Spotlight on harmful pharmaceutical industry practices: Educating the public to build a foundation for reform

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In the last year, policy makers, the media and the public have focused new attention on the harmful practices of the pharmaceutical industry. This scrutiny provides an opportunity for health faculty, journalists and advocates to educate their students, readers and members about the near daily revelations around these practices and their policy solutions. Dividing these practices into specific categories, we have highlighted some of the industry’s egregious practices that have surfaced under society’s microscope.  By engaging their constituencies in learning about harmful pharma industry practices and considering options for reducing such risks, health professionals and activists can lay the foundation for meaningful reform.   By having our students read and critically analyze these sources, we prepare them to contribute to solutions.


Drug pricing has been a hot topic this year for both consumers and legislators. With as many as one in four of constituents reporting difficulty in paying for prescription medications, this issue has been brought to the forefront of American politics. For example, this past April, legislators in Maryland passed an Anti-Price-Gouging Law to protect its citizens and taxpayers from price increases within “…noncompetitive off-patent drug markets.” While this is a great first step for Maryland, there is still more to be done. This law does not affect specialty drug innovators or generic drug manufacturers. So specialty drugs like medications to treat cancer can still be priced exorbitantly high, much higher in fact than patients in the UK pay for the same medications.

If you are looking for more information on America’s fight against Big Pharma, consider watching Drug Short, a documentary in the Netflix Dirty Money video series that shows the rise and fall of Valeant Pharmaceuticals, led by a CEO who declared that his goal wasn’t to make new drugs but simply to “create stockholder value.”

 Distribution of opioids

Another big ticket item taking the stage in American politics this year was the country’s current opioid epidemic and the role that pharmaceutical companies have played in the issue. A recent article from Reuters reported on a suit filed by Kentucky’s attorney general against drug distributor McKesson Corp. The suit claims that the distributor failed to flag large opioid orders being delivered different pharmacies in the state, fueling the current epidemic. While our country has seen a decrease in opioid prescriptions, according to a report from the CDC, the amount of currently prescribed opioids remains roughly three times the amount as was prescribed in 1999. What started off as a family business for the Sacklers, owners of Purdue Pharma and manufacturers of OxyContin, has generated billions of dollars for the family and company—and millions of addicts, as described in a recent New Yorker article.

 Intellectual prosperity protections

Doctors Without Borders, Oxfam, the AFL-CIO and about 100 other groups focused on health standards and workers’ rights are urging NAFTA negotiators not to use the intellectual property chapter of the trade agreement to protect pharmaceutical companies and jeopardize affordable access to medicine. “It is vital that the NAFTA party governments reject any provisions that would expand or strengthen pharmaceutical monopolies and enforcement at the expense of access to affordable medicines,” the groups wrote in a letter to the top health and trade ministers of the U.S., Canada and Mexico.

In recent years, we have seen more examples of pharmaceutical monopolies and the powers that they hold come to light. Drug manufacturers like Celgene Corp., the makers of the cancer drug Revlimid have been able to extend their patent exclusivity for decades. This is especially problematic for consumers as generic medications are not developed and price gouging occurs.

 Safety & Regulations

 American consumers and patients rely on the FDA to approve and monitor safe prescription medications and medical devices. It’s common to see drug warning labels updated with newer side-effect information or even a black box warning if potentially adverse side-effects are known. These black box warnings often warn consumers of serious side-effects, as in the case of the blood thinner Xarelto which lacks an approved antidote causing serious bleeding incidents which have led patients to file thousands of lawsuits. Sometimes, however, this warning can hurt the drug manufacturer more than it benefits the consumers as shown in the case of varenicline, a prescription medication used to treat nicotine addiction.

For a more in-depth look into the medical device industry, consider the new book, The Danger Within Us: America’s Untested, Unregulated Medical Device Industry and One Man’s Battle to Survive It, an investigation of the products, practices and regulation of the medical device industry in the United States.

Tax Avoidance and Tax Evasion

A report from Americans for Tax Fairness examines the profits, taxes, and drug prices of the 10 biggest U.S. pharmaceutical companies: Johnson & Johnson, Pfizer, Merck & Co., Gilead Sciences, AbbVie, Amgen, Eli Lilly & Co., Bristol-Myers Squibb, Biogen and Celgene. The Pharma Big 10 had $506 billion in untaxed profits stashed offshore in 2016. These profits increased by 65% from 2011, as drug prices soared. U.S. tax law allows companies to indefinitely delay paying federal taxes on profits booked and kept offshore. The new US tax law could offer these companies a tax cut of up to $80 billion.

