The Multinational Monitor

JUNE 1993 - VOLUME 14 - NUMBER 6

N A M E S   I N   T H E   N E W S

Labels That Lie

U.S.-based multinational pharmaceutical companies that peddle drugs to the Third World often fail to provide the information needed by physicians to administer the drugs safely and effectively, finds a congressional Office of Technology Assessment (OTA) examination of labeling practices. According to the OTA's discoveries, two-thirds of a random sample of 241 drugs marketed by U.S. -based multinational pharmaceuticals failed to provide appropriate medical information.

The OTA evaluated the medical appropriateness of drug labeling in four countries - Brazil, Kenya, Panama and Thailand. Typical of the problems found by the OTA were the following:

  • A synthetic version of the male hormone testosterone was recommended for treating women for frigidity and benign breast conditions, to suppress production of breast milk and to relieve menopausal symptoms. The company provided inadequate evidence that the drug is effective for these conditions and the label failed to warn about serious side effects of this potentially dangerous drug.
  • A drug for relief of pain and inflammation was recommended for a number of minor ailments, such as headaches, without mentioning potential side effects of the drug, including the complete shutdown of the body's production of white blood cells - a fatal complication. The drug is no longer on the U.S. market.
  • The label of a magnesium-containing antacid instructed the user to regularly add the product to infant formula to "prevent milk from souring and forming curds in the stomach," aid digestion and to prevent constipation in healthy babies. The company provided no evidence to support these uses, and the labeling did not warn of the danger of magnesium overdose in infants.

The OTA study did not identify the drugs or drug companies involved in the study by name. Representative Henry Waxman, D-California, and Senator Edward Kennedy, D-Massachusetts, who released the OTA's findings in May, assert that a listing of the drug products and countries of sale should now be made available to the public.

Dumping the Poor

Hospitals continue to deny care to emergency room patients and women in labor who cannot pay for treatment, despite a six-year-old federal law banning the practice, according to a new study by the Public Citizen Health Research Group.

Between 1986 and 1992, 302 violations for "patient dumping" involving 268 hospitals were identified by the U.S. Department of Health and Human Services (HHS). Almost half of these violations, at 131 hospitals, were identified between 1991 and 1992, according to the report, "Patient Dumping Continues in Hospital Emergency Rooms."

It should come as no surprise that for-profit hospitals were significantly more likely to dump patients than other hospitals," says Dr. Sidney M. Wolfe, director of the Health Research Group and co-author of the report.

Under the Emergency Medical Treatment and Labor Act of 1986, all hospitals receiving Medicare funds are prohibited from refusing to examine or treat emergency patients because they are poor, uninsured or any other non-medical reason.

Since the "anti-dumping" law went into effect in 1986, only 24 hospitals, or 9 percent, have been penalized for violations. Seven hospitals were terminated from receiving Medicare payments - the most severe penalty -while 17 hospitals were fined amounts ranging from $1,500 to $150,000.

The report finds that government-approved secrecy is also a problem. HHS leaves the public unaware of most violations and penalties, underpublicizing the violations, or, in 10 of the 17 cases in which hospitals were fined, agreeing not to publicize or disclose the settlement.

Busting the Doughboy

Assistant U.S. Attorney Lynn Zentner in Minneapolis is investigating charges that Pillsbury Company defrauded the U.S. Customs Service out of $4 million through two alleged schemes involving the shipment of asparagus, frosting and other goods.

The schemes were described in an affidavit filed under seal in a U.S. District Court by Customs Investigator Michael Banas in August 1992. The affidavit was unsealed in April 1993. Information about the schemes came from an unnamed whistle blower who began working at Pillsbury in 1977, and first approached Customs in December 1991.

Zentner, who has been investigating the case for 15 months, says no charges have been filed.

In one alleged scheme, Pillsbury sold goods to a U.S. exporter under the pretense that they would be sold to countries in western African. However, according to the affidavit, the company knew that the goods would be sold elsewhere in the United States. This occurred from September 1985 through August 1992, according to the affidavit.

Under the U.S. Customs Service duty drawback program, Customs will refund up to 95 percent of the duties U.S. companies pay on imports, if the imports are used for exported goods as the ingredients of the products or used as whole products.

According to Banas, Pillsbury sold the goods to a company in the U.S., who then gave Pillsbury a phony bill stating that the product was shipped overseas. Pillsbury took the phony bill to the Customs Service for a refund.

The second scheme involved the company's claims on asparagus imported from Mexico, and allegedly began in May 1988 and continued until October 1991. The affidavit charged that high-quality asparagus imported from Mexico was wrongly claimed to Customs for refunds on exports to Canada.

Pillsbury denies all charges. "We have a long history of integrity," says Pillsbury spokesperson Terry Thompson. "We have sophisticated measures in place to prevent diversion."

- Ben Lilliston

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