Heavily Overpricing Pharmaceuticals
Price fixing (Pfizer labeled as Top Corporate Criminal)
Pfizer cares for your health, as long as the company sees profit
Pfizer & Aids
Lawsuit South Africa
Drugs = Soft Drinks
Pfizer steals indigenous knowledge
Pfizer ‘illegally tested drugs on children’
Pfizer sells dysfunctional heart valves
Heart attack link to arthritis drugs
Pfizer’s theory of philanthropy
Twelve billion dollar Business park –PfizerWorld
What Pfizer doesn’t tell you
Pfizer helps out the tobacco industry
Heavily Overpricing Pharmaceuticals
Most Profitable Industry
According to the Financial Times, five of the top ten companies with the most profitable foreign operations were pharmaceutical companies (27/4/2000). According to industry apologists, the profits are justified due to the unusual nature of the business: research and development costs for new drugs require huge investments (sometimes upwards of $300 million (£204,6 million) with equally large amounts of risk that the investment will pay off. Critics however, claim that prices are kept artificially high even when the initial investment is recovered.
Huge Marketing Expenditures
A new report (released on 10 July 2001) by the consumer health organization Families USA  refutes the pharmaceutical industry’s claim that high drug prices are needed to sustain research and development. The report documents that drug companies are spending more than twice as much on marketing, advertising, and administration than they do on research and development; that drug company profits, which are higher than all other industries, exceed research and development expenditures; and that drug companies provide lavish compensation packages for their top executives .
Among the nine pharmaceutical companies examined in the report (Merck, Pfizer, Bristol-Myers Squibb, Pharmacia, Abbott Laboratories, American Home Products, Eli Lilly, Schering-Plough, and Allergan) all but one (Eli Lilly) spent more than twice as much on marketing, advertising and administration than they did on research and development. Eli Lilly spent more than one and one-half times as much. Six out of the nine companies made more money in net profits than they spent on research and development last year. [See chart 1]
(According to its 1999 annual report, Pfizer spent 39,2% of its revenues on marketing and administration. The company legitimises these huge expenditures by claiming they serve an educational function: doctors and the public learn about new and useful drugs. See also the Pfizer publication ‘Economic Realities in Health Care Policies’, volume 2, issue 1, ‘Prescription Drug Advertising: Empowering Consumers Through Information’, at: http://www.pfizer.com/pfizerinc/policy/ERhealthcare.pdf)
Exorbitant pay for executives
The report also documents profligate spending on compensation packages for top pharmaceutical executives. The executive with the highest compensation package in the year 2000, exclusive of unexercised stock options, was William C. Steere, Jr., Pfizer’s Chairman, who made $40.2 million (£27,4 million). The executive with the highest amount of unexercised stock options was C.A. Heimbold, Jr., Bristol-Myers Squibb’s Chairman and CEO, who held $227.9 million (£155,4 million) in unexercised stock options. [See charts 2 and 3]
Publicly funded research
Another reason why the relationship between profits and innovation (R&D) isn’t as straightforward as the industry claims is that a large part of research is publicly funded. It is a general practice that research (in any given field) starts in the public sector. Only when corporations feel that research (results) will potentially create huge profits they become interested and involved.
The top ten drug companies in the US are reported to spend on average 20% of their revenues on R&D, of which 40% is paid by the (public) National Institute of Health (NIH) . A study by the Boston Globe newspaper in 1998 found the National Institutes of Health (NIH) laboratories spent $1 billion on drug and vaccine development in the 1996 tax year, but only took $27m in royalties.
In September 1999, it was pointed out to the director of the NIH, Harold Varmus, that six HIV/Aids drugs, as well as anti-malarial treatments and other medicines of vital interest to developing countries, had been invented with public funds. The government therefore had the right under US law to use the drugs in public health initiatives.
Dr Varmus dismissed the suggestion, echoing the industry line that: “Undermining licensed intellectual property rights would, I believe, unnecessarily jeopardise the development of important therapeutic drugs.” James Love, who runs a Washington-based group called the Consumer Project on Technology, sees the response as nonsensical because it was the NIH which did the hard work of discovering and synthesising the drugs in question.’
(James Loves blames both the US government and the US public. He elaborates on the absurd situation by saying: ‘The rest of the world will have to go however many years more of paying an astronomical sum for something invented by the United States government. How can we expect Glaxo SmithKline to share its intellectual property if the United States government won’t share its intellectual property to save millions of people? What does that say about the moral character of the American public? We are responsible.’)
The Guardian reports that drug companies try to make their R&D budgets look bigger by means of creative accounting. ‘With a little creative accounting, all manners of expenditures have been logged under the R&D title, partly in the pursuit of tax rebates.’
Protecting Profits through Patents
The US government tries to enforce strict patent laws all over the world. These Intellectual Property Rights (IPRs) that protect newly invented drugs (up to 20 years), enforced by the World Trade Organisation, are preventing access to essential medicines by the developing world. And patent protection of drugs can prevent poor countries from producing cheaper local versions. In Thailand, for example, Pfizer used to be the sole supplier of fluconazole, used in treating cryptococcal meningitis, an opportunistic infection affecting 1 in 5 of the country’s AIDS patients. The company charged a daily price of £8.75 ($14), making the drug largely unaffordable. The market exclusivity on the drug expired in 1998, leading to its local production at 5% of the 1998 price .
