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ISBN: 0710200498

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Corporate Crime in the Pharmaceutical Industry

by Dr John Braithwaite

The sordid behaviour of today's pharmaceutical corporations has been further demonstrated by Dr John Braithwaite, now a Trade Practices Commissioner, in his devastating exposé, CORPORATE CRIME IN THE PHARMACEUTICAL INDUSTRY (1984).

International bribery and corruption, fraud in the testing of drugs, criminal negligence in the unsafe manufacture of drugs - the pharmaceutical industry has a worse record of law-breaking than any other industry. Describing many examples of corporate crime, which shows the depth and seriousness of the crime problem in the pharmaceutical industry, Dr Braithwaite's revealing study is based on extensive international research, including interviews of 131 senior executives of pharmaceutical companies in the United States, the United Kingdom, Australia, Mexico and Guatemala.

The book shows how pharmaceutical multinationals defy the intent of laws regulating safety of drugs by bribery, false advertising, fraud in the safety testing of drugs, unsafe manufacturing processes, smuggling and international law evasion strategies. At the time of researching the subject, Braithwaite was a Research Criminologist at the Australian Institute of Criminology and a Fulbright Fellow affiliated to the University of California, Irvine and the United Nations Center on Transnational Corporations.

"Data fabrication is so widespread", says Dr Braithwaite, "that it is called 'making' in the Japanese pharmaceutical industry, 'graphiting' or 'dry labelling' in the United States." He further states:

"Pharmaceutical companies face great temptations to mislead health authorities about the safety of their products. It is a make or break industry - many companies get virtually all their profits from just two or three therapeutic winners. Most of the data that the Australian Drug Evaluation Committee relies upon in deciding questions of safety and efficacy is data from other countries, particularly the US. Inquiries into scientific fraud in the US have shown there is a substantial problem of fraud in safety testing of drugs in the US, just as has been documented in Japan."

The book reports that between 1977 and 1980 the United States Food and Drug Administration have discovered 62 doctors who had submitted manipulated or downright falsified clinical data. A study conducted by the FDA has revealed that one in five doctors investigated, who carry out field research of new drugs, had invented the data they sent to the drug companies, and pocketed the fees. Citing case examples, Dr Braithwaite states: "The problem is that most fraud in clinical trials is unlikely to even be detected. Most cases which do come to public attention only do so because of extraordinary carelessness by the criminal physician..."

According to Dr Judith Jones, Director of the Division of Drug Experience at the FDA, if the data obtained by a clinician proves unsatisfactory towards the drug being investigated, it is quite in order for the company to continue trials elsewhere until satisfactory results and testimonials are achieved. Unfavourable results are very rarely published and clinicians are pressured into keeping quiet about such data.

It is very easy for the drug company to arrange appropriate clinical trials by approaching a sympathetic clinician to produce the desired results that would assist the intended application of the drug. The incentive for clinical investigators to fabricate data is enormous. As much as $1000 per subject is paid by American companies, which enables some doctors to earn up to $1 million a year from drug research, and investigating clinicians know all too well that if they don't produce the desired data, the loss of future work is inevitable.