Doing good by doing well: A career opportunity in Pharma

by Daniel R. Hoffman, Ph.D.

Published Dec. 17, 2013, 6:00 a.m. ET

Pharma is no longer the industry it once was. R&D managers now dance to the tune of finance/accounting and lawyers on the industry's most important function: developing new therapies. More generally, although pharma is an industry whose goal consists of creating products to improve the length and quality of life, a review of its violations and dirty tricks over the past decade shows that it has lost its moral compass.

Parents used to encourage their sons and daughters to consider careers in pharma in the belief that it is a recession-proof industry. Most people now know that is a myth. In 2010 and 2011, pharma exceeded all commercial sectors of the U.S. economy in the number of employees laid off.

But do not despair. If a young person still wants to pursue a career in the pharmaceutical industry, there is one functional area that offers opportunity, remuneration, interesting work and a chance to do the right thing. This remaining area of worthwhile endeavor involves becoming a whistleblower.

Consider the whistleblowers at Johnson & Johnson who helped the federal government extract a $2.2 billion fine from the company for bribing physicians, pharmacists, long-term care managers and a pharmacy distributor to encourage sales of its antipsychotic drug, Risperdal.

Eight whistleblowers received settlements of more than $20 million each. The first five who filed will each get $29 million from the federal and various state governments. A sixth plaintiff received over $20 million last year and two others will make more than $28 million each.

Of course the work has expenses as well as its gains. Whistleblowers typically have to pay their attorneys one-third of what they receive. Then too, the payouts they receive don't come overnight. On the Risperdal case the plaintiffs filed their lawsuits in 2004 and most settlements weren't reached until last month, a period of nine years. Since whistleblowers become persona non grata in pharma soon after filing their lawsuits, they need to find other ways of supporting themselves until they receive settlements. Of course, although none of the whistleblowers will ever work in pharma again, someone with more than $14 million in his/her bank account shouldn't be too troubled about that.

Some skeptics might despair of career opportunities in whistleblowing by claiming that for every sensational settlement, many more people walk away empty handed. But whistleblowing isn't the same as professional sports or entertainment where a small handful of people make huge incomes and the rest barely get by. Although the False Claims Act (see here) confers rewards on the first whistleblower that files, lawyers for subsequent filers often make deals to share the award. That kind of sharing occurred in the Risperdal case.

A segment of people who might consider whistleblowing careers may recoil from this line of work on the grounds that it involves going after the big bucks by attacking one's colleagues. That's true, but those aspects of the job description make it no different from what C-suite, fiduciary officers routinely do.

As with other occupational choices, whistleblowing has its pluses and minuses. Contrasting whistleblowing with what it takes to gain a C-suite job, making it the top positions invariably requires extensive ass kissing and knifing. Whistleblowing, on the other hand, demands a fierce devotion to integrity, together with fastidious record keeping and some extended role playing.

After weighing the various pluses and minuses, there's another important matter that the prospective whistleblower should keep in mind. He mustn't fool himself into thinking that he will substantially reform the industry.

Apparently the lead whistleblower in the Risperdal case, ex-J&J rep Judy Doetterl, hasn't figured that out. She claims that the drug industry is no longer as bad as it was before she filed her lawsuit. Pharma is "completely different now than it was 10 years ago," she told Bloomberg News.

Were that only true, we could all enjoy a drink with Doetterl (while letting her pick up the tab) and go on to the next good challenge. Despite her assurance that things are now much better than in the ancient days of 2004, Doetterl may want to ask herself why the same federal prosecutors who had her wear hidden microphones to J&J sales meetings despair that pharma has not changed its ways, even after numerous multi-billion dollar fines.

For Big Pharmas, $2-3 billion dollars fines are just another cost of doing business. In all cases the fines and penalties are paltry compared to revenues the companies generated from their off-label promotions and other violations. (See here, here and here.)

While whistleblowing and the fines that come from it do some good things by modifying specific practices, in no way do they alter the fundamentals by which pharma operates. Some people suggest that real reform can occur by creating tougher penalties. For example, they suggest that making fiduciary officers criminally liable for their company's transgressions and suspending patents on the involved drugs would set pharmas on a lawful path. Others believe that pharmas would find the light if penalties against them involved barring offending companies from selling those brands that benefitted from the corrupt practices to government programs such as Medicare, Medicaid, the Defense Department and the Veterans Administration. In cases where brands that benefitted from illegal behavior are indispensable because they lack comparable competitors, advocates for tougher measures claim the government should declare compulsory licensing, that is, break their patents. That would enable generic houses to contract with the government and sell those compounds at greatly reduced prices.

Yet it remains questionable if even those stringent reforms would effectively change the way pharma does things. If people in the industry can collect big money for themselves by rigging studies, hiding negative data, marketing off-label, bribing investigators and prescribing physicians, a lot of them will find ways to rationalize doing just that.

The prospect of getting rich by creating and promoting products for illness creates an inherent ethical dilemma. True believers in private enterprise claim that the world cannot make good progress on treating and preventing illness without the lure of such fortunes. Yet it remains to be seen whether separating the scientific work, via a greatly expanded NIH, from the business side couldn't make as much or more progress.

So if the prospect of doing the right thing and making a nice pile of dough for it seems appealing, then pharma whistleblowing may be a career calling for some people. They just shouldn't think they will somehow reform pharma or turn it into a good citizen because exposure, fines and even some pharma CEOs going to jail won't necessarily reform a system that puts profit and individual gain over principles of the common good.

That kind of change requires organizing people to remake, root and branch, the health care system that now constitutes 17% of the U.S. economy.