alleging personal injuries from the use of Vioxx. While most of those

cases are still in the courts or on appeal, stock analysts warn that

if Merck keeps losing Vioxx-related suits, it could cost the company

as much as $50 billion.

 

Tale Of Two Industries

 

Almost everywhere one looks, this tale of two industries

intersect. It's like watching the remake of an old movie: the faces

change but the characters are the same. It's another reason Big Pharma

needed this rule change, and needed it now.

 

Stop for a moment and try to imagine a state court jury of 12

ordinary Americans, hearing that testimony as the widow of a Vioxx

victim softly sobs at the plaintiff table.

 

You can be quite sure lawyers for Merck have imagined it. And

not just Merck. There isn't a major drug company that doesn't have a

similar liability problem looming over one or more of its FDA-approved

drug products.

 

That was the driving motivation for last week's FDA rule change,

which claimed that only federal courts have jurisdiction to hear such

cases-federal courts now populated more than ever before by

conservative judges. Federal courts where, as in the case below,

defendant drug companies can count on the support from a " friend of

the court " with serious heft-the FDA.

 

Victor Motus killed himself with a shotgun six days after he

began taking Zoloft, an anti-depressant he complained was making him

" crazy. " His widow sued Pfizer, the drug's manufacturer, charging that

the company should have warned doctors that Zoloft could cause some

people to have suicidal thoughts. But Flora Motus soon discovered the

pharmaceutical giant wasn't her only adversary. The California woman

was also fighting the U.S. government.

 

The FDA filed a legal brief on Pfizer's behalf in the fall of

2002, asserting that anti-depressants don't increase the risk of

suicide. " Had Pfizer given a warning as to a causal relation between

Zoloft and suicide, the FDA would have disapproved the warning, " the

agency argued.

 

That court ended up dismissing Motus' case against Pfizer.

 

So there you have it-the FDA's rule changes last week, decoded.

Better labels on prescription drugs may or may not make consumers

safer, but drug companies hope they will make them safer from

lawsuits. Remember when Big Tobacco finally agreed to put warning

labels on cigarette packages? They, too, had opposed clear warning

labels for decades. But once the evidence of their product was killing

millions of people every year became undeniable, they embraced the

idea. It had become increasingly clear to Big Tobacco that the jig was

up. Sooner or later, juries would hear all the ugly evidence. So when

that time came, the tobacco company lawyers' defense would be: " The

government wanted us to put warning labels on our products. So we put

warning labels on them. Customers smoked anyway. So how can you hold

us liable? They were warned. "

 

But there was serious flaw in Big Tobacco's strategy: It had

left home plate-state courts-unguarded. That lapse cost Big Tobacco

dearly, and Big Pharma took note of that nearly fatal oversight. So

last week, besides requiring clearer warning labels, the FDA also

strung concertina wire around home plate for Big Pharma.

 

The Homeland Security Defense

 

The FDA's claim of federal preemption for drug liability cases

will certainly be challenged in court by consumer advocates. If they

are successful in overturning that rule, get ready for the

administration's last gambit-declaring Big Pharma part of our homeland

security/defense private sector infrastructure. That would put

pharmaceutical companies into the same category as Northrup, Boeing,

Halliburton and other large defense contractors that produce products

vital to the national defense and therefore deserve special, protected

relationship with the federal government.

 

The administration will argue that bioterrorists lurk, as do

new, drug resistant nation-crippling pandemics like avian flu, and

that only large drug companies can produce the new drugs and in large

enough amounts needed to defeat these new threats. It will argue that,

sure, a certain number of those vaccines and drugs will inevitably

injure or kill a certain number of people. But we are at war, after

all, and during war innocent people die. As sorry as we are to see

such deaths occur, they will say, allowing " greedy lawyers " to bleed

drug companies white in such cases would be like putting defense

contractors out of business in the weeks following the Japanese attack

on Pearl Harbor.

 

That will be the Bush administration's argument, an argument

that is already undergoing early market testing. In December,

Republican leaders attached many controversial provisions to the

Department of Defense appropriations conference report to include

numerous extraneous items for special interests that could not pass

the Senate and House on their own. One of them gave the drug industry

" unprecedented immunity, " according to Democrats:

 

Republican leaders added provisions to the conference report

after cutting a back-room deal in the middle of the night. The

conference report grants sweeping immunity to drug companies for

injuries caused by vaccines and drugs and for the administration of

those vaccines and drugs, even if they are made with flagrant

disregard for basic safety precautions. Moreover, the compensation

program is a sham, leaving people who become injured from a drug or

vaccine without recourse. "

 

There is one big difference between the Big Tobacco and Big

Pharma stories, though. Big Tobacco faced a hostile FDA under Bill

Clinton, while Big Pharma has a true friend in this FDA, and, for that

matter, this White House. The same administration is now trying its

damnedest to whittle those penalties against Big Tobacco down from

$130 billion to $10 billion.

 

Who knows, the administration may just pull Big Tobacco's

chestnuts out of that fire. But Big Pharma figured a stitch in time-a

federal preemption rule-was worth nine.