Oxfam has recently accused Pfizer of moral bankruptcy by pricing life-saving drugs beyond the reach of millions of poor people. Oxfam particularly criticizes Pfizer’s aggressive enforcement of patents in poor countries, forcing prices up. ‘The company’s bottom line seems to matter more than the lives of the world’s poorest people’, said Oxfam Policy Director Justin Forsyth. ‘Pfizer’s market value exceeds the combined national incomes of the 18 biggest countries in sub-Saharan Africa, but it heartlessly continues to lead the industry’s campaign for global monopolies on life-saving drugs while people die from treatable diseases.’ 
2000 Financials for U.S. Corporations Marketing Top 50 Drugs for Seniors
Chart 1 Percent of Revenue Allocated to:
Private Company Revenue
in $ millions: Profit:
(Net Income) Marketing/
Administration Research and
Merck and Co. Inc 40,363 17% 15% 6%
Pfizer Inc 29,574 13% 39% 15%
Squibb Company 18,216 26% 30% 11%
Pharmacia Corporation 18,144 4% 37% 15%
Abbott Laboratories 13,746 20% 21% 10%
Products Corporation 13,263 -18% 38% 13%
Eli Lilly and Co. 10,862 28% 30% 19%
Corporation 9,815 25% 36% 14%
Allergan, Inc 1,563 14% 42% 13%
Five Highest Paid Drug Company Executives Salaries
2000 Annual Compensation Exclusive of Unexercised Stock Options
Private Executive Company Compensation
Executive William C. Steere, Jr., Chairman Pfizer Inc $40,191,845
William C. Steere, Jr., Chairman; John R. Stafford, Chairman and CEO American Home Products Corporation $27,008,927
Edward M. Scolnick, Executive VP Merck and Co., Inc. $26,454,600
Richard Jay Kogan, Chairman and CEO Schering-Plough Corporation $21,444,020
David W. Anstice, President, the Americas Merck and Co., Inc. $19,600,975
The Five Drug Company Executives Salaries
with the Largest Unexercised Stock Options in 2000
Private Executive Company Compensation
C.A. Heimbold, Jr., Chairman and CEO Bristol-Myers Squibb Company $227,869,513
Raymond V. Gilmartin Chairman, Pres., and CEO Merck and Co., Inc. $181,252,976
William C. Steere, Jr., Chairman Pfizer Inc. $130,944,439
K.E. Weg, Vice Chairman Bristol-Myers Squibb Company $84,282,547
John R. Stafford, Chairman and CEO American Home Products Corporation $81,847,569
In sum, the pharmaceuticals industry’s claim that high profits (and strict patent laws, and high drug prices) are needed to secure the high costs of R&D (and ‘safeguard the development of new, life-saving drugs to fight diseases like cancer and Aids’) does not hold ground!
First, drug giants like Pfizer spent much more money on marketing and advertising than on R&D. Second, much money is being channeled to the Executive’s bank account. Third, large part of research is publicly funded. Fourth, by way of creative accounting corporations make their R&D look bigger. Fifth, it’s not true that the enormous corporate profits come from innovations (as is being claimed), it is the artificially high drug prices and strict patent laws (out-pricing drugs for poor people) that are securing the industry’s profits. Finally, one should not forget about the industry’s extensive influence on policymaking processes. The industry’s ability to push for regulations and laws that suit their own interests is obviously highly to the industry, and yet another critical way to secure its high profits.
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2. Price fixing (Pfizer labeled as Top Corporate Criminal)
Pfizer was listed as number 17 on the list of the ‘Top 100 Corporate Criminals of the 1990’s’. The company had been accused of participation in two international price fixing conspiracies in the food additives industry .
3. Pfizer cares for your health, as long as the company sees profit
‘The UK National Health Service (NHS) is suffering from increasing shortages of older but crucial medicines leaving patients at risk of being deprived of the most effective treatments. The medicines involved are most often those used in hospitals. Generally they no longer make much money for the makers, and in some cases, the drug firms may be struggling to make any profit on them.’
4. Pfizer & Aids
Pfizer is proud to state the company has made huge donations to the National AIDS Fund since 1989 . After all –in the words of CEO McKinnell– the HIV/Aids crisis is ‘a crisis of heartbreaking proportions, especially for those of us committed to serving patients’ (obviously referring to himself and the Pfizer company, but what about the HIV/Aids patients themselves? Shouldn’t they be mentioned first?). McKinnell continues: ‘We at Pfizer believe that the only realistic approach to solving this crisis is through partnerships. The pharmaceutical industry cannot do it alone…and the crisis can not be wished away. What we can do is build partnerships for a healthier world.’
Pfizer’s latest contribution to the fight against Aids involves the free distribution of Diflucan (Diflucan is not a treatment for Aids, but it is highly effective in treating 2 opportunistic infections that afflict large numbers of people with Aids) in 50 poor, HIV/Aids-affected countries. Pfizer developed this program in cooperation with the United Nations and the World Health Organization. Additionally, Pfizer and the Pfizer Foundation are providing construction and seed funding for the first large-scale HIV/Aids medical training centre in Africa.
