Is it true that drug companies have a worse record of law-breaking than any other industry? This month we review a criminologist’s investigation revealing bribery, smuggling and international law evasion - and also a campaigner’s manual on how to combat drug company crimes.
Editor: Anuradha Vittachi
Caught in the act
Corporate Crime in the Pharmaceutical Industry
by John Braithwaite
Routledge & Kegan Paul (hbk) £25
Evidence of widespread drug marketing abuse - particularly in the Third World - is all too familiar. But when a criminologist sets out to investigate institutionalised white-collar crime in the drug industry, the perspective is new and his revelations startling.
In Corporate Crime in the Pharmaceutical Industry, John Braithwaite argues that the drug industry has a ‘worse record of international bribery and corruption than any other industry, a history of fraud in the safety testing of drugs, and a disturbing record of criminal negligence in the usage of drugs’. Amongst the evidence he has painstakingly amassed, Braithwaite cites a study of corporate crime in the USA which found that the drug companies had more than three times as many serious or moderately serious law violations per firm as other industries.
Braithwaite confronts his subject head on. As he points out, no one expects a criminologist to give a ‘balanced’ account of mugging or murder. But ‘balance’ is expected when corporate criminals are under investigation. Opening a chapter on ‘The corporation as pusher’, he exposes a double standard: ‘People who foster dependence on illicit drugs such as heroin
are regarded as among the most unscrupulous pariahs of modem civilisation. In contrast, pushers of licit drugs tend to be viewed as altruistically motivated purveyors of a social good.’ Yet, dependence on some psychotrophic drugs (i.e. drugs capable of affecting mental activity, like Valium) marketed by these companies can have consequences just as frightening as heroin addiction.
In scrutinising drug companies’ activities in the Third World, Braithwaite is scrupulously fair in emphasising that the transnationals tend to operate to higher standards than many local commercial producers. But he concludes that ‘the moral failure of the transnationals lies in their willingness to settle for much lower standards abroad than at home.
Campaigners expecting new evidence may be disappointed by the chapter on ‘Drug Companies and the Third World’. But for newcomers to the subject it provides a comprehensive review of earlier studies by Silverman, Yudkin, Medawar, Muller and others.
But the particular stength is that it delves into the corporate mind. In an appendix that is essential reading for consumer activists, Braithwaite explains the tactics used to arrange interviews with 31 drug industry executives in the USA, UK, Australia, Mexico and Guatemala. As a result, the book contains fascinating insights into the reality behind the monolithic image of the corporation: often there may be fierce
internal conflict - between, for example, medical and marketing people.
An important thesis of the book is that transnational corporations deal with legal constraints more through international law evasion strategies than outright legal violations. In most Third World countries such laws as do exist aren’t enforced anyway. An industry executive in Guatemala described the drug registration situation as ‘practical anarchy’.
The final chapter, ‘Strategies for controlling crime’, addresses the most complex and thorny issues of how to make national and international controls enforceable and affordable. Predictably, it fails to come up with a blue-print of what should be done. But it explores the different options that are open: sanctions, binding legislation, self-regulation and their shortcomings.
The obstacles are huge. Rule-breaking is habitual, as described by one managing director: ‘I don’t follow the corporate rules when it doesn’t suit me. No one does. That is, if you’re credible you can get away with it. We’re credible because we perform well. If we were running at a loss, I’d be fired for breaking the rules. But because we’re doing well, it’s a good management decision.’ When it comes to opposing controls from outside, opposition can be formidable. The book cites evidence of the organised industry lobby with influence over health regulatory authorities and amongst politicians.
One conclusion of the study will be particularly welcome to Health Action International (the network of health activists and public interest groups in developing countries, campaigning for an end to double standards Braithwaite states that, to stop global corporations playing off the regulatory standards of one country against those of another, standards must be harmonised. That is, strategic government action is needed to change lowest-common-denominator regulation into highest-common-denominator controls.
This makes the role of networking and exchange of information between health authorities and campaigners in developing and developed countries vital to stamp out corporate crime.
Dianna Meirose is the author of Bitter Pills reviewed in NI 121.
Action against drug abuse
Prescription for Change
by Virginia Beardshaw
HAI/IOCU (pbk) £5.00
Available from Oxfam Campaigns Unit, 274 Banbury Rd, Oxford, UK.
The relationship between health and the medical supply industry is especially important in that it reflects the power wielded by private enterprise when it interacts with the public at large: with public industry, national authorities, health care services and individual consumers.
It seems that this power is misused. For this reason, the international pharmaceutical industry has recently become the target of campaigns by various critics. In the UK, for example, War on Want and OXFAM support a number of local groups which publicise examples of corporate malpractice and support rational health initiatives at home and in less developed countries. Prescription for Change is written for such groups.
Virginia Beardshaw writes on behalf of two well-known international bodies, Health Action International (HAI) and the International Organisation of Consumer Unions (IOCU). Her main concern is with reforming the existing system of drug supply and usage. ‘This guide,’ she says, is more about influencing policy makers than about academically correct research methods, since action is the key to progress.’
Since, unfortunately, many activists do not have much spare time, Beardshaw describes the key issues and principles for action in nine short chapters covering no more than 50 pages. These are packed with well-referenced summaries of the criticisms which are levelled against the large drug companies, together with helpful hints on how to campaign for more appropriate use of drugs. Many of the suggestions appear at first to be rather commonplace, but could easily be overlooked by groups that are inexperienced or less than fully alert. In any event, they form a convenient aidememoire, whilst the book as a whole is a useful introduction to the issue.
A couple of reservations: firstly, I would have liked more information about how some of the early campaigns fared. There are some references to Ciba-Geigy’s marketing of clioquinol, and the associated SMON scandal, but we are told little about the response of the company to its critics and nothing about its eventual decision to withdraw the drug. Similarly, there is little about how Searle reacted to the Social Audit campaign against the promotion of Lomotil.
Secondly, this is yet one more book which portrays malevolent drug companies linked up against a range of united and socially concerned consumers, medical professionals and government officials. I am convinced that this is an over-simplification, since some members at least of each of these groups may also have an interest in supporting the status quo.
That said, this book is a timely and useful tool for the many groups and individuals working for an appropriate use of drugs.