Abbott Laboratories Settles

Another day, another settlement, this time,as reported by Reuters:

New York Attorney General Andrew Cuomo said Abbott Laboratories (ABT.N) and French drugmaker Fournier have agreed to pay $22.5 million to settle a multistate lawsuit that accused them of conspiring to block generic forms of their TriCor treatment for triglycerides.

The drugmakers will pay the money to New York, 22 other states and the District of Columbia, Cuomo said in a news release on Thursday. About $4.5 million goes to New York.

The lawsuit, filed in Delaware federal court in March 2008, alleged Abbott and Fournier schemed to block generics when competitors started to develop versions of TriCor, used to treat a type of blood fat that increases the risk of heart disease.

Cuomo said Abbott and Fournier made minor changes to TriCor that provided no clinical benefit, but were meant to prevent pharmacists from dispensing less-expensive generic versions of TriCor.

The states alleged the drugmakers also thwarted generic competition by filing baseless patent-infringement suits against generic drugmakers, thereby securing a monopoly for blockbuster TriCor.

The ongoing march of legal settlements of charges of various kinds of wrongdoing by diverse health care organizations is a reminder of the pervasiveness of bad conduct by such organizations. We have commented repeatedly (see some posts here) such settlements, including the “corporate integrity agreements” now frequently attached to them, seem to have done little to deter bad behavior. Usually, the companies involved only need to pay fines, and no individual who performed, directed or approved unethical or illegal acts will suffer any negative consequences. I submit once again that such fines are viewed merely as costs of doing business by the affected companies, and do not deter future bad behavior.

While each new entry in the ongoing march of settlements merits a few lines in the business media,separately, or in the aggregate these settlements rarely get noticed by health services or health policy research, or receive attention in health policy circles.  Nor do the contrasts between the conduct revealed by such settlements and the rosy public relations of the settling companies attract much attention.  For example, Abbott Laboratories proclaims its “promise,”

We are here for the people we serve in their pursuit of healthy lives. This has been the way of Abbott for more than a century – passionately and thoughtfully translating science into lasting contributions to health.

Our products encircle life, from newborns to aging adults, from nutrition and diagnostics through medical care and pharmaceutical therapy.

Caring is central to the work we do and defines our responsibility to those we serve:

We advance leading-edge science and technologies that hold the potential for significant improvements to health and to the practice of health care.

We value our diversity – that of our products, technologies, markets and people – and believe that diverse perspectives combined with shared goals inspire new ideas and better ways of addressing changing health needs.

We focus on exceptional performance, a hallmark of Abbott people – worldwide – demanding of ourselves and each other because our work impacts people’s lives.

We strive to earn the trust of those we serve by committing to the highest standards of quality, excellence in personal relationships, and behavior characterized by honesty, fairness and integrity.

We sustain success – for our business and the people we serve – by staying true to key tenets upon which our company was founded over a century ago: innovative care and a desire to make a meaningful difference in all that we do.

The promise of our company is in the promise that our work holds for health and life.

The settlement of allegations about a scheme to maintain a monopoly on a profitable drug raise doubts about the company’s committment to “earn the trust of those we serve” through “behavior characterized by honesty, fairness and integrity.”  Whether the disconnect between this settlement and the “Abbott Promise” will affect the stratospheric earnings of Abbott executives (for example, in 2008, the total compensation of Abbott CEO Miles D White was $28,335,494 per the company’s 2009 proxy statement) is a question that could be put to the company’s Board of Directors.  Perhaps our readers at Yale University might want to ask Dr Robert J Alpern, Dean of the Yale  School of Medicine, who just joined the Abbott Board of Directors in 2008 about that.