However, it’s rather grim (to put it subtly!) that at the same time, Pfizer’s unscrupulous practices (e.g. heavily overpricing medicines, enforcement of strict patent laws, focus on the development of drugs for the rich, western consumers (the bulk of research and investments is going to so-called ‘lifestyle’ drugs for wealthier consumers), ignoring poor people’s needs) take lives and cause misery on a large scale, especially in poor countries.
As mentioned above, Pfizer makes a AIDS drug called fluconazole (Diflucan). It treats a painful brain infection called Cryptococcal meningitis. Without treatment, the infection kills people with AIDS in two months. About 10% of the 34 million people with HIV worldwide will develop this brain infection. Pfizer’s fluconazole brings in more than one billion dollars in sales each year. Around the world poor people with AIDS suffer and die without this drug, because Pfizer’s price gouging keeps it out of reach of the countless people who need it.
In South Africa, where 4.5 million people have HIV, no one can afford Pfizer’s killer prices. AIDS activists in South Africa and the United States have been demanding that Pfizer drop the price or allow generic production of the drug. Instead, Pfizer opposes efforts by foreign companies to make and sell the same or similar medicines at considerably lower prices. In South Africa, Pfizer’s patent means that even the government must pay $4.15 (£2,83) per pill, while in Thailand, where Pfizer does not have a patent on fluconazole, the drug is only $0.29 (£0,19) per pill. In Kenya, where Pfizer also has exclusive rights, fluconazole costs $18.00 (£12,28) per pill — more expensive, even, than US prices.
While Pfizer blocks access to affordable, generic fluconazole, countless numbers of people with AIDS die preventable deaths. In an unprecedented resolution, the United Nations Subcommission for the Protection and Promotion of Human Rights recently found that the WTO’s rules on pharmaceutical patents are anathema to human rights, and will effectively cripple efforts by developing countries to deal with epidemics of disease. The resolution states that there are “apparent conflicts between the intellectual property rights regime embodied in the (WTO rules), on the one hand, and international human rights law, on the other.”
Pfizer keeps insisting that strict patent rules are needed to stimulate innovation. ‘Patent protection makes drug discovery possible and profitable. It is the incentive that justifies investing billions of dollars and decades of time to find new cures. Eliminate patent protection, and the incentive for original research is removed and every research-based pharmaceutical company becomes a generic drug manufacturer, and the discovery of new medicines slows to a trickle.’  As pointed out earlier, this reasoning is based on nothing but false grounds.
Every time high-level, international meetings on health or drug-related issues come up, NGOs, activists and other concerned people seek extra attention for the pharmaceutical industry’s irresponsible and unscrupulous attitude towards the Aids crisis. At the same time, drug companies –being in the spotlight- take advantage of the opportunity to work on their image. Just before the AIDS2000 conference in Durban, Pfizer announced the company would donate fluconazole (Diflucan) free of charge to people with HIV/Aids.
The Treatment Action Campaign (TAC) supported the donation. However, TAC was soon to find out that the Pfizer still considered profits more important than people’s lives. It seemed the donation was highly limited, and could not be considered something else than a fraud to protect the company’s profit. Pfizer insisted on limiting its donation to a period of two and a half years -the exact period when their fluconazole patent or exclusive licence to sell will expire. Second, Pfizer refused to extend the offer to treat thrush (see TAC leaflet). Third, Pfizer refused to include countries other than South Africa in the offer. And finally, Pfizer refused to reduce the price to lower than R4.00 per capsule for all other uses. On top of that, Pfizer’s unwillingness to negotiate is condemning countless people to suffering and possible death because they cannot afford the unreasonable price that the company is putting on the drug .
More recently, as mentioned earlier, Pfizer has announced that it will offer Diflucan at no charge to HIV/Aids patients in 50 poor countries where HIV/Aids is prevalent. No dollar or time limit this time. The Diflucan Partnership was developed in cooperation with the United Nations and the World Health Organization and expands on the aforementioned partnership with South Africa. The announcement came just weeks before the UN’s special session on HIV/Aids in June 2001. However, and this cannot be overstated, donations are meaningless as long as drug companies like Pfizer keep overpricing their drugs and enforcing strict patent laws.
Pfizer’s statement that the company supports donation programs ‘because medicines are unaffordable for many patients in the least developed countries’ is highly misleading. It is the practices of drug giants like Pfizer (see above) that cause this scandalous situation! The following paragraphs on the broadly publicised lawsuit (pharmaceutical industry vs. the South African government) clearly illustrate this.
