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Comment by johndhi | Hacker News Reader

I actually used to work for them as a lawyer, indirectly. My view is likely a bit skewed in the other direction, but to me this is mostly evidence of how expensive and impossible it is to do business in healthcare in the United States.

How are the laws and regs so unclear that a huge corporation of smart people can't avoid big fines? Part of it is a question of Pfizer's investment in compliance - which I assure you is massive - but also it's a lack of clarity and shifting goal posts.

False claims act litigation, for example, is responsible for the second largest settlement listed on this site (phen fen is #1), a notorious and utterly incomprehensible regime where all of the big money settlements relate to aggressive fringe theories asserted by DOJ.

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> False claims act litigation, for example, is responsible for the second largest settlement listed on this site (phen fen is #1), a notorious and utterly incomprehensible regime where all of the big money settlements relate to aggressive fringe theories asserted by DOJ.

Well. I looked the case up.

Here is how i am understanding it: Pfizer wanted a drug to be approved for a specific use. The FDA rejected it as too risky, approved it for other uses. Pfizer nevertheless was pushing the drug for this unaproved, off-label use. The drug later proved to be dangerous in this off-label use and were whitdrawn from the market.

Am I reading this wrong? What part of this is controversial?

If you ask for permission for something, then been told no you do it anyway and in that process people suffer harm what should happen then?

Off label litigation is a great example of my point. Extremely muddy waters.

Physicians constantly ask pharma about and explore off label drug prescriptions. This is legal: psychiatrist can tell you to take a drug approved for nerve pain for depression. There is research showing it works for depression but it has not technically been added to the label of the drug yet following fda approval. Pharma can provide the studies and answer limited questions on the topic (but no clear guidance) but cannot "promote" this. Is presenting the research promotion? Is the rep discussing it with the doctor promotion? Etc

Just to add how difficult these off-label uses are beeing managed. Every content we provide (be it in a discussion, or a comment in one if our forums or as part of a symposia) needs to be checked for offlabel use. This is a nightmare and every single screen of my apps or of the content that is uploaded needs to be reviewed by medical teams/compliance. Its a nightmare.

Now tell me what is “was promoted by pfizer”? A doctor saying it in a comment/presentation that he tried this with on patient and storing this on one of our digital platforms? It’s really grey water…

And add to this hard times for medical reps after covid.

> Physicians constantly ask pharma about and explore off label drug prescriptions.

Yes, and in other companies employees go through training when dealing these things to avoid any type of off label advertisement. It’s not “muddy” it’s like claiming lawyers think DUI is muddies waters because there is just so many things to consider. No one in their right mind in the industry would ever think that. And while the terminology is perhaps foreign to people not in the industry, everyone understands that you can’t just go out claiming that paracetamol cures cancer, no mater how good a business case you’ve made for additional sales.

> Pharma can provide the studies and answer limited questions on the topic

Sure and then get fined for off label marketing. The lines aren’t difficult to understand and they are way harsher than you seem to think. Something as behneighen as a rep liking a Facebook post covering a university article saying “paracetamol shows promise as cancer cure” is overstepping the line because the like can be interpreted as off label marketing.

> I actually used to work for them as a lawyer, indirectly.

I was a small-time expert witness (on the plaintiff's side) against them in a very small lawsuit. It was the first and last time I served in that capacity.

A child was born with horrific birth defects. Parents claimed that a specific medication caused it. Pfizer obviously said otherwise.

The whole thing left me feeling dirty. Experts charging $600 / hour (this was over a decade ago, so God knows what they charge now) to say, with diamond-hard confidence, whatever their side wanted them to say.

Plaintiff's experts: "That drug _definitely_ caused the birth defects."

Defense experts: "There is no possible way that drug could cause birth defects."

Basically, here was a tragedy, and we all feasted on it. One of the other experts told me I could be "good at this" (selling myself out as an expert), but it just left me feeling dirty.

A woman once told me that she made $300K/year as an "expert witness", on various topics. She was smart and she said she would study a bit and go testify. It blew my mind. I didn't understand whether she was working for the mafia, or if this was legal, or what. I said something like, "but, wait, you're not an expert. The court allows this?" She didn't understand my problem. She seemed entitled; despite her IQ she may not have understood what an actual expert was. I never got to the bottom of it and lost track of her.

