Corporate Crime

Diagnosis

Have you seen TV advertisements soliciting clients who have taken a specific drug and may have been harmed and eligible for a financial settlement? If so, which drug?
How would a conflict theorist frame this issue?
If pharmaceutical companies pay billions of dollars in settlements, why does this type of corporate crime continue?

There are consistent issues related to corporate crime in healthcare as it is difficult to detect and prosecute, and penalties do not seem to serve as a deterrent. A specific area of corporate crime that has gained attention is crime by pharmaceutical companies, also known as “Big Pharma.” These multinational corporations manufacture and market pharmaceutical drugs internationally. In 1984, John Braithwaite wrote Corporate Crime in the Pharmaceutical Industry, exposing the industry’s unethical and corrupt behavior endemic in the sector. A questionable practice is that pharmaceutical companies pay for the majority of their clinical trial drug testing research so that they can win approval for new drugs to be approved by the U.S. Food and Drug Administration (FDA). This creates a conflict of interest as the companies have a vested interest in showing the drug is safe and effective. As a result, some companies have hidden evidence that the drug is unsafe. In the 1980s, the Eli Lilly company kept the arthritis drug Oraflex on the market even though they knew people using it could be harmed. Approximately 3,500 people experienced adverse side effects and the drug was linked to over 100 deaths. Eli Lilly pleaded guilty of misdemeanor charges and was fined $25,000. The amount of fines range from a slap on the wrist to billion dollar settlements as indicated below.

* In 2008, Merck & Co., the manufacturer of the painkiller Vioxx, paid out $4.85 billion to settle 50,000 claims that users suffered heart attacks and strokes.

* In 2012, GlaxoSmithKline pleaded guilty and agreed to pay $3 billion to resolve its criminal and civil liability due to unlawful promotion of certain prescription drugs, failing to report certain safety data, and false price reporting practices.

* In 2015, Takeda Pharmaceutical Co., the maker of the diabetes drug Actos, agreed to pay $2.37 Billion to settle more than 8,000 federal and state lawsuits.

The pharmaceutical industry is so profitable that even billion dollar settlements do not act as deterrents. Johnson & Johnson, Merck, Pfizer, Novartis, and GlaxoSmithKline have faced repeated allegations but are still hugely profitable.