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5. Lawsuit South Africa
For more than three years, the big pharmaceutical companies have been spit-shining their image as mankind’s saviors while simultaneously waging a legal battle to keep low-cost versions of lifesaving drugs from the millions of people dying of AIDS in Africa. On April 18, 2001, the 39 drug companies (including Bayer AG, Bristol-Myers Squibb, Eli Lilly Ltd, Glaxo Wellcome Ltd, Hoechst Ltd, Novartis Ltd, Novo Nordisk Ltd, Pharmacia & Upjohn Ltd, Rhone-Poulenc Ltd, Roche Ltd, Schering Ltd, Smithkline Beecham Ltd, Universal pharmaceutical, Zeneca Ltd, Merck & Co, Rhone-Poulenc Rorer SA, Warner-Lambert) suing the South African government dropped their lawsuit.
Typically, they’re spinning it as a humanitarian gesture, but it really is the only way to extricate themselves from the public relations nightmare their cold-blooded effort had become. From AIDS activists who started protesting two years ago to Nelson Mandela, who this week called the law suit a “gross error … that is completely wrong and must be condemned,” the public outcry had reached a crescendo the industry could no longer afford to ignore. This, after all, is the same industry that last year spent $1.7 billion (£1,159 billion) on TV ads promoting its products and painting itself as a paragon of virtue and compassion .
Arianna Huffington writes: Ironically, it was not long after I had seen for the umpteenth time Pfizer’s heartstring-tugging TV spot proclaiming “Life is our life’s work” that I heard the drug companies were waving the bloodstained white flag in Pretoria. That it took the world turning on them — and three long years of thousands of people dying — to get them to drop their suit proves that the industry’s collective slogan should be “Profit is our life’s work.”
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6. Drugs = Soft Drinks
As mentioned before, Pfizer can attribute its economic success largely to its ability to turn drugs into multi-billion dollar products. The company generally spends more money on marketing than on research and development. The importance of marketing (Pfizer set the example) has rippled through the industry. It is manifested in the ‘arms race’ of escalating numbers of sales representatives, particularly in the US; the huge pre-launch marketing budgets when companies try to make as big a splash as possible; and the aggressive TV advertising campaigns with which some drugs, such as Claritin and Viagra, have been turned into household names.
Global launches are becoming increasingly possible as regulation between the US, Europe and Japan gradually harmonises. Companies spend increasing amounts of time and money developing a global brand name and a consistent message that can be delivered (with minor tweaks) anywhere in the world. Medicines are beginning to resemble any other consumer products. Certainly there will always be differences. New, powerful drugs will continue to be screened by trained physicians. People will never purchase chemotherapy medicines on impulse at the supermarket checkout (at least, this is what we assume…). But these days, as never before, drugs are created, branded and promoted with the consumers (note: wealthy consumers) very much in mind.
Corporations point out that the Internet and direct-to-consumer (DTC) advertising is increasing the power of patients. ‘We are no longer in an age where an ill-informed patient goes to see a doctor for advice. More often than not the patient is already well informed before they go through the surgery door’, says David Baker, head of European life sciences at Computer Science’s Corporation, a consultancy. But an essential question is ‘by whom are patients informed?’ The answer is easy to find. The next important question should be ‘with what intentions do drug companies provide information?’ Are they genuinely concerned about people’s health, or do they consider profits more important?
David Baker –reflecting the industry’s vision- continues: ‘Time is money. If the patient wants a product and it’s indicated [licensed for that condition] and it’s a good product, then why should the doctor start a discussion.’ So the next step would be to leave the doctor out altogether. It seems that drug corporations like Pfizer want to remove as many links as possible between themselves and the consumer (by way of direct-to-consumer (DTC) advertising, and use of the internet) in order to enlarge opportunities to influence the consumer. It’s unlikely that consumers, being dependent on the information provided by corporations and being the target of comprehensive PR and marketing efforts will find themselves in a more favourable, empowered position as the pharmaceutical industry predicts/promises.
(Further up in this profile you can find information on Pfizer’s latest, ambitious marketing effort (dangerously linking propaganda/public ‘education’ with amusement/fun) involving the building of 12 billion dollar Business Park)
According to Cap Gemini, a consultancy, direct-to-consumer advertising now accounts for 16 per cent of total promotional spending in the healthcare industry. In terms of TV advertising, medicines come third after cars and retail products. Such advertising is largely a US phenomenon following a relaxation in regulations in 1997, a change currently under review. But in Europe, where direct advertising of branded prescription products is banned, companies have not given up the chance of creating consumer pull. They do so through Internet sites, which can be viewed from anywhere in the world. (Warnings that information is intended for US audiences only tend to be in small type.) They also promote the use of their medicines through disease awareness campaigns, such as that of Pharmacia in the UK urging patients to seek treatment for urinary incontinence. Obviously Pharmacia has the leading medicine in this field.
When Mr Ebeling joined Novartis from the soft drinks industry, what struck him most were the similarities. ‘The same rules of differentiating your product, making sure you promote with the right message in the right media to the right people is really the same,’ he says. ‘What’s different is the product, which is more complicated. But the principles of marketing and sales are the same.’ Among Bayer’s best-selling medicines is a brand as familiar as Coke or Pepsi. The brand, of course, is aspirin, a drug that has just completed its one-hundredth anniversary .
