May 11th, 2011
FDA holds corporate execs responsible for pharma abuses
Forty-year-old rats are rampaging through the pharmaceutical industry. Frustrated by its lack of success at reining in drug-company abuses, FDA is bringing back a legal doctrine spawned by long-dead rodents to bring criminal charges against pharmaceutical executives, including executives who had no personal knowledge of company misdeeds.
“It is clear that fines are not working here,” said Eric Blumberg, FDA deputy chief counsel for litigation, last November. “We need to put something else on the scale to make people think twice, three times.” Blumberg was talking about illegal drug marketing. In 2009 Eli Lilly paid $1.4 billion for crossing the line in marketing Zyprexa (olanzapine) and Pfizer paid $2.3 billion for illegal marketing of Bextra (valdecoxib).
Dusting off Park
The something else on the scale is the Park Doctrine, based on a 1975 case against Acme Markets President John R. Park. FDA charged Park personally after issuing numerous warning notices about rats fouling Acme food-storage facilities. The U.S. Supreme Court agreed that Park, as company president, was ultimately responsible for ensuring compliance regardless of whether he personally knew about the vermin infestation.
FDA is counting on personal liability to “change the corporate culture” at firms that have shrugged off billion dollar penalties.