The court does not want a deep guru on every topic. It effectively wants a bridge between a specialized domain and the court itself (which is made of lay people.)

I would expect an Expert to study on the particulars of a case. In general as long as they are sufficiently narrow I don't see a problem here.

I'd rather expect someone as a court-appointed expert that they have relevant, certified experience. In Germany, while judges are legally free to appoint whoever they want as experts unless there exist specially certified experts for the class of assessment[1], the parties involved usually present actual experts to the judge for selection - and the opposing side would challenge the selection of non-qualified experts.

[1] https://www.gesetze-im-internet.de/stpo/__73.html

a reason for having specialized courts in specific domains of law instead of laymans in the 18th century enlightenment inspired (outdated) system we have. Also checks and balances on judges, one of the most unaccountable caste there is

If someone says they are an expert at nuclear engineering, I expect they can build a working reactor in their basement, not that they have read a pamphlet and might know the difference between fission and fusion.

Your critera excludes most of the NRC.

The court does not need to build a nuclear reactor. They need someone who can help the court understand nuclear.

Your theoretical person may be a bad choice if they have no communication skills.

They certainly are a bad choice if they are not actually an expert though

Let's be honest here: both sides of the case want "their" expert to testify. I.e., someone who has enough knowledge on the topic to push the given narrative convincingly. There is a massive difference between a court case and actual science.

> she may not have understood what an actual expert was.

There is a legal "standard" around the admissibility of expert testimony (https://en.wikipedia.org/wiki/Daubert_standard).

The person who got me to testify told me he made around $700 K per year. He drove a ~$200K Maybach so I had no reason to doubt him.

I also met a plaintiff's lawyer who told me, roughly, "If the lawsuit ever sees a jury, the jury never understands the science. It's all about likeability and looking good. I had a juror tell me, 'I picked your side because you had a really nice tie.' So, I always wear a nice tie!"

That was probably a hyperbolic story, but I'm sure there's a lot of truth to it, too.

Here are John Carmack and Tim Sweeney's takes on expert witnesses: https://mobile.twitter.com/id_aa_carmack/status/827187311452...

Yeah. This, and also the original post (the entire legal system) is based on this adversary system of incentives to demand you did nothing wrong and fight your opponent. It makes it hard to tell what's true.

What was the outcome? I hope the parents won

> What was the outcome?

My understanding is that it was messy. The parents/kid got some money. Maybe $1 - 1.5 million?? But my memory is hazy on that. Obviously, their parents' lawyer took some percentage of that.

I'm pretty sure the (parents') lawyer who hired me took on other plaintiff's lawyers as "investors" (I forget the proper term for what he did). Basically, he didn't have enough money to pay for everything up front [like expert witnesses], so he sold fractional "ownership" in his future earnings on the case in exchange for funds. This was a part of the business that I did not know existed prior to my testimony.

My suspicion is that he took away very little after the rest of us got paid (family, support staff, "investors", etc.).

My deposition was probably pretty typical, but it was shocking to me.

- The defense lawyers flew out to me and rented a conference room at a local law office.

- At around 9AM, the main defense lawyer sat across a table from me and pulled out stack after stack of documents and I thought, "Wow, she brought a lot of extra reading for herself. I should be done here by around 11 and I can go home and mow the lawn."

- NOPE! Every stack of documents was there to rebut some specific sentence that I wrote in my initial report.

- There were a lot of insults and efforts to get under my skin. For example, after I used some technical term, she said, "That's a big word. Do you really know what it means?"

- The only reason the deposition stopped was because she had to catch a flight back to the west coast around 5 PM.

- The kicker was that "MY" lawyer asked if I'd be willing to give them BOTH (plaintiff AND defense) a ride to the airport (defense lawyer said she'd pay me my rate for the ride).

- I told them I had to get home, but really I took the whole thing too personally because I thought, "You just insulted me for six-and-a-half hours? Now you want me to drive you to the airport? I'll pass."

- And then the lawyers took a taxi together like they were old friends.

Obviously, it's just business for them, but I'm not built for that.

Sounds like something out of Better Call Saul

That was interesting, thanks for sharing.