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7. Pfizer steals indigenous knowledge
The profit incentive caused a sudden revival of interest in indigenous knowledge. The progression of biotechnology opens up new possibilities to exploit natural resources in the Third World. Pharmaceutical companies increasingly take genetic material and/or indigenous knowledge from the South to make fortunes from natural remedies, without asking for consent, let alone paying any kind of compensation. After patenting the ‘new inventions’, the Western drug industry can exploit the South even further by forcing developing countries to pay high royalties over the patented drugs imported from the West –drugs that originate from their soil and knowledge! The following case is just another sad example of this general practice, also labeled as bio-piracy.
Pfizer has recently been accused of stealing an ingredient of the Hoodia cactus which African tribesmen have used for thousands of years to stave off hunger and thirst on long hunting trips. The Kung bushmen who live around the Kalahari desert in southern Africa used to cut off a stem of the cactus about the size of a cucumber and much it over a couple of days. According to tradition, they ate together so they brought back what they caught and did not eat while hunting. Now the Hoodia is at the centre of a bio-piracy row.
Last April, Phytopharm, a small firm in Cambridgeshire, said it had discovered a potential cure for obesity derived from an African cactus. It emerged that the company had patented P57, the appetite-suppressing ingredient in the Hoodia, hoping it would become a slimming miracle. Phytopharm’s scientists boasted it would have none of the side effects of many other treatments because it was derived from a natural product. The discovery was immediately hailed by the press as a ‘dieter’s dream’ and Phytopharm’s share price rose as City traders expected rich returns from a drug which would revolutionise the £6bn market in slimming aids. Phytopharm acted quickly and sold the rights to license the drugs for $21m (£14,321m) to Pfizer.
While the drug companies were busy seducing the media, their shareholders and financiers about the wonders of their new drug, they had forgotten to tell the bushmen, whose knowledge they had used and patented. Phytopharm’s excuse appears to be that it believed the tribes, which used the Hoodia cactus, were extinct. The tribesmen were angry, saying their ancient knowledge had been stolen, and planned to launch a challenge and demand compensation. Speaking to the Observer, the lawyer for the bushmen Roger Chennells said: ‘They [the bushmen] are very concerned. It feels like somebody has stolen their family silver and cashed it in for a huge profit. The bushmen do not object to anybody using their knowledge to produce a medicine, but they would heave liked the drug companies to have spoken to them first and come to an agreement.’ 
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8. Pfizer ‘illegally tested drugs on children’
The Guardian reports that Pfizer has been accused of irregularities during a clinical trial in Nigeria. The company is said to have used an experimental drug on sick children during a major outbreak of meningitis, without official approval. A Nigerian doctor employed by Pfizer to run the clinical trial in Kano said that the letter certifying approval by the ethics committee at the hospital where the children were treated was probably written a year after the experiment took place. The hospital’s medical director, Sadiq S Wali, talking to the Washington Post, confirmed this. He told the Post that the document was ‘a lie’. He said the hospital had no ethics committee at the time of Pfizer’s trial.
The revelations were hugely embarrassing to Pfizer. The company still insists there was a philanthropic element to the trial. ‘Médecins Sans Frontièrs (MSF) was using the only drug that was available in Nigeria –one that had not been allowed in the west for 50 years because of the side-effects’, said Pfizer’s spokeswoman, Kate Robins, whereas Pfizer introduced not only its experimental drugs, but also the ‘gold standard’ drug used in the west. Asked why, in that case, Pfizer had treated only 200 children when the epidemic killed 15,000, she added: ‘Science governs our decisions.’ The experimental drugs used, Trovan, has since been licensed, but not for children. However, it is not marketed in Nigeria. Like all new drugs, which have a 20-year patent protection, the cost is too high for developing countries .
Obviously, the situations of drugs not allowed in the West being used in developing countries are highly immoral. Pharmaceutical companies have aggressively pushed for policies that allow for these kind of (dumping) practices to take place. In order not to let products (forbidden in the West presumably to protect the health of consumers or the environment, but more likely to prevent future damage to corporations caused by bad publicity and/or costly lawsuits) ‘get wasted’, corporations make sure regulations allow them to ship those products (for example, pesticides, genetic engineered foodstuffs, medicines) to the South. In addition, leverage of corporations can often guarantee that the responsible public officers, regulators or politicians temporarily close their eyes to it.
After several lawsuits in Nigeria, it was only last September that the first suit was filed in the US. The lawsuit, filed on behalf of 30 Nigerian families, alleges Pfizer violated their human rights when it set up the clinic to give Trovan to the 200 children. The families say Pfizer did not obtain “informed consent” before administering the treatment. “This test was conducted in violation of international laws and treaties,” the lawsuit says, “including the Nuremberg Code of 1947, which was enacted, in part, to prevent the horrors of medical experimentation performed during the holocaust from ever happening again.”
The affair is embarrassing for the world’s largest pharmaceutical company, as the industry is attempting to recover from months of bad publicity over prices and access to its medicines. Aid groups say the Trovan lawsuit highlights actions even more sinister. In the developing world, some non-governmental organisations (NGOs) allege, companies are conducting sub-standard clinical trials on potentially dangerous drugs. Pfizer heralded Trovan as a medicine capable of killing bugs that had grown resistant to antibiotics. But its promise was overshadowed by safety issues, and it was never approved by US regulators for use on children .
