Big Pharma CEOs Rake in $1.57 Billion in Pay


Posted: 05/08/2013 8:19 am | Ethan Rome, Huffingtonpost

For people who were blown away to learn recently that the 11 largest global pharmaceutical companies made an astonishing $711 billion in profits over the last decade, here’s another measure of the industry’s greed: the same companies paid their chief executive officers a combined$1.57 billion in that period. Not bad work if you can get it. They achieved this thanks in part to their systematic exploitation of Medicare and an epidemic of illegal marketing activity.

According to corporate filings analyzed by Health Care for America Now (HCAN), in 2012 the drug companies’ CEOs drew total compensation of $199.2 million, two and a half times the total in 2003. In 2006, the first year of the Medicare prescription drug law, the pay of the CEOs jumped by $58.9 million from the previous year, the largest one-year increase in the decade HCAN reviewed.

Inflated Drug Prices

These huge spikes in pay coincided with eye-popping profits bolstered by a provision the pharmaceutical lobby inserted into the law to prohibit Medicare from using its unparalleled purchasing power to obtain discounts or negotiate prices with drug companies. By prohibiting Medicare to get better drug prices, the federal government is effectively subsidizing the greed of the drug makers and their CEOs. As a result, Americans pay vastly higher prices than people in other countries for identical drugs. This is ludicrous and wasteful. It hurts the government, seniors and middle-class families.

It should not be the official policy of the United States to price-gouge our people and government – a practice that’s especially offensive at a time when some in Washington are talking about cutting Medicare benefits. Simply empowering Medicare to buy drugs under the same bulk purchasing discounts used by state Medicaid programs would save the federal government billions. For example, the Medicare Drug Savings Act, introduced by Sen. Jay Rockefeller (D-WV), would save $141 billion over the next 10 years without reducing Medicare benefits. Similar measures are in President Obama’s budget proposal and the House Democratic budget plan.

Illegal and Improper Conduct on the Rise

The increases in CEO pay and drug company profits also corresponded with a surge in illegal and improper conduct by the industry. From 2003 to 2012, financial penalties paid by drug manufacturers to settle allegations of illegal marketing, price-gouging of government programs and other violations rose by more than 500 percent, according to a report issued by Public Citizen in September 2012.
In 2003, there were only nine settlements with the federal or state governments, amounting to $967 million in penalties. In 2011, federal and state government agencies reached a record 44 settlement agreements with drug makers. And by July 2012, with the year only half over, drug companies had already agreed to pay nearly $6.6 billion as part of 19 settlements with the government. Data on the second half of 2012 have not yet been compiled by Public Citizen.

Here’s the kicker: The most common drug-company violation cited by regulators and law enforcement agencies between 1991 and July 2012 was overcharging government health programs. Really? How much overcharging do they need?

Over the last decade, the drug companies racked up unprecedented penalties for criminal and civil violations. They jacked up prices for seniors and the government. They made excessive profits and gave unconscionable compensation to the CEOs in charge of this all.

End Corporate Tax Giveaways

It is obscene that any lawmakers in Washington — even the most extremist Republicans who hate civilization as we know it — are even talking about cutting benefits for seniors in the midst of what amounts to a drug industry scandal.

We shouldn’t be making any benefit cuts to Medicare, Medicaid, the Affordable Care Act or Social Security. Not now, not ever. Instead, we should make the wealthiest Americans pay their fair share in taxes and eliminate indefensible special-interest tax breaks and subsidies for big corporations like the companies that ship jobs overseas, Big Oil, and a drug industry that has made a science out of ripping off the American people.

* * * * *
HCAN’s analysis of CEO pay focused on 11 companies: Johnson & Johnson, Abbott Laboratories, Pfizer, Novartis, Eli Lilly, Roche, Merck, Bristol-Myers Squibb, Sanofi, GlaxoSmithKline and AstraZeneca. Over the 10-year period, the $1.57 billion in total compensation was split among 27 executives. The top earners in 2012 were Johnson & Johnson’s William Weldon, who took in $29.8 million, and Pfizer’s Ian Read, who received $25.6 million. By comparison, the median household income in the U.S. last year was $50,054, while half of all Medicare beneficiaries had less than $22,500 in annual income.

Click below for details on Big Pharma’s annual CEO compensation expenditures.

http://healthcareforamericanow.org/wp-content/uploads/2013/05/ceo-earnings-table-2013-0507-for-web.pdf 

In April, HCAN compiled data showing that the 11 drug companies
reported$711.4 billion in profits over the same 10-year span.

 

Link patented drug prices to per capita income: Panel #patientrights


SEEKING AFFORDABILITY

Ag overnment panel has proposed that prices of patented medicines be based on the country’s per capi ta income, a move that would substantially reduce prices of costly drugs made by global pharmaceutical firms. 

