• by Thom Forbes  @tforbes, March 14, 2011

Pete Thamel last week keyed an analysis of the ethical miasma that seems to pervade collegiate sports to an announcement that Ohio State was suspending its football coach for the first two games of next season after finding that he did not disclose information about potential NCAA violations by some of his knuckleheaded players. Jim Tressel will also lose $250,000 of his salary to fines, leaving him a measly $3.75 million for the year's work.

The announcement came at an inconvenient time for Tressel as he had to interrupt a tour for his new book, Life Promises for Success: Promises From God on Achieving Your Best.

"In a season when scandals, investigations and benefits from agents have defined and tarnished college athletics, Tressel's book tour offers a reminder of the real manual for success -- find ways around NCAA rules, enter gray areas, apologize when you get caught and move on," Thamel pointed out in the New York Times.

As I read the piece, I could not help but be reminded of the pharmaceutical industry. Time after time, it seems, we read about seemingly severe fines being imposed for marketing transgressions of one sort or another. But when you view those against the perspective of the profits the companies made, it's usually just a drop in the exchequer.

And where is the personal accountability? As with the financial crisis, it's as if we accept the corruption as an endemic condition of the system itself. People are not to blame. No one goes to jail, or even gets fired, it seems.

I recalled having read an excellent article on the subject some time ago and Googled the phrase: "off label marketing worth more than the penalty of getting caught." The story I was thinking about, by Bloomberg's David Evans in November 2009, popped right up.

His lede is: "The $2.3 billion in fines and penalties Pfizer paid for marketing Bextra and three other drugs cited in the Sept. 2 plea agreement for off-label uses amount to just 14% of its $16.8 billion in revenue from selling those medicines from 2001 to 2008. The total of $2.75 billion Pfizer has paid in off-label penalties since 2004 is a little more than 1% of the company's revenue of $245 billion from 2004 to 2008."

Pfizer evidently was not a rogue operation working outside industry norms. Another repeat offender, Lilly, made 25 times in revenue for its schizophrenia drug Zyprexa over eight years than it paid in penalties for marketing it for off-label uses.

Lon Schneider, a professor at the University of Southern California's Keck School of Medicine in Los Angeles, told Evans that companies view the fines as little more than speed bumps on the road to riches. "There's an unwritten business plan," he said. "They're drivers that knowingly speed. If stopped, they pay the fine, and then they do it again."

Jerry Avorn, a professor at Harvard Medical School, was even more damning. "Marketing departments of many drug companies don't respect any boundaries of professionalism or the law," he said. "The Pfizer and Lilly cases involved the illegal promotion of drugs that have been shown to cause substantial harm and death to patients."

Blogging about three agreements the Justice Department reached in one week with three other companies for marketing malfeasances last year, Pharmalot's Ed Silverman pointed out that one similarity among them was that none named executives' names. But he suggested that the government was going to get tougher in the future, pointing to a story that reported Lewis Morris, the Health and Human Services Inspector General, would like to see repeat offenders be forced to fire executives engaged in illegal practices and have them banned from working at other companies that do business with the government.

We all realize that the pharmaceutical industry is a risky and ruthless business that does a lot of good for people. Clearly, R&D is very expensive and dicey and even windfalls don't last forever. As the Times' Duff Wilson pointed out in a major story on March 6, Pfizer alone could lose $10 billion a year when its patent on Lipitor expires later this year.

"This year alone," Wilson writes, "the drug industry will lose control over more than 10 megamedicines whose combined annual sales have neared $50 billion."

Another mitigating factor, at least in the eyes of those who have been helped, is that off-label uses often provide great benefit to patients, as several comments to Silverman's blog pointed out. It may be that our national emphasis on "sick care" instead of "health care" is entirely misplaced, and that we're creating a lot of pills for problems that are better dealt with preventatively, but that's not something that someone finding relief through a medication wants to hear.

In the end, two industries that should be viewed in a positive light for the good that they do -- collegiate sports and medicines -- all too often find themselves in the papers for unethical or illegal practices. I wonder how long strong-arm lobbying, marketing and public relations will be able to paper over the transgressions before the public demands real accountability, not just fines and an insincere apology.