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9. Pfizer sells dysfunctional heart valves
Three ex-employees of Pfizer have alleged that the company’s subsidiary Shiley Inc. regularly produced artificial heart valves that workers and supervisors knew were unsafe. Their testimony confirms a Food and Drug Administration (FDA) report that claiming that the valve was manufactured under conditions ‘in serious violation’ of good manufacturing processes. Fractures occurred in at least 501 of the devices that were sold from 1979 to 1986, when Shiley ceased production due to ‘negative publicity’. At least 250 people have died from the fractures.
Victims of the valve or their relatives name Shiley Inc. in about 200 lawsuits. At least 30 cases have been settled. The terms of the settlements, however, remain secret. Facing tens of millions of dollars in potential court awards, Pfizer has not limited itself to making settlement offers. The company is pushing for legislation that would effectively deny access to the US judicial system to foreigners injured or killed by the valve. Because over half of the recipients of the valve are foreigners, Pfizer could escape significant financial liability if the bill becomes law. However, the bill would apply to all corporations, not just Pfizer. In essence, it would shield corporations from liability for dumping their wares on an unsuspecting and already disadvantaged foreign clientele. Currently, foreign victims may bring suit in the American State courts. The Pfizer-backed bill would allow US corporations to remove almost all such cases to US federal courts .
The Guardian tells the story of Elaine Levenson, a Cincinnati housewife, who is waiting for her heart to explode. In 1981, surgeons implanted a mechanical valve in her heart, the Bjork-Shiley, the ‘Rolls-Royce of valves’, her doctor told her. What neither she nor her doctor knew was that several Bjork-Shiley valves had fractured during testing, years before her implant was done. Pfizer’s offshoot Shiley Inc. never told the government. At Pfizer’s factory in the Caribbean, company inspectors found inferior equipment, which made poor welds. Rather than toss out bad valves, Pfizer management ordered the defects to be ground down, which weakened the valves further, but made them look smooth and perfect. Pfizer then sold them worldwide.
When the valve’s struts break, the heart contracts – and explodes. Two-thirds of the victims die, usually in minutes. In 1980, Dr Viking Bjork, whose respected name helped sell the products, wrote to Pfizer demanding corrective action. He threatened to publish cases of valve-strut failures. A panicked Pfizer executive telexed: ‘ATTN PROF BJORK. WE WOULD PREFER THAT YOU DID NOT PUBLISH THE DATA RELATIVE TO STRUT FRACTURE.’ He then gave his reason for holding off public exposure of the deadly valve failures: ‘WE EXPECT A FEW MORE.’ His expectations were realised. The fracture count has now reached 800, with 500 dead – so far. Bjork called it murder, but kept silent.
In Britain, The Guardian continues, Pfizer has little to fear. A London solicitor for the pharmaceuticals industry explains: ‘US legal excesses are not visited upon defendants here.’ And the drug companies want to keep it that way. If you happen to be in Blackpool today, you can drop by Pfizer’s booth at the Labour Party Conference. (For more discreet approaches to Downing Street, Pfizer retains GPC Access, Derek Draper’s former lobby firm.) Pfizer has two reasons to cuddle up to New Labour: it wants the National Health Service to pay a stiff price for its love potion, Viagra; and it wants to prevent a toughening of UK products liability law recently demanded by the European Union .
Back in the US, victims’ rights are under attack. Corporate America is funding an ad campaign portraying entrepreneurs held hostage by frivolous lawsuits. But proposed remedies stink of special exemptions from justice. Eight weeks ago, the Republican senate leader slipped into patients’ rights legislation a ban on all lawsuits against makers of parts for body implants, even those with deadly defects. The clause, killed by exposure, was lobbied by the Health Industries Manufacturers Association, supported by – you guessed it – Pfizer.
Now the industry seems to have won a new battle. After many debates and political tussle to define patients’ rights George W. Bush managed to get a good deal, formally labelled as a ‘compromise’ between him and Rep. House Member Norwood, but clearly in favour of the pharma industry. The new compromise will expose health plans to more lawsuits in state courts, but will limit when patients can sue and how much they can win in damages. The question of litigation was at the core of the White House negotiations with Norwood. In essence, the compromise allows Norwood to say he is giving patients freedom to sue in state courts but includes enough restrictions [New federal law will have to spell out the exact terms under which patients can bring suits in state courts. No doubt the industry will have a major hand in the definition of these new set of federal restrictions] for Bush to say it would not promote ‘frivolous lawsuits.’ The compromise will be brought to the Senate any time soon .
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10. Heart Attack link to Arthritis Drugs
Pfizer, Merck and Pharmacia have been put on the defensive over independent scientific evidence that their billion-dollar arthritis drugs could be linked to an increase in heart attacks.
‘An analysis of clinical trials by scientists from the Cleveland Clinic Foundation suggests that there is a potential increase in the rate of heart attacks, strokes and other cardiovascular events among patients on the drugs. The scientists, who report in the latest issue of the Journal of the American Medical Association, say that the data “raise a cautionary flag”.’
