Monday, September 7, 2009

Watching the Watchman & Media Accountability

Agenda For Hope By Agustin Martin G. Rodriguez

By now, after the Watchmen film has made its theatrical and DVD rounds, Juvenal’s haunting question, "Who watches the Watchmen," should be back in currency. It is a question that can be posed to the institutions of Philippine journalism as much as it can be posed to costumed vigilantes.
Those of us who lived through the last days of martial law know how guerrilla journalism was an essential element in the corrosion of Marcos’s grip over Philippine society. Because journalists were able to leak the truth regarding the war in Mindanao, the terrible violations of the basic rights of the people, the (under)mining of the Philippine economy by his family and cronies, the upsurge of anger and the growing resistance awakened by the assassination of Ninoy and the subversion of the snap elections, the general populace was able to cultivate its indignation, gather its courage, and take part in the events the led to EDSA. These same but freer institutions of journalism investigated the unaccounted riches, the jueteng connections, the midnight cabinet decisions, and the unabashed cronyism of another corrupt president, and led to his downfall. It continues to expose the follies and misdemeanors of this present administration and its allies.
I doubt if anyone who values our beleaguered democracy does not value the role of the press as one of the primary watchdogs of our democracy. Without it, the predatory elite who rule our country will go their merry way with full impunity. At least with the press hounding them, they have to give a thought to trying to cover their tracks. Even the present set of politicians, with all their sense of impunity, must show a semblance of accountability for their acts of corruption and abuses of power. This is the reason why so many journalists have been killed in the last 10 years.
However, despite their vital role in our democracy, we are also aware that they too need to be held accountable for their practices. One only need look at the yellow journalism that adorns our sidewalks to realize how journalists could destroy reputations and violate people’s privacy with the kind of reporting that aims to cheaply titillate the public’s imagination. Or one can tune in to a random AM station and hear commentators ranting freely against some government agency regarding some issue on which they have not done their full investigation. Television too is replete with such careless journalism. There are TV investigation shows where, without any apology for the violation of people’s rights to a fair hearing, they barge into alleged abusive officials’ offices or criminals’ homes to present a hasty conclusion about their guilt. People’s lives could be destroyed in an hour’s showing based on less than a week’s worth of sloppy snooping.
When the media behave badly, who reports on them? In a recent paper written for the Loyola Schools’ Agenda for Hope project entitled "Exacting Accountability from the Media: Positive Signs," academic and journalist Chay Florentino Hofileña noted that there is a growing awareness among the news outlets that their credibility is dropping. She notes a Pulse Asia Survey of 2004 where television had a 67%, radio 20%, and newspapers 5% credibility rating. She attributes the higher TV rating to the perception that TV interviewees are "aired as they speak, with little or no editing or misinterpretation," unlike in newspapers where they are misquoted and misinterpreted. Radio suffers from its low ratings because of its sensationalist reporting and because its reporters are perceived to be corruptible. Becoming aware of these issues regarding their credibility, media have made some steps toward self-regulation.
One major step is the formulation of a code of ethics by some major media organizations like GMA-7, ABS-CBN, and thePhilippine Daily Inquirer (PDI). These codes of ethics, notes Hofileña, "reflect a desire to uphold journalistic standards even in tough situations." They are still considered works in progress, and have not been made public, but they have already been used to sanction media personnel who have violated the most basic principles of these codes. For instance, Ces Drilon was suspended for her Abu Sayaf fiasco.
Hofileña also notes that PDI has set up a reader’s advocate position "to provide readers a venue for voicing complaints and dissatisfaction with the paper’s stories or coverage." The advocate is like the reader’s voice in the newsroom to be the "counter-weight to the otherwise exclusive powers of editors and reporters to define the news agenda." Lorna Kalaw Tirol, the first and so far only reader’s advocate, was able to bring cases against writers who used their columns to make money or as platforms to air their homophobia. Unfortunately, she has resigned from her position and it remains unfilled to this day.
Perhaps, an even more significant sign of hope for increasing media accountability is the engagement of citizen journalists in reporting the news and the practice of civic journalism by local newspapers. With citizen journalists, media outlets open avenues for the input of ordinary citizens in important events such as the elections when ABS-CBN opened its newsrooms to citizen reports. The local press also practices a different kind of journalism in which they dialogue with communities to surface their concerns and help them define solutions to their issues. For instance, journalists in Palawan and Mindanao act as facilitators for public reflections and write as advocates for these communities’ concerns. Hofileña says, "Because citizens are involved in the coverage of events that matter in public life through citizen journalism, they feel a stronger connection with the media. And because journalists, through their practice of public or civic journalism, become more involved in issues and problems that concern communities and ordinary citizens, their stories resonate more with their readers."
Finally, there are the examples of the Philippine Center for Investigative Journalism and Newsbreak, which are news groups put up by journalists who wish to practice journalism according to its highest standards. These groups have been able to raise funding independently, which allows them to genuinely pursue stories without having to prioritize sales or the concerns of their patrons. In these days of 24-hour news TV and Internet journalism, where journalists are pressured to keep feeding their news outlets with breaking stories and newspapers have to compete with the Internet to break interesting and sensational news, we are seeing less of the carefully thought-out story and more of the quick flow of images and sound bites that are not framed by deep background research or rounded out by a fuller reflection on the unfolding of events. These independent groups are able to serve the public by offering well-researched and well thought-out pieces because they are not beholden to commercial or vested interests.
These are only tentative beginnings at self-regulation and greater accountability of the media. These attempts must be further pursued because only if the media govern themselves well will they have the integrity to credibly advocate for good governance and expose the ills of those who govern us. Our Watchmen must strengthen these structures that keep them true to their watch. But just as importantly, we the people must find effective ways to remind them constantly of this vocation they have embraced.

