HP “Buyer Incentives” and Off-Label Prescription Sales: Are there any good apples left to spoil the maleficence barrel?

Posted on May 19, 2010


In many foreign countries, particularly in those with developing economies, it is common to engage in business practices that are prohibited by laws and regulations applicable to us, such as the Foreign Corrupt Practices Act. Although we implement policies and procedures designed to facilitate compliance with these laws, our employees, contractors and agents, as well as those companies to which we outsource certain of our business operations, may take actions in violation of our policies. Any such violation, even if prohibited by our policies, could have a material adverse effect on our business.

from Hewlett-Packard, Watergate and the FCPA by Thomas Fox, infosec island (May 18th, 2010)

I wonder if the high-tech and pharmaceutical companies use the same lawyers and advertising agencies?

As I read the excerpts from HP’s 2008 and 2009 Annual Reports, which were graciously provided in a compelling post by Thomas Fox on the infosec island blog, I could not help but recall all those sunny disposition commercials for anti-depressants. You know the ones, where tranquil scenes of ebbing waters and contented smiling faces are accompanied by a melodious tune during which time in the background an upbeat and chirpy voice provides a litany of side-effects and life threatening risks associated with taking the medication.

Ahh, I feel a warm flow of integrity that suggests either an “ignorant knowledge” or an “unaccountable awareness” of the fact that the drug can kill, we just don’t know who. Where’s Mikey when you need him? (Cue Video Link for those who may not be familiar with Mikey.)

Now someone out there may suggest that the mere warning of the possibility of a fatal side effect or, in the case of HP impropriety, without acknowledging direct involvement should be sufficient to shield companies from the consequences of their actions. However, and referencing the real-world in which we all live, are not bartenders – even party hosts now held accountable if someone attending their venue is drunk, gets behind the wheel and causes an accident?

Let’s look at the recent “off-label” sales scandals involving venerable pharmaceutical companies such as Johnson & Johnson and AstraZenca – one which is on the wrong end of a Federal lawsuit and the other that just settled by way of a $520 million penance.

In the case of Johnson & Johnson, who has earned millions of dollars by selling Risperdal as an “off-label” product to treat patients who have dementia but are not psychotic, we are in reality talking about a story of life-threatening greed on the part of the company.

For those who may not be familiar with the term off-label, what it simply means is that the Food and Drug Administration has only approved Risperdal for treating schizophrenia and bipolar disorder. However, through physician trial and error some drugs that have been approved to treat ailment A (FDA approved) are also found to be effective in treating ailment B (non-FDA approved, off-label). To this point in time however, there has been no physician case references or published materials regarding the effectiveness of Risperdal in treating off-label illnesses such as dementia in senior citizens who did not suffer from psychosis?

Now here is what I referred to as being a life-threatening twist; a 2005 FDA report found that the use of anti-psychotic drugs was directly linked to an increased risk of death amongst the elderly. This means that for all intents and purposes a drug which is known to increase the risk of death (remember the melodious and sunny commercials to which I had referred earlier?) is being sold to a “high risk group” – illegally I might add, even though there is no substantive evidence by way of physician case references that it is effective in treating the non-approved FDA, off-label illness. Hmmmm!

Turning to the HP story once again, which centers of the violation of the Foreign Corrupt Practices Act or “FCPA,” Hewlett-Packard is under investigation for alleged bribes paid by the company for the sale of computer hardware that was to be used by the office of the prosecutor general of the Russian Federation. Cue melodious music . . .

While infosec island’s Fox, referencing articles in the Wall Street Journal, The Russian Monitor and New York Times, follows the Watergate-themed track of “What did HP know and when did they know it,” I cannot help but think that the bigger question is “What did HP not want to know and what did they do to avoid knowing.” Honest officer, I knew that Joe was a little wobbly when I poured him that last drink, and then saw him take the keys out of his pocket as he headed to the door to drive home but, I did not actually see him get into his car. Case dismissed . . . right?

Perhaps, and on a go-forward basis, both HP and Johnson & Johnson will take a page from the Alan Greenspan book of industry maleficence where he had made the suggestion that there was no such thing as fraud in the investment markets, and even if there were, the market would correct itself. Specifically, Greenspan was suggesting that even if there were fraud, the people who were defrauded would as The Young Turks’ Cenk Uygur put it, “somehow correct the fraud” on their own withour the need for government intervention. (Note: here is the link to the April 14th, 2010 segment “Take The Financial Bull By The Horns” talking about the Greenspan comments on PI Inquisitive Eye TV.)

Automatic self-correction . . . now that is a technology that HP should work on.

PI Window on Business Show

Remember to use the following link to tune in to both the live and on-demand broadcast “Illegal Sales & The Overprescribing of Antipsychotic Drugs: Is A New “Drug War” Brewing?” which airs on Friday, May 21st at 4:00 PM EST on the PI Window on Business on the Blog Talk Radio Network.