Pffffft. Explain why Pfizer keeps making epic regulatory faceplants when much smaller organizations, ostensibly with less industry experience, routinely manage to navigate regulations in the US without issue?

A behemoth like Pfizer is a more attractive target for enforcement agencies?

Nah. Regulators have performance metrics same as everyone. They'll gleefully target 150 headcount biotech firms in a heartbeat if they think there's a win to be had and smaller firms generally dont have the legal war chest required to fight a complianceviolation beef. See Also: OIG going after United Therapeutics on light pretext.

Pfizer has more "surface area" but beyond that, no. Prosecutors love shooting fish in a barrel: it actually makes smaller biotech firms more attractive regulation targets.

Disagree. Every civil prosecutor I've ever worked with wants a big "story." They are driven by headlines. Taking down local mom's pharmaco is the opposite of the narrative people want to read in the paper.

We like the headline of this article: megacorp pfizer is evil. That's why we're in this thread, right?

You may disagree but the history of the Office of Inspector General crapping on sub-200 headcount biotech and pharma startups doesn't mesh with any of that. Keep in mind smaller firms don't put up anywhere near the fight a multinational like Pfizer is capable of, and the OIG knows this.

We are told the opposite fairy tale when it comes to the IRS.

"They have to go after regular people and small business owners because corporations have too many lawyers!"

Interesting, who makes that argument?

I can find someone making that case with a quick Google: https://www.april15th.com/irs-problems/why-irs-audits-more-s...

> The IRS brings in more dollars per hour auditing small mom and pop businesses, than they do auditing medium and large companies.

> Why is that the case? Because the larger companies keep impeccable records and have tax experts to defend them; Enrolled Agents, CPAs, or tax attorneys that usually know more about the Tax Code than the IRS auditor-employee.

I've found it in my conversations with people justifying the recent increases in IRS agents and the new $600 reporting requirement.

Reading that link, it appears they are saying the IRS is concentrates its efforts on small businesses because they have the best chance of recovery.

You called it a fairy tale, do you believe that big corporations are actually bigger tax cheats than small businesses, and they're just getting away with it somehow?

I do not have any of direct evidence of anything, I'm just a guy with a brain. This is one of many in a long series of "coincidences" that when put together starts to become nonsensical.

Look at where we started.

Pfizer gets fined more beacuse they are a bigger company and have more surface area, the law is complex and everyone is breaking it all the time so action against them doesn't mean they did anything wrong. In and of itself fine, that may be true.

Then those same people will later say, the IRS went after that Mexican restaurant instead of Pfizer beacuse they are so big, and run such a tight ship that it would almost impossible to find any wrong doing.

The tax code is very complex, so is drug regulation. Is the idea that Pfizer is hyper competent in tax law but incompetent when it comes to the core business? That doesn't hold water for me.

Maybe you're right, but I think it's more likely that Pfizer, as a business, is more willing to accept risk in the pursuit of its core business aims than in its accounting, and that's all we're seeing. https://slatestarcodex.com/2019/01/14/too-many-people-dare-c...

It could also be that the endeavor of drug discovery and manufacture is inherently more risky than accounting. From the academic sense, it is not a field of mathematical certainty, but one of subjective risk-benefit tradeoffs.

In Canada it’s a common argument as to why the CRA goes after waitresses for unclaimed tips and similar trivial cases, versus tackling high-net worth and corporate tax evasion/fraud. It comes down to dollars recovered per agent hour as a metric for the government. The average joe can’t afford to tie up the CRA in court for years with high-paid legal teams, which means that their KPI results are negatively correlated with the financial resources of their target. Why spend years potentially recovering millions when you can spend minutes recovering hundreds or thousands with virtually no risk?

That's what I'm told, but not by the IRS. It is a fairy tale, though. Small businesses cheat on their taxes in incredibly stupid and simple ways. e.g. running personal expenses through the business is absolutely rampant. I even know a guy who got a tax deduction buying a $60K engagement ring this way. This stuff is extremely easy to catch in an audit, and requires very little resources from the IRS. These business owners will always settle quickly and never fight, because they are guilty as hell and it's easy to prove.

