An insightful and scathing critical analysis of FDA’s new rule–and what it seeks to accomplish–by Stephen Pizzo, author and veteran investigative reporter, begins by invoking the image that haunts pharmaceutical CEOs:
"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."
See that image and hear each CEO falsely swear before Congress in a film clip: http://www.ucsf.edu/senate/tobacco/executives1994congress.html
Pizzo points out the similarities between the tobacco and pharmaceutical industry:
• Both Big Tobacco and Big Pharma produce and sell products that often cause injury or death when used as directed.
• 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.
• 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.
• Both industries attacked, slandered and punished those within or associated with their industries who broke the company stonewall by trying to sound a warning .
• 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.)
"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."
Contact: Vera Hassner Sharav
Shielding Big Pharma
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-authored The New York Times best-seller, Inside Job: The Looting of
America’s Savings and Loans, which was nominated for a Pulitzer.
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
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
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
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
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:
• Both Big Tobacco and Big Pharma produce and sell products that
often cause injury or death when used as directed.
• 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.
• 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.
• Both industries attacked, slandered and punished those within or
associated with their industries who broke the company stonewall
by trying to sound a warning .
• 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. 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
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
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
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
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
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.
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