FDA Attempts Ousting of Longtime Drug-Company CEO, and Other News
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Health Care Policy and Reform Insights | NCPA
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It’s hard to believe that the federal government can tell a company to fire its CEO.
Sound on the video was not good. Great idea, though.
Jeff,
The government said that if the company (Forest) did not relieve their CEO they would not have access to lucrative government contracts. The government in no way fired him.
He can stay as long as the shareholders allow him to. Isn’t that the private sector way?
Come on, Erik, with the government financing such a large share of our prescriptions, “firing” is the right term. Although, I suppose it counts as yet another “doh!” moment for the pharmaceutical industry, which did a lot to bring government into its business.
The government makes it clear that it’s taking this step because it doesn’t believe that fines are adequate punishment. But the “malfeasance” we’re talking about here has to do with aggressive marketing and fiddling prices to minimize effective discounts. If it were deliberately manufacturing bad medicines, then I’d be all in favor of personal criminal charges. But that would have to be proven at trial, not an edict by bureaucrats.
I agree with John Graham.
The malfeasance has to do with deviating from government regulations in an industry that is inundated with overly-burdensome government regulations. The FDA doesn’t prevent doctors from prescribing drugs off-label once a drug is approved. But it prevents drug makers from communicating with doctors about therapies for which the drug was not officially approved for. Aggressive drug reps telling doctors about therapies other doctors have used is violation.
In addition, the federal government requires rebates off of average manufacturers price (340B program), which forces drug makers to raise prices for private firms and prevents them from offering additional discounts for any reason. If a drug maker has an overstock of a given drug and offers Walmart a deal to reduce inventory, the company would have to offer buyers with the 340B program the same discount on all purchases of that drug minus the required rebate.
Forest Labs may have crossed the line into questionable business practices. But it was an arbitrary line created by a bureaucratic system.
John,
If a company requires government support to create a profit they just might think twice before defrauding the hand that feeds it. There are penalties one has to suffer when misdeeds are brought to light. It is called accountability.
And again, the government did not fire anyone. It will be the shareholders who fire the CEO for malfeasance.