Dr. Agustin Martin G. Rodriguez is associate professor and chair of the Philosophy Department at the Ateneo de Manila University

Wednesday, September 2, 2009

Pfizer to pay record $2.3B penalty over promotions

Why does big pharma think it can get away with bribing doctors to prescribe their drugs? Equally amazing is the doctors who put their hands out to accept the goodies. The American Medical Association and the PhRMA Code of Sale Reps Ethics prohibit such behavior and it's thriving according to the article below by Devlin Barrett.

Repeat offender Pfizer paying record $2.3B settlement for illegal drug promotions
By Devlin Barrett, Associated Press Writer
On Wednesday September 2, 2009,

WASHINGTON (AP) -- Federal prosecutors hit Pfizer Inc. with a record-breaking $2.3 billion in fines Wednesday and called the world's largest drug maker a repeating corporate cheat for illegal drug promotions that plied doctors with free golf, massages, and resort junkets.

Announcing the penalty as a warning to all drug manufacturers, Justice Department officials said the overall settlement is the largest ever paid by a drug company for alleged violations of federal drug rules, and the $1.2 billion criminal fine is the largest ever in any U.S. criminal case. The total includes $1 billion in civil penalties and a $100 million criminal forfeiture.
Authorities called Pfizer a repeat offender, noting it is the company's fourth such settlement of government charges in the last decade. The allegations surround the marketing of 13 different drugs, including big sellers such as Viagra, Zoloft, and Lipitor.
As part of its illegal marketing, Pfizer invited doctors to consultant meetings at resort locations, paying their expenses and providing perks, prosecutors said.
"They were entertained with golf, massages, and other activities," said Mike Loucks, the U.S. attorney in Massachusetts.

Loucks said that even as Pfizer was negotiating deals on past misconduct, they were continuing to violate the very same laws with other drugs.
To prevent backsliding this time, Pfizer's conduct will be specially monitored by the Health and Human Service Department inspector general for five years.
In an unusual twist, the head of the Justice Department, Attorney General Eric Holder, did not participate in the record settlement, because he had represented Pfizer on these issues while in private practice.

Associate Attorney General Thomas Perrelli said the settlement illustrates ways the Justice Department "can help the American public at a time when budgets are tight and health care costs are rising."

Perrelli announced the settlement terms at a news conference with federal prosecutors and FBI, and Health and Human Services Department officials.
The settlement ends an investigation that also resulted in guilty pleas from two former Pfizer sales managers.

Officials said the U.S. industry has paid out more than $11 billion in such settlements over the past decade, but one consumer advocate voiced hope that Wednesday's penalty was so big it would curb the abuses.

"There's so much money in selling pills, that there's a tremendous temptation to cheat," said Bill Vaughan, an analyst at Consumers Union, the nonprofit publisher of Consumer Reports.
"There's a kind of mentality in this sector that (settlements) are the cost of doing business and we can cheat. This penalty is so huge I think consumers can have some hope that maybe these guys will tighten up and run a better ship."

The government said the company promoted four prescription drugs, including the pain killer Bextra, as treatments for medical conditions different from those the drugs had been approved for by federal regulators. Authorities said Pfizer's salesmen and women created phony doctor requests for medical information in order to send unsolicited information to doctors about unapproved uses and dosages.