Pharmacia and Pfizer have responded by saying: “The article . . . is not based upon any new clinical study. The companies believe it is essential to exercise extreme caution in drawing any conclusions from this type of analysis.” The two companies point out that the cardiovascular effects of the drug were studied by the FDA in February .
(Important to note is that FDA’s (= Food and Drug Authority) status is quite dubious.
The FDA is well known for its links with industry)
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11. Animal suffering
Pfizer uses animals to test its products. But of course, as a company with high stakes in animal health care, Pfizer claims to be “your pet’s best friend”. Pfizer gives its customers advice on ‘what to do when your best friend (your pet) is hurt.’ E.g., in case of osteoarthritis, when you notice the symptoms, you’re being encouraged to see your veterinarian and ask him/her about Rimadyl®, a pain relief medication that can help a dog suffering from arthritis. Rimadyl is supposed to relieve pain, ‘allowing for increased activity and freedom of movement, thereby improving a dog’s quality of life’.
But many dog-owners saw the quality of their dog’s life deteriorate instead. Jean Townsend filed a class-action lawsuit was on Oct. 12 1999 on behalf herself and other dog owners whose dogs had suffered or died after taking Rimadyl® (the ‘miracle drug’ for arthritis heavily advertised by Pfizer). Jean Townsend’s dog’s situation deteriorated fast after taking Rimadyl, to the point where he had to be euthanized. Quite a few other dogs, it turned out, had suffered adverse reactions to Rimadyl as well. The class-action lawsuit alleged that Pfizer Inc. knew about the adverse side effects, and did little to communicate them to pet owners .
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12. Luring doctors
Sponsoring in order to increase the company’s influence, visibility and market shares is high on Pfizer’s agenda. Sponsoring doctors (a general practice in the pharma industry) is considered a very effective way to bring medicines to the public. Although there is drug advertising in the lay media and many drugs are sold unofficially over the counter, the majority of drug sales come from doctors’ prescriptions. Doctors are obliged to improve themselves through continued medical education (CME). Drug companies influence the content of medical education (for example, by giving false product information, by deciding on the venues, speakers, topics, and so on). They also ‘seduce’ doctors with gifts, sponsored meetings (including luxurious dinners, cocktail parties and comfortable overnight stays in top of the bill hotels), high payments for conducting research or publishing reports, etc .
Doctors are being enticed into, for example, the twisting of trial results or the groundless creation of data. A study conducted by the FDA has revealed that one in five doctors investigated, who carry out field research of new drugs, had invented the data they sent to the drug companies, and pocketed the fees. Citing case examples, Dr Braithwaite states: ‘The problem is that most fraud in clinical trials is unlikely to even be detected. Most cases which do come to public attention only do so because of extraordinary carelessness by the criminal physician…’
According to Dr Judith Jones, Director of the Division of Drug Experience at the FDA, if the data obtained by a clinician proves unsatisfactory towards the drug being investigated, it is quite in order for the company to continue trials elsewhere until satisfactory results and testimonials are achieved. Unfavourable results are very rarely published and clinicians are pressured into keeping quiet about such data.
It is very easy for the drug company to arrange appropriate clinical trials by approaching a sympathetic clinician to produce the desired results that would assist the intended application of the drug. The incentive for clinical investigators to fabricate data is enormous. As much as $1000 per subject is paid by American companies, which enables some doctors to earn up to $1 million a year from drug research, and investigating clinicians know all too well that if they don’t produce the desired data, the loss of future work is inevitable .
Thirteen of the world’s leading medical journals have recently (September 2001) mounted an outspoken attack on the rich and powerful drug companies, accusing them of distorting the results of scientific research for the sake of profits. The Lancet, the New England Journal of Medicine, the Journal of the American Medical Association and other major journals accused the drug giants of using their money – or the threat of its removal – to tie up academic researchers with legal contracts so that they are unable to report freely and fairly on the results of drug trials .
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13. Pfizer’s theatre of philanthropy
In addition to the sponsorship of doctors, education, research, politicians, etc., Pfizer is keen to donate to charity. Pfizer even has a philanthropy home page and the company has set up its own charitable, ‘independent’ foundation, the Pfizer Foundation, Inc (www.pfizer.com/pfizerinc/philanthropy/) established by Pfizer in 1953. The Foundation’s mission is ‘to promote access to quality health care and education, to nurture innovation and to support the community involvement of Pfizer people’. In 2000, Pfizer Inc and the Pfizer Foundation donated more than $300 million (£204,6 million) in product and cash donations worldwide, making it, in its own words, ‘one of America’s most generous companies in the US.’
Given Pfizer’s criminal record, and all its serious and life-threatening consequences [Most appalling is probably Pfizer’s refusal to cut drug prices in poor countries and Pfizer’s aggressive efforts to safeguard its patents and pricing drugs out of reach of countless people] Pfizer’s donations to charity can only be labelled as a façade. Although some intentions and concerns might be sincere, and although Pfizer is (set alongside other companies) relatively generous, problems run so much deeper. And Pfizer knows it. But the fact remains that charity (preoccupation with profits and self-interest being cleverly masked up) is a good venue for brushing up the corporate image.
