Topic: Obama Administration Effort to Remove Drug CEO Jolts Firms

[RickZ]

Economy or politics?  Politics or economy?  Six of one, half-dozen of the other.

The crony capitalist/marxist hybrid Obama Administration is on the (long) march again.

http://online.wsj.com/article/SB10001424052748704123204576283283851626952.html

A government attempt to oust a longtime drug-company chief executive over his company's marketing violations is raising alarms in that industry and beyond about a potential expansion of federal involvement in the business world.

The Department of Health and Human Services this month notified Howard Solomon of Forest Laboratories Inc. that it intends to exclude him from doing business with the federal government. This, in turn, could prevent Forest from selling its drugs to Medicare, Medicaid and the Veterans Administration. If the government implements its ban, Forest would have to dump Mr. Solomon, now 83 years old, in order to protect its corporate revenue. No drug company, large or small, can afford to lose out on sales to the federal government, a major customer.

The campaign against drug-company CEOs is part of a larger Obama administration effort to pursue individual executives blamed for wrongdoing rather than simply punishing companies. The government has tried to prosecute Wall Street executives in connection with the 2008 financial crisis, but with limited success.

The Health and Human Services department startled drug makers last year when the agency said it would start invoking a little-used administrative policy under the Social Security Act against pharmaceutical executives. This policy allows officials to bar corporate leaders from health-industry companies doing business with the government, if a drug company is guilty of criminal misconduct. The agency said a chief executive or other leader can be banned even if he or she had no knowledge of a company's criminal actions. Retaining a banned executive can trigger a company's exclusion from government business.

The "action against the CEO of Forest Labs is a game changer," said Richard Westling, a corporate defense attorney in Nashville who has represented executives in different industries against the government.

According to Mr. Westling, "It would be a mistake to see this as solely a health-care industry issue. The use of sanctions such as exclusion and debarment to punish individuals where the government is unable to prove a direct legal or regulatory violation could have wide-ranging impact." An exclusion penalty could be more costly than a Justice Department prosecution.

--SNIP--

Rule by fiat instead of governing with consent.

The move against Forest's Mr. Solomon—its CEO, president and chairman—brings the campaign to a new level. Lawyers not involved in the Forest case said the attempt to punish an executive who isn't accused of misconduct could tie up the industry's day-to-day work in legal knots.

A feature not a bug.

[IronDioPriest]

This is how big-business attempting to use government to control competition and corner markets turns into crony-capitalism, and how crony capitalism gets flipped on its head and turned into fascism.

We are in great danger. Look at how Boeing was punished. Their crime? Refusing to allow union officials to force their way onto the company's board of directors, and opting to leave the state instead. This move against the pharma exec is another facet of the same fascist tendency. Dollars to doughnuts (maybe the article in full context even says it) that the DHS has a replacement in mind.

[Sectionhand]

The Boeing fight is just beginning . I'm not so sure that the Feds will win out .

[charlesoakwood]

They moved their office to Chicago and this is what it got them.
May their fortitude be as strong as their product.

[Libertas]

Tyranny, it always fails in the end, usually after much bloodshed...

[Predator Don]

a little-used administrative policy under the Social Security Act



I can't fathom how many "little used" pieces of policy are hid in obamacare.

We are screwed.....Our so called conservative leaders don't have the gonads to get a crumb of a cut, so how will they be able to tackle the intrusive behavior that is obama?

 

[michelleo]

Blood boiling.  Can't see straight. 

via Hot Air :

Wall Street Journal reported :

A government attempt to oust a longtime drug-company chief executive over his company’s marketing violations is raising alarms in that industry and beyond about a potential expansion of federal involvement in the business world.
The Department of Health and Human Services this month notified Howard Solomon of Forest Laboratories Inc. that it intends to exclude him from doing business with the federal government. This, in turn, could prevent Forest from selling its drugs to Medicare, Medicaid and the Veterans Administration. If the government implements its ban, Forest would have to dump Mr. Solomon, now 83 years old, in order to protect its corporate revenue. No drug company, large or small, can afford to lose out on sales to the federal government, a major customer.

I sincerely hope every pharmaceutical company bands together and decides to stop doing business with the federal government. They should certainly realize they are next.
Rule of law in this country is dead.

[Glock32]

This is what happens when the government muscles in on the private sector. It sets itself up as either a major customer and/or a mandatory clearing house through which all business must transit. It then gets to set rules on everything, holding companies and their customers hostage. Our economy, to the extent that it is now so incestuous between large corporations and the government, is getting pretty close to the dictionary definition of Fascism.

Just wait until ObamaCare starts taking full effect. It's going to expand way beyond things that are obviously healthcare related. Anything that has a tenuous relationship is going to be crammed under its purview.

[Pandora]

Not just Pharma -- every company.  They're aiming for widespread persecution and harassment.

The "action against the CEO of Forest Labs is a game changer," said Richard Westling, a corporate defense attorney in Nashville who has represented executives in different industries against the government.

According to Mr. Westling, "It would be a mistake to see this as solely a health-care industry issue. The use of sanctions such as exclusion and debarment to punish individuals where the government is unable to prove a direct legal or regulatory violation could have wide-ranging impact." An exclusion penalty could be more costly than a Justice Department prosecution.

He said that the Defense Department and the Environmental Protection Agency, for example, have debarment powers similar to the HHS exclusion authority.

The Health and Human Services department startled drug makers last year when the agency said it would start invoking a little-used administrative policy under the Social Security Act against pharmaceutical executives. This policy allows officials to bar corporate leaders from health-industry companies doing business with the government, if a drug company is guilty of criminal misconduct. The agency said a chief executive or other leader can be banned even if he or she had no knowledge of a company's criminal actions.

So, what the hell "admin policy" have they twisted out of shape in order to use this?  And even if there was no knowledge?!

The Forest case has its origins in an investigation into the company's marketing of its big-selling antidepressants Celexa and Lexapro. Last September, Forest made a plea agreement with the government, under which it is paying $313 million in criminal and civil penalties over sales-related misconduct.

A federal court made the deal final in March. Forest Labs representatives said they were shocked when the intent-to-ban notice was received a few weeks later, because Mr. Solomon wasn't accused by the government of misconduct.

Whoopsie.  Made a deal with da debil.

In October 2010, HHS outlined how it could use the exclusion tool on individuals without proof of personal misconduct. The first application involved the CEO of a smaller pharmaceutical maker in St. Louis. The executive stepped down. He has since pleaded guilty to a misdemeanor marketing violation and was sentenced to prison and fined.

Forest pleaded guilty to a misdemeanor in connection with its marketing of Celexa as a treatment for children and adolescents before the drug won approval for pediatric use from the Food and Drug Administration. The company also paid fines over civil accusations.

All over "marketing violations" and no guilt.

Ookay.  This is particularly anxiety-provoking for me; these drug companies are doing us a service that many cannot live without.

Yup, MichelleO; rule of law is dead.

[Pandora]

I merged us all into RickZ's thread as it was begun first.