Billions are rolling into the Justice Department off Big Pharma's fraud settlements. The recent GlaxoSmithKline ($GSK) deal, at $3 billion, broke Pfizer's ($PFE) previous record, and Johnson & Johnson's ($JNJ) impending Risperdal wrap-up is expected to be in third place, close on Pfizer's heels. But, as The New York Times reminds us today, federal prosecutors have so far failed to prosecute more than a handful of company executives for breaking the rules.
It's not been for lack of trying, Associate Attorney General Tony West contends. As difficult as it is for prosecutors to make their case against a company, it's even more difficult to link individuals to their firm's misbehavior.
As one top official told the NYT, top executives are insulated from iffy decision-making down below. Like certain presidents, some pharma officials aim for "plausible deniability," making sure to stay out of the email loop and away from other evidence that would demonstrate their knowledge of wrongdoing.
Officials have been increasingly frustrated as fines and settlements grow, especially because some of the companies are repeat offenders that agreed to behave as a condition of their previous settlements. Justice and HHS officials have thrown around a variety of options for going after individuals, including the Park Doctrine, a.k.a., "responsible corporate officer" approach, which would hold execs accountable for their companies' actions even if there's no evidence of direct involvement.
"Whatever the strategy, West says the government will keep trying. To the extent you do not see many individuals being held accountable, that's not because of a lack of will on the part of the Department of Justice," West told the NYT. "There is a lot of behavior that makes us angry but which is not necessarily illegal. If the evidence is there, we won't hesitate to bring those cases."
- see the NYT article
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