Tuesday, March 10, 2009


Eli Lilly and Corporate Death Penalty

One of our loyal readers sent the following very provocative item below. It raises the question of whether any company can create such havoc that, at some point, its corporate license should be taken away. The example used is Lilly.


Personally, I would not go there. There are other historical examples given, but the one I know about was I.G. Farben in Nazi Germany. Still, even in the case of Farben, its constituent companies lived on: as BASF, Bayer, and Hoechst (now Aventis). Indeed, even some of the managers from the Nazi period returned in later years.

The constituent companies--particularly Hoechst--have provided exhaustive documentation of their role during the war, and historians have told the tale through that documentation.

Of course, this was all after the fact, and the article linked describes Lilly as a "public menace." Personally, even if I agreed (I don't), I would rather have the knowledge than the vengeance.


  1. Yes, and what’s taking so long?

    From the link:

    “One marketing effort consisted of the Lilly sales force urging geriatricians to use Zyprexa to sedate unruly nursing home and assisted-living facilities patients. Lilly sales reps distributed a study claiming that elderly patients taking Zyprexa required fewer skilled nursing staff hours than were necessary for patients taking competing medications. Magid stated that Lilly sales reps were "trained to use the slogan five at five, meaning five milligrams at 5 o'clock at night will keep these elderly patients quiet." Illegally marketing Zyprexa for elderly patients was especially troubling for prosecutors because Zyprexa increases the risks of heart failure and life-threatening infections such as pneumonia in older patients.

    In addition to targeting the misbehaving elderly, Lilly also targeted annoying kids. New York Times reporters Gardiner Harris and Alex Berenson, who have been covering Eli Lilly and Zyprexa for several years, reported on January 14, 2009, "The company also pressed doctors to treat disruptive children with Zyprexa, court documents show, even though the medicine's tendency to cause severe weight gain and metabolic disorders is particularly pronounced in children ... The children receiving Zyprexa gained so much weight during the study that a safety monitoring panel ordered that they be taken off the drug."

    Alaska was too quick to settle. The days of being held hostage by preemption are coming to a close.

    See: Alaska settles suit against Eli Lilly - International Herald Tribune

  2. My mother died as a result of the drug, Oraflex, that is commented upon in the article. Lilly pled guilty to a misdemeanor charge and the Reagan DOJ fined the company about $25,000. That comes out to a few hundred bucks per corpse.

    Nevertheless, I would agree with Justice that what we need is honesty and confronting the past, not retribution. If a company like Hoechst/Aventis can deal with the fact that it used Auschwitz to to increase market share, than surely Lilly can deal with the reality of its own past actions.

    I don't expect that it will. But I will hold on to the fantasy.

  3. Interestingly Lilly is a Business Ethics Leadership Alliance Members at Ethisphere Institute

    Could they be trying to truly change their image, or is this just a ruse? Anyway, the BELA is some leading American and global businesses that are teaming up with the Ethisphere Institute to stand behind a declaration of ethical business principles and to prepare the groundwork for improved business ethics across the global economy.

