Consumer Health Digest #12-23
Your Weekly Update of News and Reviews
July 5, 2012
Consumer Health Digest is a free weekly e-mail newsletter edited by Stephen Barrett, M.D., with help from William M. London, Ed.D., M.P.H. It summarizes scientific reports; legislative developments; enforcement actions; news reports; Web site evaluations; recommended and nonrecommended books; and other information relevant to consumer protection and consumer decision-making.
Drug company fined $3 billion for marketing violations. GlaxoSmithKline LLC (GSK) has agreed to plead guilty and to pay $3 billion to resolve liabilities arising from (a) the company's unlawful promotion of certain prescription drugs for uses not approved by the FDA, (b) its failure to report certain safety data, and (c) its civil liability for alleged false price reporting practices. [GlaxoSmithKline to plead guilty and pay $3 billion to resolve fraud allegations and failure to report safety data. US Department of Justice news release, July 2, 2012] The resolution is the largest health care fraud settlement in U.S. history and the largest payment ever by a drug company. GSK agreed to plead guilty to two counts of introducing misbranded drugs (Paxil and Wellbutrin) into interstate commerce and one count of failing to report safety data about the drug Avandia to the FDA). Under the the plea agreement, GSK will pay a criminal fine of $956,814,400 and forfeiture of $43,185,600. The company will also pay $2 billion to resolve its civil liabilities with the federal government under the False Claims Act, as well as the states. The civil settlement resolves claims relating to Paxil, Wellbutrin, Avandia, and several other drugs, and also resolves pricing fraud allegations and alleged kickbacks to physicians who prescribed the drugs. The Associated Press has reported that the improper marketing to doctors included expensive resort vacations, European hunting trips, high-paid speaking tours, and even tickets to a Madonna concert. Holland J. [GlaxoSmithKline to pay 3 billion for health fraud. Bloomberg/Business Week News, July 2, 2012]
Standards proposed for voluntary health and social care registries. The Council for Healthcare Regulatory Excellence (CHRE) has asked for comments on its proposed plan to accredit organizations that register people working in a variety of health and social care occupations. The Council expects to launch its accreditation program in November 2012, at which time it will be renamed the Professional Standards Authority for Health and Social Care. Qualifying registries will be listed on the Authority's Web site and be permitted to display its "quality mark" on their literature and Web sites. The organizations that maintain voluntary registers include many well-respected ancillary medical professions such as cardiothoracic surgical assistants, genetic nurses and counselors, and anesthesia assistants. But the prospective applicants also include organizations that register unscientific practitioners such as homeopaths, acupuncturists, osteomyologists, anthroposophists, naturopaths, reiki practitioners, crystal healers, reflexologists, aromatherapists, Bowen therapists, and ear candlers. Although the CHRE states that accreditation "will not be an endorsement of the therapeutic validity or effectiveness of any particular discipline or treatment," it is clear that the general public will see it as an endorsement. The Nightingale Collaboration believes that if the CHRE is to genuinely protect the consumer, it must give short shrift to nonsensical practices and must have robust standards in place to rule out the possibility of "alternative" therapies being given undeserved credibility. [We need your help! The Nightingale Collaboration Web site, June 14, 2012] Comments on the proposed standards will close on July 10. Comments can be made online by completing a brief survey. The key point to make is that CHRE should not accredit any organization that registers practitioners who emphasize health care based on biologically implausible rationales.
Book about MLM deceptions updated. Jon M. Taylor, M.B.A. Ph.D. has updated THE CASE (FOR AND) AGAINST MULTI-LEVEL MARKETING: The Complete Guide to Understanding and Countering the Effects of Endless Chain Selling and Product-based Pyramid Schemes. The book's introduction states:
- MLM as a business model is predicated on an endless chain of recruitment, as are "pay to play" chain letters and no-product pyramid schemes.
- Every one of the compensation plans of hundreds of MLMs Taylor has analyzed assumes an infinite and virgin market, neither of which exist in the real world. MLM is therefore fundamentally flawed, uneconomic, and deceptive.
- For the more than 400 MLMs for which Taylor has been able to obtain relevant data, the percentage of distributors who lose money is over 99%.
This page was revised on July 7, 2012.