What is it about the number $3 Billion that makes it so popular?
First we had J. P. Morgan Chase and their nasty trading loss in that amount. Now we have GlaxoSmithKline agreeing to pay a combined $3 Billion in fines to the Federal Government because of their unscrupulous marketing strategies and false claims for their products. At least Chase merely made a mistake while GSK had an illegal and reprehensible marketing strategy in place to improve their bottom line.
What is particularly disturbing is GSK’s practice of offering physicians expensive gifts for prescribing their products – making claims that they were beneficial in ways for which they were never approved by the FDA. From the pharmaceutical reps I know, this practice is hardly limited to GSK. It is a nearly universal industry-wide strategy. In other words, your doctor may be more influenced by personal benefit than your health in determining which drug to prescribe for you.
Does that give you a warm and fuzzy feeling about your next appointment with your physician? It certainly should not.
Even with FDA approved drugs that are thoroughly evaluated we have bad side effects. If you question that statement flip on your television to virtually any station for a couple of hours and count the number of ads from trial lawyers who will be happy to represent you if you or a loved one suffered as a result of taking drugs which the FDA had approved.
If those drugs which have been “thoroughly tested” have adverse effects, consider the possibility of taking drugs which are untested to treat a particular condition. (Just as a point of reference, during the time I have been writing this post, two such ads appeared on my television – and I type very quickly).
With healthcare representing an ever larger proportion of our GDP this is hardly a moot point. The amount of waste and fraud in the system is mind-boggling – and even the Federal Government recognizes this problem. The settlement with GSK is a small first step at correcting the situation – but far more needs to be done.
What more could be done? A $3 Billion dollar fine sounds like a lot – but for GSK and many of its competitors this is truly a drop in the bucket. What should have been done is that the company’s CEO, Sir Andrew Witty should have been forced to resign as part of the settlement with the UK drug giant.
Is this too harsh? Well, let’s look at something else that happened today. There is a growing scandal once again emerging from the financial industry. Although it will be months before we learn the complete story, that is if we ever do, apparently the UK’s third largest bank, Barclays was involved in massaging interest rates to make its bottom line look better during the height of the 2008 worldwide financial crisis.
Even before we know what really happened, Barclay’s CEO, Bob Diamond resigned today. Perhaps he was guilty of overseeing this strategy and perhaps not.
What is clear is that GSK knew that it was acting in both an illegal and unethical manner – which is why they are pleading guilty to the charges levied against them. Until those who run corporations pay a personal price for their company’s malfeasance they will continue to implement policies designed to pad their bottom line.
I suspect that in the nine years during which the GSK investigation has been ongoing the company made many times the fine to which they agreed for the specific drugs in question. And Sir Andrew continues in his position having suffered a little embarrassment and no other personal consequence.
When someone in the financial services industry acts inappropriately it has trickle down consequences for all of us. They threaten the stability of our financial system and that affects each one of us.
When someone in the pharmaceutical industry acts inappropriately it also has consequences for us in terms of the cost we are all asked to pay for our healthcare system. And for people who suffered adverse reactions to their products or death the consequences are far more personal and severe.
Trying to put my usual optimistic spin on this, I do see at least one beneficiary from the law of large numbers. It’s the funeral industry. Rest in peace.