How GlaxoSmithKline Helped the Big Government Supporters Today

In a report from USA Today on July 2, 2012, we learned that prescription drug giant GlaxoSmithKline pled guilty and will pay $3 billion to resolve federal criminal and civil inquiries arising from the company's illegal promotion of some of the drugs it produces. About $1 billion will go towards the federal fine, the remaining $2 billion to resolve civil claims that were made under the US federal government's "Falls Claims Act".

Image courtesy of Wikipedia

This is a staggering announcement, not to mention one of the largest if not the largest penalty ever levied against a drug company by the US federal government. The article quoted the federal government as saying “GSK's salesforce bribed physicians to prescribe GSK products using every imaginable form of high-priced entertainment, from Hawaiian vacations to pay doctors millions of dollars to go on speaking tours to a European pheasant hunt to tickets to Madonna concerts, and this is just to name a few”, which was a statement reportedly made by Carmin M. Ortiz, a US attorney in Massachusetts.

The civil claims also presented evidence that GSK was inappropriately and illegally engaging in "off-label marketing” in which a drug that has been approved to treat one kind of illness might also have other beneficial uses. However, the US FDA still requires that those alternative uses be documented and proved prior to marketing. Two examples cited were: The promotion of the drug Paxil for treating children suffering from depression from April of 1998 to August 2, 2003; and the promotion of the use of Wellbutrin for weight loss, sexual dysfunction, substance addiction and ADHD from January of 1999 to December of 2003 even though it was only approved by the FDA for major depressive disorders.

Such a large penalty cannot have been an easy thing for GSK's executive management to swallow. I can imagine what the stockholders will say at the next annual meeting. But the only reason I can think of that would prompt GSK's senior management to accept such a staggering penalty is that the government had them dead to rights. And this is the issue that bothers me the most. I usually argue that most companies will do the right thing for their customers because loyal customers result in repeat business and repeat business results in long-term business growth and stability. Something is very wrong when the leadership of a company in the business of providing medicines would consider, much less execute any strategy that intentionally results in a doctor prescribing, or a patient taking a medication that has no proven benefit to fight their illness. Shame on GSK's sales force and incidentally, shame on any doctor that in so doing has contradicted the oath of "Do no harm." How can I, as a strong fiscal conservative who constantly argues for smaller government, in part by reducing the hundreds of thousands of pages of regulations and thereby reduce the size of the federal bureaucracy, when companies like GSK clearly show quality of products and services to their customers takes a back seat to profit? Where's the morality?

GlaxoSmithKline has created many products which have been of enormous benefit to our society. For that I applaud them. But when it is proven that they show no hesitation to incorrectly market their products in pursuit of greater and greater profits, then they have lost my trust and I would like to think that they have lost the trust of the general buying public. I would also like to think that what I was taught about basic economics is true, which is that the free market will reward companies that provide a good service or product and will force companies that provide inferior products and services or which have questionable business practices to fail. But with GSK being so big and being serviced by exceptionally bright and skillful lawyers, I am being forced to reevaluate my position.

Any person that calls themselves a true conservative should not be doing business with a company that knowingly puts you in jeopardy by misleading you to think that the medicine that you are taking, sometimes at great expense to either yourself or your insurance company, is effectively treating your illness when in fact it may be doing nothing or worse.

"I Like to Fire People" -- A non-controversy by the MSM

As is usually the case, if the media can take a comment, cut it out of it's context and then regurgitate it as pablum to the masses who lean the same direction as the media outlet, they can definitely make it run.

The BostonHerald.com today reported the following. I will provide the text verbatim so that you can see what they claim the former Masschussetts governer said at a Nashua, Hew Hampshire meet and greet.

“GOP frontrunner Mitt Romney – who has based his campaign on his sometimes controversial record as a corporate czar – sparked a furor today with the remark that he likes 'being able to fire people.'

The former Bay State governor was discussing health insurance when he said that insurers give fairer prices if they know they will be held accountable.

'It also means that if you don't like what they do, you can fire them. I like being able to fire people who provide services to me, ' Romney said.”

There was more in that article, about 600 words more... but nothing else from Mitt Romney's actual statement. With only that chunk of the statement, it would be pretty easy and quite reasonable to think that Mitt Romney is a ruthless man who enjoys firing people for no real reason other than he can.

Fortunately, we have YouTube.com and you can find the entire clip of what he actually said.

“It also means that if you don't like what they do you can fire them. I like being able to fire people who provide services to me. If, if, you know, if someone doesn't give me the good service I need, I want to say 'you know, that if... I'm gonna go get somebody else to provide that service to me.' And so that's one thing I'd change.”

See the difference? In the entire context, what Mitt Romney said is; if you can find somebody that provides a service and does a better job at it than your current provider, you should have the right to terminate the relationship with your current provider. Further, he says that you should be unapologetic about it.

In my opinion this is a contrived controversy. There is nothing radical or controversial about a successful businessman stating that in the course of his business dealings he would have no hesitation to fire a service provider if he can find somebody else to provide the same service for less cost, more service for the same cost, or more service for less cost.

What we really should be looking at in a free-market economy is at what point do we as consumers insist that providers continue to cut costs to the point that the labor to provide the service or good cannot live on the wages. But this isn't Mitt's problem, this is America's problem.