    See here: http://ethisphere.com/who-are-bela-members/

  4. The following link is to a story published in the February 09 Edition of Rolling Stone; the circumstances surrounding the marketing of Zyprexa bare a striking familiarity to the Phen-fen fiasco perpetrated by American Home Products.
    I admit after having reread the Wyeth decisions it had crossed my mind that the dissenting minority made some excellent points; however after reading this article and the similar tactics used by American Home with Phen-fen, any sympathy I may have had for Wyeth quickly disappeared.
    Speaking of phenergan, in my research into the drug, I discovered reports on its use and apparently the use of the IV Push method, at least according to the responses I read from hospital personnel and nurses, the use of the IV Push method of administration was not uncommon. This fact, if true, supports the Medical malpractice aspect of the issue at bar, however Pfizer when confronted with a similar issue on a similar drug chose to withdraw the recommendation of the IV Push method and may have withdrawn the drug completely.
    In a piece opposing Levine a writer Val Jones stated that recipients of phernegan had a 1 in 20 million chance in developing gangrene; the author based this on the fact that over 200 million doses of Phenergan had been administered and the statistics cited reflected the 1 in 20 million odds. What the author omits was the explicit breakdown of for administration of the drug. The author also assails the fact that a decision against Wyeth would lead to the creation of State regulations and patients suffering from ill effects from any drug would be free to pursue a lawsuit whether the warning label concerned specific warnings short of a Black Box warning. While the author raises some valid points, the fact is the FDA is not doing its job and has turned over all review to the industry they were designed to protect.
    As the Zyprexa incident points out the studies are conducted in a manner that leads to a conflict of interest and over promotion of a questionable drug.
    Justice asked my opinion on whether existing case law can used as an immunity shield and if memory and understanding serve me correctly, the affirmative defense of Defensive Collateral Estopple may come into play. However unless the cases cited are in the jurisdiction where the case is being heard these doctrines and prior precedents would only serve as persuasive and not binding authority.


  5. I have read the Rolling Stone piece. It is sobering, but also confirming of pretty much all the "revelations" that have emerged when court documents are made public. The Seroquel documents, that I have commented upon in another thread, tell essentially the same tale.

    I will shoot for a bottom line. What the internal documents almost always suggest is that, in the blockbuster arena, companies approach compliance in cat & mouse fashion--"Catch me if you can."

    As I've said elsewhere, this is equivalent to the moral development of the average ten-year-old. I am certain it is not how senior execs conduct the rest of their lives. But it has become close to the norm in everyday business practice in pharma.

    To say the obvious, this leads to genuinely horrific consequences. In essence, companies suspend ethical self-regulation in favor of external sanctions. And because companies always know the reality of their products before any external agency--FDA, DOJ, whatever--this means that a kind of sociopathy becomes the norm of everyday business practice

    I would be glad for someone to convincingly challenge that conclusion. Indeed, invite such a challenge. Because, if I am right, we are in deeper shoot than even the most cynical imagine.

    In the meantime, some of my best and favorite students now work for Lilly. If I were Catholic, I would pray for their souls. But I am not.

  6. Justice

    I would guess that they are your favorites because they demonstrate an ethical and moral understanding of issues; based on this a prayer for them to continue on a righteous path would be appropriate. The Birkat Ha-Gomel was the closest I could find as it did not seem to have a particular religious bias towards Jews and its closing congregational line seems to cross all religions ""Amen. He Who has bestowed on you every goodness, may He continue to bestow on you every goodness. Selah." But honestly I am totally out of my depth when discussing religion, it's that agnostic/atheist thing I struggle with.

    PS: I loved the line about the industry having the moral equivalent of a 10 year old; author Peter Singer was on Bill Maher and he made a similar observation about GW Bush only he said Bush had the emotional equivalent of a 13 year old.

  7. Thanks for word, Jim.

    Re: the 10-year-old, this is actually based on developmental psych. models of moral judgment. What is right=not getting caught is preetty much a 10-year-old, often youger. Again, I see this as more an institutional context thing than the individual. I very much doubt that relevant execs, or most of them, funtion on that level with family, friends, church, community, etc. The corporation is its own "moral world."

    Re: my students, one already has a job with Lilly sales and was afrad to read articles about Zyprexa which were just coming out (bbut she did). The other had been there for a while, and it was clear was already getting "trained" into a certain kind of denial.

    But I think getting the best people into industry is part of what can help, if anything can. But it is the current business model--blockbusters, make hay while sun shines, push envelope as far as you can assuming (probably rightly) competition is, desperate in face of drying pipeline and patent expires--that fuels the "regression."

  8. Justice

    I understand your reasoning for the 10 year old moral mentality but as the Rolling Stone Article pointed out not all of the criticism of the Lilly marketing strategy came from outside the company. This goes directly to your point about hiring the best individuals; the problem is defining the best by means other then academic achievement.

  9. Right. There are companies who have taken integrity seriously and made it the _first_ criterion for potential employees.

    Unfortunately, they are not many and none, as far as I know, in pharma.


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