At big corps, on the other hand, this type of activity is heavily policed and almost impossible. The idea that large corporations are rampant tax cheats is completely false. The reason that they would never dare is because the IRS has a whistleblower program where you get to keep a percentage of the proceeds, which at a big corp will be multiple millions of dollars. So any intentional tax cheating will be reported and caught immediately by employees who stand to gain more than their salary for their whole career.

The worst that a big corp will ever do is dip a toe into the legal gray areas of tax law. And in that case the IRS will be hesitant to go after them because it takes a ton of resources, and they stand a very high chance of losing. Not because the big corp has too many lawyers, but because the opposition has a legit case, unlike the small business owner who bought his engagement ring on the company card. The idea that anyone has too many lawyers for the government to handle is ridiculous anyway.

So it makes complete sense for the IRS to target small businesses and regular people and not big corps. But people don't like this because it goes against the "big corp bad, small business good" religious belief.

Also offshore accounting.

> The idea that large corporations are rampant tax cheats is completely false.

And yet, large corporations, especially banks, are continuously caught with blatant abuse of the tax code (e.g. the "cum ex" scandal in Germany, where banks outright looted the government) or their customers.

The problem is that the fines are way too low. What does a large corporation care about a fine of even a billion dollars? Spread out over the time of the violation, that's petty cash, and as long as the execs don't have to go to jail, D&O insurance will pay any personal punishments.

Cum ex was a loophole. Which is exactly my point. Large corps don't just openly break the law, they exploit loopholes and gray areas.

When you control for population, high income individuals are more likely to be audited than the middle class:

https://www.irs.gov/about-irs/irs-audit-rates-significantly-...

There is no article about it, but the same also holds for businesses. There are just soooo many more small to middle sized businesses compared to large corporations.

Because Pfizer is a bigger target?

Kind of like 3 Felonies a Day, lots of times the laws/regulations are so labyrinthine that if they look at you closely, they will find something.

Because you make example of big player, not small one.

But the opposite is claimed with respect to IRS audits. With that we are told the IRS goes after and fines the little guy because the rich can spend money for defense.

Shouldn't we expect to see similar behaviors across regulators?

There are very different incentives for different regulators who operate with different bodies of law and degrees of compliance.

I'll join the sibling comments in speculation: They're so big that they can either get away with it in aggregate or when they can't, can count on favorable judgements, like the comment about J&J. Favorable in the sense that the individuals personally responsible won't face the ramifications.

Nailed it in one. I'm old enough to vividly remember the first time Pfizer the corporations-are-people business entity was convicted of a felony. In the decades since not only have they failed to substantially alter their approach to compliance issues, most of the largest industry players have followed suit since the profit/loss ratio for ignoring regulations has been shown by Pfizer's financials.

> How are the laws and regs so unclear that a huge corporation of smart people can't avoid big fines

Perhaps they don't really care to? Apparently paying penalties is just a part of the business model, net profits/savings made thanks to the violations still exceeding net fines.

I'm not sure about Pfizer but I feel almost sure this is the way Google and other big tech corporations providing "free" services work paying huge fines for privacy violations every now and then. Google will still spies on you and records everything it can about you no matter how much do you tweak your settings and how hard does the EU try to protect your privacy rights, doesn't it?

I can't speak to medical specifically, but in one of the spaces I used to work the thinking was "The law is ambiguous because it's reactive; we're so far out on the bleeding edge that nobody actually knows what's legal until someone tries it and someone else makes a case of it. So pushing the envelope is a net positive for society because we end up blazing a trail of bright-line precedent rulings that other companies can follow. You can tell the pioneers because they're the ones with the arrows in their backs."

A bit self-serving but there's some meat on the bones of that logic; the real meaning of the law is path-dependent and determined by the rulings, not the words on the paper.

In fairness there's Noone you can call up in the government to ask for certain if something is legal or not past a certain point. Only a judge can decide that, and they don't do hypothetical cases.

It's also worth noting that the parent claim of unclear compliance guidelines is less of a statement of fact and more a commentary on your average pharma industry lawyer. There are more suites of standardized compliance applications than you could shake a stick at, that's not at issue. The problems usually start with a department of contract lawyers who can't be assed to skill up on industry specifics. Throw in a CFO with little or no experience managing CRO's and you've got the perfect recipe to get dumped on by the OIG.