The proposal, which seeks the input of other government agencies as well as industry groups, could provoke the ire of Big Pharma, which has clashed with India over protec tion of intellectual property price regulations for generic drugs, and compulsory licens es for costly medicines.
A panel formed under the ministry of chemicals and fertilizers has recommended setting up a committee to negotiate with drugmakers to fix prices of costly drugs used to treat deadly diseases such as cancer, HIV and hepatitis.
The proposal is the latest in a series of measures taken by India to make medicines more affordable for the coun try’s 1.2 billion population.
“If we compare the per capita income with the prices of patented medicines in countries like Australia or France, prices in India are compara tively high and hence, they need to be regulated,” a senior ministry official told Reuters, declining to be identified because he was not authorized to speak with media.
Generic medicines account for more than 90% of India’s $13 billion pharmaceuticals market. US-based Abbott Laboratories has the largest share of the overall Indian drug market followed by Cipla.
The proposal, posted late on Monday on the ministry website, cites as an example the lung-cancer drug erlotinib HCL, sold by Roche Holding as Tarceva. In India, it costs Rs 35,450 for a month’s course of 100 mg tablets, equivalent to Rs 1,21,085 in France and Rs 1,21,650 in Australia.
Based on per capita gross national incomes, if the drug costs Rs 35,450 in India, its respective cost would be just Rs 11,643 in France and Rs 10,309 in Australia based on per capita income in the respective countries, the report said.
The Organization of Pharmaceutical Producers of India, which represents for eign drugmakers in India, did not reply to questions from Reuters.
“If stringent price regula tions are enforced then latest drugs will not be made availa ble in India,” said Ameet Hariani, managing partner at Hariani & Co, a Mumbaibased law firm that advises drugmakers and other companies. REUTERS

 

 

#India- #Abbott suspends giving gifts to doctors #goodnews #medicalethics


 

 

 

 

By Frederik Joelving

 

NEW YORK | Tue Oct 16, 2012 6:03pm EDT

 

(Reuters Health) – Abbott Laboratories Inc has instructed its sales representatives in India not to give gifts to doctors, who are prohibited by local law from accepting them, a practice that has been used as a bargaining chip by companies wanting a piece of the country’s burgeoning healthcare market.

 

According to an internal email dated October 11 from Sudarshan Jain, managing director of Abbott Healthcare Pvt. Ltd, the gift-giving has been temporarily suspended.

 

“Only Abbott-approved clinical/scientific literature may be distributed to current and potential customers,” said the email, which was reviewed by Reuters on Tuesday. “No brand reminders or therapy reminders in your possession should be given to any current and potential customer and no further brand reminders or therapy reminders should be ordered.”

 

Accepting gifts or travel arrangements from drugmakers is against the law in India, but enforcement is inconsistent.

 

Public health experts say gift-giving leads to dangerous overprescribing and unnecessary use of expensive medications when cheaper versions are available. That can be a significant burden for the 400 million people in India who live on less than $1.25 a day.

 

A sales representative with Abbott Healthcare told Reuters that therapy reminders are low-value items such as pens, whereas brand reminders refer to electrical appliances and other pricier merchandise.

 

The representative, who spoke on condition of anonymity, said he was not worried about his job getting harder without the gifts, but, he quipped, it would certainly make his bag lighter.

 

As multinational drug companies ramp up investments in emerging markets to realize billions of dollars in annual sales, they have faced increased scrutiny from the United States and European governments. U.S. authorities are currently probing a number of leading global drugmakers for kickbacks and bribery overseas.

 

A Reuters investigation in September showed Abbott’s Indian subsidiaries plied doctors with scanners, vacuum cleaners, coffee makers and similar items in return for prescribing the company’s drugs to patients. Sales representatives were shown lists of gifts in strategy guides issued by the company.

 

In August, Pfizer Inc paid $60.2 million to settle a U.S. probe involving illegal payments to win business overseas, including kickbacks such as cellphones and tea sets given to doctors in China. Last year, Johnson & Johnson agreed to pay $70 million to settle U.S. charges under the Foreign Corrupt Practices Act (FCPA) that it had bribed healthcare providers in Greece, Poland and Romania.

 

Scott Davies, a spokesman for Chicago-based Abbott Labs, confirmed the decision but declined to say what had prompted the move. He said he was not aware of any inquiries from regulators about the company’s dealings in India.

 

“This is an internal action,” he told Reuters. “We are suspending that brand reminder program while we review it.”

 

Davies said the suspension encompasses Abbott Healthcare and Abbott True Care, but did not have information on whether other Indian subsidiaries would continue the practice. He declined to address travel payments.

 

(Editing by Ivan Oransky, Michele Gershberg, Maureen Bavdek and Claudia Parsons)

 

 

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