The late January US budget deal that reopened the federal government included a two-year delay of a proposed 2.3 percent tax on medical devices, originally included in the Affordable Care Act to help pay for the law’s health insurance subsidies. Industry had been demanding relief from the tax for months. The two-year suspension will cost the federal government about $3.7 billion. Medical device companies cheered the legislation.

Caitlin Hoff is a Health and Safety Investigator, aiming to educate people about consumer rights, and industries that seek to diminish them. Nicholas Freudenberg is founder and director of Corporations and Health Watch.

The New Corporate Social Responsibility: Accountability or Public Relations?

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Last month, Larry Fink, the CEO of BlackRock, the nation’s largest asset manager, wrote in his annual letter to CEOs:

To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate. Without a sense of purpose, no company, either public or private, can achieve its full potential. It will ultimately lose the license to operate from key stakeholders. It will succumb to short-term pressures to distribute earnings, and, in the process, sacrifice investments in employee development, innovation, and capital expenditures that are necessary for long-term growth. It will remain exposed to activist campaigns that articulate a clearer goal, even if that goal serves only the shortest and narrowest of objectives. And ultimately, that company will provide subpar returns to the investors who depend on it to finance their retirement, home purchases, or higher education.

Fink’s argument that a social purpose was good for the corporate bottom line has attracted scrutiny from researchers as well as the media.  A few recent studies illustrate the scope of this debate:

Researchers at the University of California San Francisco studied African media coverage of tobacco companies’ corporate social responsibility initiatives.  Of the 288 news items they found, the majority relied solely on tobacco industry representatives as news sources, and portrayed tobacco industry CSR positively. When public health voices and tobacco control themes were included, news items were less likely to have a positive slant. They concluded that their finding suggests a foundation on which to build media advocacy efforts. Drawing links between implementing the Framework Convention on Tobacco Control and prohibiting or curtailing tobacco industry CSR programs may result in more public dialogue in the media about the negative impacts of tobacco company CSR initiatives.

In Science, a research team based at City University of New York describes a study that an asset owner, an asset manager, and two research universities are designing. They are developing a next generation of traceable indicators to quantify external context and impact of investments on the environment and health and place these into a decision-making framework useful to investors. Tests of these science-based sustainability metrics are under way on a $2.1 billion portfolio of public equities invested on behalf of a large European pension fund.

Another study compared the appeal of a fast food company’s public health related corporate social responsibility message with a more generic social issue-related message. The generic message elicited significantly more positive perceptions of CSR motives, supportive communication intent and investment intent than public-health related CSR.  However, when a company has a healthier image, stakeholders do not distinguish between health-related and other types of CSR messages. Researchers also found that positively perceived CSR motive plays a determinant role in anticipating communication, investment, and purchase- intents, reinforcing Fink’s message that at least perceived CSR can contribute to the bottom line.

VW Poisons People, Monkeys and the Air We Breathe

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Once again, new revelations about the illegal and deceptive practices of German car makers Volkswagen, Daimler and BMW attract media and public scrutiny. A few recent highlights:

Fortune reported that “Volkswagen’s CEO said he was ‘stunned’ by reports the carmaker had sponsored tests that exposed monkeys and humans to toxic diesel fumes and two years after an emissions cheating scandal, pledged once again to get to the bottom of the wrongdoing.  Europe’s largest automaker has come under fresh scrutiny after the New York Times said last week that Volkswagen and German peers BMW and Daimler funded an organization called European Research Group on Environment and Health in the Transport Sector (EUGT) to commission the tests. The report came more than two years after VW admitted to cheating U.S. diesel emissions tests, sparking the biggest business crisis in its history, and pledged sweeping changes to ensure such misconduct never happened again.

The New York Times reported that in 2014 scientists in an Albuquerque laboratory conducted an unusual experiment: Ten monkeys squatted in airtight chambers, watching cartoons for entertainment as they inhaled fumes from a diesel Volkswagen Beetle. The details of the Albuquerque experiment have been disclosed in a lawsuit brought against Volkswagen in the United States, offering a rare window into the world of industry-backed academic research. The organization that commissioned the study, the European Research Group on Environment and Health in the Transport Sector, received all of its funding from Volkswagen, Daimler and BMW. It shut down last year amid controversy over its work. It also produced a skeptical assessment of data showing that diesel pollution far exceeded permitted levels in cities like Barcelona, Spain.