> How are the laws and regs so unclear that a huge corporation of smart people can't avoid big fines?

They aren't. What is clear is that a huge corporation of smart people simply don't care about fines.

The answer is to make the fines much bigger, big enough that a single one would threaten the existence of Pfizer.

This is silly, there should be a middle ground. A 1 strike policy would just stifle any innovation coming out of a company.

Yeah, I wouldn't advocate a 1 strike policy. Fines should escalate with repeated violations.

The fines should be tied to revenue and after some violations they should reach the point where the business cannot continue.

Based on what research is this a good idea?

The US system is unique and we're entrenched. This is too big a change.

This is rediculous. J&J knowingly sold talcum powder laced with asbestos. They have known about it for over 50 years. This company is basically evil and as they cannot fight the facts they use trickery to absolve liability.

https://www.reuters.com/investigates/special-report/johnsona...

You should be ashamed of yourself.

I didn't go through all of the False Claims litigation, but the penalties were related to pricing, nothing to do with their science.

How are the laws and regs so unclear that a huge corporation of smart people can't avoid big fines?

Without having any knowledge of said people and laws, I would say that some of those smart people are making decisions to help their personal bottom line while putting the company at risk. Anyone working at a large company sees this all the time.

I work in health care for a health care start. Literally my co-workers and I were just talking about this. How it's all such a racket and way too expensive and complicated.

How do we get out of this hole? How do we fix health care and fix these issues?

Pfizer gets plenty of fines outside the United States too.

> How are the laws and regs so unclear that a huge corporation of smart people can't avoid big fines?

Unless these big fines are because such corporation has been really, really bad...

Pfizer product issues:

During the mid-1980s, watchdog organizations such as the Public Citizen Health Research Group charged that Pfizer’s widely prescribed arthritis drug Feldene created a high risk of gastrointestinal bleeding among the elderly, but the federal government, despite reports of scores of fatalities, declined to put restrictions on the medication. A June 1986 article in The Progressive about Feldene was headlined DEATH BY PRESCRIPTION.

The Food and Drug Administration expressed greater concern about reports of dozens of fatalities linked to heart valves made by Pfizer’s Shiley division. In 1986, as the death toll reached 125, Pfizer ended production of all models of the valves. Yet by that point they were implanted in tens of thousands of people, who worried that the devices could fracture and fail at any moment.

In 1991 an FDA task force charged that Shiley had withheld information about safety problems from regulators in order to get initial approval for its valves and that the company continued to keep the FDA in the dark. A November 7, 1991 investigation in the Wall Street Journal asserted that Shiley had been deliberately falsifying manufacturing records relating to valve fractures.

Faced with this growing scandal, Pfizer announced that it would spend up to $205 million to settle the tens of thousands of valve lawsuits that had been filed against it. Even so, Pfizer resisted complying with an FDA order that it notify patients of new findings that there was a greater risk of fatal fractures in those who had the valve installed before the age of 50. In 1994 the company agreed to pay $10.75 million to settle Justice Department charges that it lied to regulators in seeking approval for the valves; it also agreed to pay $9 million to monitor valve patients at Veterans Administration hospitals or pay for removal of the device.

In 2004 Pfizer announced that it had reached a $60 million settlement of a class-action suit brought by users of Rezulin, a diabetes medication developed by Warner-Lambert, which had withdrawn it from the market shortly before the company was acquired by Pfizer in 2000. The withdrawal came after scores of patients died from acute liver failure said to be caused by the drug.

In 2004, in the wake of revelations about dangerous side effects of Merck’s painkiller Vioxx, Pfizer agreed to suspend television advertising for a related medication called Celebrex. The following year, Pfizer admitted that a 1999 clinical trial found that elderly patients taking Celebrex had a greatly elevated risk of heart problems.

In 2005 Pfizer withdrew another painkiller, Bextra, from the market after the FDA mandated a “black box” warning about the cardiovascular and gastrointestinal risks of the medication. In 2008 Pfizer announced that it was setting aside $894 million to settle the lawsuits that had been filed in connection with Bextra and Celebrex.

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