A record-setting $2.3-billion settlement for off-label marketing of Bextra is buried in an earnings statement, and the entire shoddy affair put in the shade by a simultaneous, glittering announcement of a $68-billion acquisition of Wyeth, which will make Pfizer the 4th largest corporation in America.
Big Pharma giant Pfizer has had quite a week keeping its spin doctors on a tightrope looking for ways to turn manure into marmalade trying to balance good news with bad.
Judging from most media accounts of events swirling around the company, the spinners have done an admirable job. And the way it looks from here, it all breaks down into the good, the bad, and the just plain ugly.
First, the good — well, the almost-good.
We always cheer when the black hats get strung up by the white hats — it’s Hollywood’s version of the American Way. A record-setting $2.3-billion settlement with the Justice Department for off-label marketing of its cox-2 painkillers Bextra and Celebrex is sort of like that. It would be better if someone actually got locked up in the hoosegow, or maybe got strung up for real. That would better make up for the thousands of drug-related injuries and alleged deaths.
The settlement follows agreements in principle last October to pay $745 million to settle personal injury lawsuits, $60 million for attorneys general in 33 states, and $89 million to resolve class actions, says a report in the Wall Street Journal — in total almost another $1 billion.
Next, the bad. It wouldn’t have happened without the good. But then, dad always said there’s going to be a flip side, and don’t let it spoil the good. We’re still trying, but sometimes it ain’t easy.
The massive federal settlement was the main factor in Pfizer’s Q4 earnings crashing 90 percent, and dividends slashed in half — not good for the economy, especially these days. Dividends among US companies are being cut at the fastest pace in at least 50 years, according to media reports, many from companies investors have been relying on to provide income during the recession.
Seven companies in the Standard & Poor’s 500 index have decreased their dividends, removing some $12 billion from shareholders’ pockets, and Pfizer is the latest blue-chip to do so. But in the case of Pfizer, it should give pause to investors who insist on betting on criminals.
But much worse, in some respects, is the acquisition of Wyeth Pharmaceuticals, which on the plus side will result in a leaner company, but only at the expense of close to 20,000 jobs, and the closing of at least five factories — that’s what we call the flip side.
Finally, the just plain ugly. On one hand, the media’s endless romance with the corporate ‘big deal’ — ignoring the real issues, the underlying nastiness in American business, and consigning it to the last paragraph, or to everlasting darkness — is just plain ugly.
The media is dazzled by dollars, by gazillionaire CEOs with the kinds of salaries and perks and golden parachutes and jets and helicopters and fabulous corporate getaways that would make Midas blush. One can only wonder what its reliance on advertising revenue has to do with its tender treatment of America’s corporate ghouls.
Meanwhile, corporate America’s increasing cleverness in burying its crimes, its dead, and its wounded in spin doctor trash, is just plain ugly. And here we are really targeting Big Pharma, because no other industry has such a life-or-death throttle-hold on the jugular of Americans, and no industry should be held to a higher standard.
The largest, most staggering settlement in history, $2.3 billion, for what could reasonably be called — albeit non-technically — criminal behavior, was announced in two buried, misleading sentences in a Pfizer earnings report and press release. And the media, in general, has so far ignored it, or at least its ramifications.
Yet the lives, health and welfare of almost everyone in the country is in their hands. And the pharmaceutical industry continues to bite those hands in spite of the obvious fact that those are the very hands that feed it. That is just plain ugly.