Are the big pharmaceuticals too big to fail? Is that a necessary characteristic for successful, expensive drug development?
Usually so opinionated I’ve got mixed feelings on big pharma. Consider those feelings doubly mixed after reading this CNN special investigation concerning the COX-2 inhibitor Bextra which Pfizer (or at least, controversially, it’s subsidiaries) was accussed of marketing illegally.
By April 2005, when Bextra was taken off the market, more than half of its $1.7 billion in profits had come from prescriptions written for uses the FDA had rejected.
But when it came to prosecuting Pfizer for its fraudulent marketing, the pharmaceutical giant had a trump card: Just as the giant banks on Wall Street were deemed too big to fail, Pfizer was considered too big to nail.
Why? Because any company convicted of a major health care fraud is automatically excluded from Medicare and Medicaid. Convicting Pfizer on Bextra would prevent the company from billing federal health programs for any of its products. It would be a corporate death sentence.
Prosecutors said that excluding Pfizer would most likely lead to Pfizer’s collapse, with collateral consequences: disrupting the flow of Pfizer products to Medicare and Medicaid recipients, causing the loss of jobs including those of Pfizer employees who were not involved in the fraud, and causing significant losses for Pfizer shareholders.
So Pfizer and the feds cut a deal. Instead of charging Pfizer with a crime, prosecutors would charge a Pfizer subsidiary, Pharmacia & Upjohn Co. Inc.
The CNN Special Investigation found that the subsidiary is nothing more than a shell company whose only function is to plead guilty.
I suppose I can’t support the break up of big pharma for both practical and philosophical reasons. But this kind’ve three card monty prosecution game seems beyond the verge.