Besides, donations to charity are negligible in comparison to the amounts of money spent on other projects such as the 12 billion dollar business park (see below) or in comparison to Pfizer’s profits. (In the first half of 2001 Pfizer’s total revenue increased with 11% and equated $15.6 billion (£10,6 billion), its net income rose by 33%).
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14. Twelve billion dollar Business park –PfizerWorld
On 23 April 2001 Pfizer announced that it would be building a 12 billion dollar (£8,2 billion) (!) theme park in central Florida. Funded by a consortium of Health Maintenance Organisations (HMOs) and government agencies, the park would serve as a vehicle to introduce and promote new drugs to the public. The announcement was made by the chief executive officer of Pfizer, Hank McKinnell, surrounded by such notables as chairman of HMO Kaiser Permanente David Lawrence, attorney general John Ashcroft, and vice president Dick Cheney.
Named PfizerWorld, the park will be comprised of a combination of rides, entertainment, and educational exhibits, geared at both adults and children. ‘It will be a collage of information and fun,’ McKinnell remarked. Ride names already proposed include The Gonococcal Caves and Heart Attack Mountain.
Also planned are a series of cute animal characters for the park, designed to excite children about science and health. With names such as Alan the Alcoholic Alligator and Diana the Diabetic Dog, each character would have a theme disease that would then serve as a bridge to information regarding a specific Pfizer product. ‘What better way to educate kids about Viagra than with Mo the Impotent Mouse?’ a Pfizer PR spokeswoman remarked. Pfizer has already contracted toy manufacturer Hasbro to release a series of PfizerWorld dolls and action figures to accompany the live characters.
McKinnell fended off early criticism that the park was merely an excessive advertising ploy. ‘Despite what one might be thinking, this is not an extravagant corporate ploy designed to trick the easily led masses into using our overpriced drugs despite the availability of cheaper, more effective alternatives. Our only interest is in educating the public. And if Pfizer gets a little free advertising along the way, well, of course we won’t complain.’
Also of some concern was the source of the 12 billion dollars needed to build PfizerWorld. One insider remarked, “Who do you think will be paying for this monstrosity? All those CEO’s and politicians? No no, that money is coming right out of the public’s pockets. This has to be the biggest racket this nation has seen since the JFK assassination, but all it’s going to take is one look at those huggable little animals and everyone will decide that they just don’t give a damn.”
Despite the visible presence of the Bush administration during the announcement, government officials and politicians were surprisingly tight-lipped. ‘My only comment on the issue is that both the president and I support any endeavor to teach young people about capitalism…wait…I mean about health’, Cheney remarked as he was hurried into the presidential helicopter .
Pfizer is scheduled to break ground on the project in about two months, with an estimated completion date of Spring 2003 .
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15. What Pfizer doesn’t tell you…
New London, Connecticut, US (2001)
Pfizer proudly told the people of New London that the company would play a big role in revitalizing New London. Pfizer had made a deal with some federal and state agencies in which Pfizer would build a global development facility on a brownfield on the bank of the river Thames. Pfizer also committed to returning a polluted, festering waterway called Bentley Creek to its original pristine condition. Not only was Pfizer going to build a 270,000-square-foot facility, but also it was to become the Pfizer Global Research and Development World Headquarters. More prestige and jobs for the people of New London…
This is what Pfizer said: ‘Our Central Research group is currently developing the former New London Mills site, a 22-acre abandoned industrial property. With assistance from the State of Connecticut, the City of New London, and the New London Development Corporation, we will transform the mill site into a new Pfizer research facility, which is expected to serve as a catalyst for additional development in downtown New London. The project resulted from a successful partnering between Pfizer and numerous federal and state agencies to negotiate solutions for site contamination, wetlands, coastal area management, storm water, and other environmental issues. Because of the economic confidence that our commitment has inspired, the State of Connecticut is providing funding to rejuvenate and remediate the surrounding area, along with state and local commitments to upgrade the nearby municipal wastewater treatment facility. Besides the tangible benefits of employment and tax revenues, we believe this redevelopment will bring inspiration, innovation, and new energy that will enrich the life of New London.’
Pfizer neglects to mention the following:
That they have received a 10 year tax abatement on their new Global Research Facility
That the majority of employees at their new facility will not be New London residents but current Pfizer employees
That the residents of New London may only hope to be employed in the cafeteria and janitorial sections of Pfizer
That Pfizer has been instrumental in attempting to destroy the Fort Trumbull neighborhood. According to Claire Gaudiani, outgoing president of Connecticut College and NLDC, on whose board George Milne, Jr sits, the destruction of this neighborhood is meant to complement Pfizer’s world class facility.
That George Milne, Jr. (head of Pfizer) has committed Pfizer to 100 rooms daily in a planned hotel .
16. Pfizer helps out Tobacco Industry
Pfizer and Boehringer Ingelheim are about to market a new treatment for chronic obstructive pulmonary disease (COPD). COPD is a debilitating lung disease caused primarily by smoking. It kills three million people a year worldwide, is the fourth leading cause of death in the US, and the fifth-leading cause of death in the world.