Use of drugs for so-called "off-label" medical conditions is not uncommon, but drug manufacturers are prohibited from marketing drugs for uses that have not been approved by the Food and Drug Administration. They said the junkets and other company-paid perks were designed to promote Bextra and other drugs, to doctors for unapproved uses and dosages, backed by false and misleading claims about safety and effectiveness.
Bextra, for instance, was approved for arthritis, but Pfizer promoted it for acute pain and surgical pain, and in dosages above the approved maximum. In 2005, Bextra, one of a class of painkillers known as Cox-2 inhibitors, was pulled from the U.S. market amid mounting evidence it raised the risk of heart attack, stroke and death. A Pfizer subsidiary, Pharmacia and Upjohn Inc., which was acquired in 2003, has entered an agreement to plead guilty to one count of felony misbranding. The criminal case applied only to Bextra. The $1 billion in civil penalties was related to Bextra and a number of other medicines. A portion of the civil penalty will be distributed to 49 states and the District of Columbia, according to agreements with each state's Medicaid program. Pfizer's top lawyer, Amy Schulman, said the settlements "bring final closure to significant legal matters and help to enhance our focus on what we do best -- discovering, developing and delivering innovative medicines." In her statement, Schulman said: "We regret certain actions taken in the past, but are proud of the action we've taken to strengthen our internal controls and pioneer new procedures." In financial filings in January, the company had indicated that it would pay $2.3 billion over the allegations. The civil settlement announced Wednesday covered Pfizer's promotions of Bextra, blockbuster nerve pain and epilepsy treatment Lyrica, schizophrenia medicine Geodon, antibiotic Zyvox and nine other medicines. The agreement with the Justice Department resolves the investigation into promotion of all those drugs, Pfizer said.

The government said Pfizer also paid kickbacks to market a host of big-name drugs: Aricept, Celebrex, Lipitor, Norvasc, Relpax, Viagra, Zithromax, Zoloft, and Zyrtec.
The allegations came to light thanks largely to five Pfizer employees and one Pennsylvania doctor, who will now share $102 million of the settlement money.
FBI Assistant Director Kevin Perkins praised the whistleblowers who decided to "speak out against a corporate giant that was blatantly violating the law and misleading the public through false marketing claims."

To rein in the abuses, the government's five-year monitoring will force Pfizer to notify doctors about Wednesday's agreement, encourage them to report any similar behavior, and publicly post any payments or perks it gives to doctors.
Under terms of the settlement, Pfizer must pay $1 billion to compensate Medicaid, Medicare, and other federal health care programs. Some of that money will be shared among the states: New York, for example, will receive $66 million, according to the state's attorney general, Andrew Cuomo.

When Pfizer originally disclosed the settlement figure, it also announced plans to acquire rival Wyeth for $68 billion. That deal, which would bolster Pfizer's position as the world's top drug maker by revenue, is expected to close before year's end. Shares of Pfizer dropped 14 cents to $16.24 in midday trading.

AP Business Writer Linda A. Johnson in Trenton, N.J. contributed to this report.

Tuesday, September 1, 2009

Broadcom Settles Backdating Case For $118 Million; Lawyers' Fees Exceed Amount

Susan Beck writes an insightful piece on the Broadcome settlement and how the attorneys for both sides are likely to end up the only winners in this derivative suit alleging backdating which settled for $118M:

We're still scratching our heads over this one. Last week, Broadcom announced in an 8K filing that it had settled a stock option backdating derivative suit for $118 million. If approved by Los Angeles federal district court judge Manuel Real, it would be the second-largest backdating settlement for a derivative suit (behind UnitedHealthcare), and one of the biggest derivative settlements ever, according to Kevin LaCroix of The D & O Diary on how you look at it, it could appear that all the money will be used to pay lawyers, on the plaintiffs and defense side. You see, Broadcom is liable for a whopping $130 million in attorneys' fees racked up by the 19 officers and directors caught up in backdating charges, including two who face criminal counts. The $118 million that Broadcom will receive--which is coming from its D&O insurers under a settlement--will be eaten up by the $11.5 million fee for the plaintiffs' lawyers and this $130 million-plus defense tab. Broadcom is obligated to pay these defense fees under the indemnification agreements it signed with these officers and directors.You can find the derivative settlement here A copy of Broadcom's settlement with its insurers (which mentions the $130 million legal tab) can be found here Siegel of Irell & Manella, who represents Broadcom, offers a different take on this settlement. "The $118 million represents a payment to Broadcom for its benefit, and the attorneys' fees incurred and yet to be incurred are just one part of the alleged damages the plaintiffs were seeking in this case." He adds that the insurers had disputed their obligation to cover these fees, so it wasn't certain that, absent this settlement, Broadcom could have recovered from its insurers anything close to the full amount it has paid to these defendants' lawyers. "[The insurers] disputed whether they owed anything," he said. Before the settlement, the insurers had paid just $43.3 million of the more than $130 million sought by Broadcom. (This $43.3 million is included in the $118 million settlement amount.)The plaintiffs lawyers who brought the derivative suit--led by Lieff, Cabraser, Heimann & Bernstein--have dropped or released claims against 16 individuals as part of their settlement. The settling defendants deny any wrongdoing. The plaintiffs still have claims against three defendants, including Broadcom cofounders Henry Nicholas III and William Ruehle, who both face criminal charges.Broadcom used David Steuber of Howrey to negotiate with its insurers. Broadcom's special litigation committee was represented by Kaye Scholer.We briefly reached Richard Heimann at Lieff Cabraser as he was about to board a flight, but his cell phone connection ended before we could discuss the settlement in any detail. We left messages for other lawyers at his firm but have not heard back.--Susan Beck