No recovery in sight...ethical recovery, that is.

Yesterday's big news was the report that "the pharmaceutical giant Pfizer agreed to pay $2.3 billion to settle civil and criminal allegations that it had illegally marketed its painkiller Bextra, which has been withdrawn. It was the largest health care fraud settlement and the largest criminal fine of any kind ever...The government charged that executives and sales representatives throughout Pfizer’s ranks planned and executed schemes to illegally market not only Bextra but also Geodon, an antipsychotic; Zyvox, an antibiotic; and Lyrica, which treats nerve pain. While the government said the fine was a record sum, the $2.3 billion fine amounts to less than three weeks of Pfizer’s sales. Much of the activities cited Wednesday occurred while Pfizer was in the midst of resolving allegations that it illegally marketed Neurontin, anepilepsy drug for which the company in 2004 paid a $430 million fine and signed a corporate integrity agreement — a companywide promise to behave...Almost every major drug maker has been accused in recent years of giving kickbacks to doctors or shortchanging federal programs. Prosecutors said that they had become so alarmed by the growing criminality in the industry that they had begun increasing fines into the billions of dollars and would more vigorously prosecute doctors as well...Mr. Loucks, the prosecutor, accused Pfizer of aggressive marketing tactics.“Among other things, Pfizer did the following: Pfizer invited doctors to consultant meetings, many in resort locations. Attendees expenses were paid; they received a fee just for being there,” he said. Such weekend getaways for doctors are still common throughout the drug and medical device industries..."

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The article does not even come close to the essential point that is missing in the story. The financial penalty is just taking some cash out of the earnings of the company- a little nick for shareholders who can use a Pfizer band-aid to forget. The managers who committed these crimes have not paid any penalty, and can continue working at Pfizer and commit similar acts again. This is the fundamental issue with Corporate America- no accountability for managers, especially at the top.

'Patent'ly corrupt!

Pfizer, the world's biggest drug company by sales, has been facing patent expirations on a number of its drugs. Ranbaxy, the Indian drug firm that makes generic drugs, had been challenging Pfizer's patents for Lipitor. There was a good possibility that Ranbaxy would have succeeded, in which case generic Lipitor would have been available in the first half of 2010. Lipitor currently generates nearly $13 billion a year for Pfizer.

In order to extend the patent-protected Branded Rx life of Lipitor, Pfizer has entered into an agreement with Ranbaxy. The latter will delay the introduction of generic Lipitor until November 30, 2011, giving an additional year and a half of patent life for Lipitor. In return, Pfizer is also allowing Ranbaxy to sell generic version of another drug, Caduet, in the United States on the same date.

Ian Read, president of Worldwide Pharmaceutical Operations for Pfizer, had the audacity to say that “This agreement is a win-win-win because it is pro-patient, pro-competition and pro-intellectual property.”

This is a rather simple case of 'quid pro quo.' It is depressing that corporations can get away with such blatant corruption- this is a hard 'pill' to swallow....especially if it's Zoloft, Pfizer's anti-depression drug. After Zoloft went off-patent in June 2006, its sales declined by nearly 84%, from $3.3 Billion in 2005 to $531 million in 2007.