According to The Washington Post, the study by the European Research Group on Environment and Health in the Transport Sector (EUGT) was never published, and the research institute overseeing it has since been dissolved. All three carmakers involved in the study — Daimler, BMW and Volkswagen — distanced themselves from the research after the studies were disclosed. But the research institute behind the controversial tests on monkeys was founded by Daimler, BMW, Volkswagen and automotive components supplier Bosch, which has raised questions over the extent to which experiments with humans was backed by the three major carmakers, too.

Another account of the VW diesel emissions is featured on a new Netflix series “Dirty Money” an investigative series that exposes “brazen acts of corporate corruption and greed.”  The first episode, Hard NOx,  examines  the VW deception on emissions.

Corporations and Health News from the World Economic Forum at Davos

 82% of new wealth last year went to the richest 1%- while the  poorest half got nothing, says Oxfam

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Eighty two percent of the wealth generated last year went to the richest 1% of the global population, while the 3.7 billion people who make up the poorest half of the world saw no increase in their wealth, according to a new Oxfam report released at the World Economic Forum.  Billionaire wealth has risen by an annual average of 13% since 2010 – six times faster than the wages of ordinary workers, which have risen by a yearly average of just 2%. The number of billionaires rose at a rate of one every two days between March 2016 and March 2017. This huge increase could have ended global extreme poverty seven times over.

Shaping the Future of Retail for Consumer Industries

A new report prepared by Accenture, the global professional services company was released at the World Economic Forum in Davos. The report highlights the game-changing technologies which will fundamentally change how retail and consumer brands do business over the next decade and shape new frontiers for physical stores, breakthrough approaches to e-commerce, new capabilities, and implications on society. Accenture paints a rosy picture of the future of retail consumption:

The next decade is expected to be the golden age of the consumer, with shoppers having more choices and control than ever before. They will be presented with a growing array of products and services, often personalized to their specific needs and wants. Consumers will continue to demand price and quality transparency along with a wide range of convenient fulfilment options. Overall, the retail experience is poised to become more inspirational, exciting, simple and convenient, depending on the consumer’s ever-changing needs.

Is Greed Good? Towards Better Capitalism

At a panel at the World Economic Forum, business and other leaders explored whether rising concerns over ownership structures and market forces are causing short-term priorities to gain the upper hand.  They asked how corporate management, boards and investors can align to support long-term value creation.  Panelists included Theresa Whitmarsh, Executive Director, Washington State Investment Board; Indra Nooyi, Chairman and Chief Executive Officer, PepsiCo Inc.;Mark Weinberger, Global Chairman and Chief Executive Officer, EY; Joseph E. Stiglitz, Professor, School of International and Public Affairs; and  Carlos Ghosn, Chairman and Chief Executive Officer, Renault-Nissan-Mitsubishi. Henry Blodget, Chief Executive Officer and Editor-in-Chief, Business Insider Inc., served a moderator. Watch the discussion.

ToxicDocs: secret documents on chemical toxicity available for public health research

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ToxicDocs is a new resource for journalists, researchers, community groups, unions, and others who investigate the harmful consequences of industries that use toxic substances. The free and open-to-the public site is a searchable repository of twenty million pages of documents, with more to be posted in the future.  The documents have been retrieved from public archives and private communications that have become open to the public in lawsuit “discovery”. Created by two public health historians, Gerald Markowitz of City University of New York and David Rosner of Columbia University and their colleague Merlin Chowkwanyun, the site promises “blazingly fast searches of once-secret industry documents.”

Now in a special issue, the Journal of Public Health Policy, available free and online, presents several commentaries , including one by the site’s founders Rosner, Markowitz and Chowkwanyun , on the history and use of ToxicDocs.  In addition:

Stéphane Horel of LeMonde, who has already used many documents that will be in describes the difference such data make for investigative journalists.

Christer Hogstedt (from Sweden) and David Wegman (US) explore the role that ToxicDocs may play in environmental protection.

Jock McCullogh from South Africa explains the role that previously secret documents can play in protecting gold and asbestos miners.

US Senator Sheldon Whitehouse, who used these documents when he was Attorney General for Rhode Island writes about ToxicDocs in the public sphere.

Robert Proctor tells the early history, starting with tobacco litigation, and how it has changed our ideas of progress in public health.

Elena Naumova suggests the immense power of large data sets (Big Data), particularly when they are searchable.

and Corporation and Health Watch’s Nicholas Freudenberg argues that ToxicDocs provides a new tool for researchers and advocates, a new approach to teaching public health, and adds to the growing number of resources available to investigate the role of corporations in shaping patterns of health and disease and public health policy.

Tracking the Effects of Corporate Practices on Health