Multinational Monitor

JUN 2002
VOL 23 No. 6


An Epidemic of Neglect: Neglected Diseases and the Health Burden in Poor Countries
by Rachel Cohen

Victory and Betrayal: The Third World Takes on Rich Countries in the Struggle for Access to Medicines
by Asia Russell

Commentary: Patents Pools and the AIDS Crisis
by James Love

The Evergreen Patent System: Pharmaceutical Company Tactics to Extend Patent Protection
by Robert Weissman


Essential Drugs and Health for All: Healthy Innovations from Bangladesh
an interview with
Zafrullah Chowdhury



Behind the Lines

Stripping Away Big Pharma’s Fig Leaf

The Front
Haiti’s Not-So-Free Zones

The Lawrence Summers Memorial Award

Names In the News


Names In the News

Quality Fine for Schering

Schering-Plough Corporation will pay $500 million to settle charges of repeated failure over recent years to fix problems in manufacturing dozens of drugs at four of its facilities in New Jersey and Puerto Rico.

Schering-Plough said that federal officials had opened a criminal investigation of its Puerto Rico facilities.

The May $500 million settlement shatters the previous Food and Drug Administration (FDA) record settlement amount of $100 million. In 1999, Abbott Laboratories paid $100 million to settle similar allegations.

The government sought the $500 million to disgorge profits made by the firm on drug products that were produced over the last three years.

The company also agreed to future monetary payments of up to $175 million and to disgorge additional profits should it fail to adhere to timelines established in the consent decree.

The government's action follows 13 inspections at four New Jersey and Puerto Rico facilities since 1998 during which the FDA found significant violations of quality control regulations related to facilities, manufacturing, quality assurance, equipment, laboratories, and packaging and labeling.

The company has had a history of failing to comply with quality control requirements at these plants, which produce about 90 percent of the firm's drug products.

The decree affects about 125 different prescription and over-the-counter drugs produced at the Puerto Rico and New Jersey facilities.

As part of the decree, the company has agreed to suspend manufacturing 73 other products.

Rampant Bribery

Very high levels of bribery continue in developing countries by corporations from Russia, China, Taiwan and South Korea, as well as numerous leading industrial nations, all of which now have laws making corrupt payments to foreign officials a crime, according to Transparency International (TI), the global anti-corruption organization. TI released its Bribe Payers Index (BPI) 2002 in May.

"The laws are not being properly enforced," says Peter Eigen, TI's chair. "Our new survey leaves no doubt that large numbers of multinational corporations from the richest nations are pursuing a criminal course to win contracts in the leading emerging market economies."

"Politicians and public officials from the world's leading industrial countries are ignoring the rot in their own backyards and the criminal bribe-paying activities of multinational firms headquartered in their countries, while increasingly focusing on the high level of corruption in developing countries," Eigen says. "The governments of the richest nations continue to fail to recognize the rampant undermining of fair global trade by bribe-paying multinational enterprises."

The report shows that companies from Russia and China, which are increasingly exporting to other emerging market countries, are using bribes "on an exceptional and intolerable scale."

"The extent to which companies from Taiwan and South Korea use bribes abroad is only marginally less," Eigen says.

The Bribe Payers Index is based on surveys conducted in 15 emerging market economies by Gallup International Association.

The index shows that U.S. multinational corporations, which have faced the risk of criminal prosecution since 1977 under the Foreign Corrupt Practices Act, have a high propensity to pay bribes to foreign government officials. The U.S. score of 5.3 out of a best possible clean 10 is matched by Japanese companies and is worse than the scores for corporations from France, Spain, Germany, Singapore and the United Kingdom.

The highest scores, indicating the lowest propensity to bribe abroad, were for companies from Australia, Sweden, Switzerland, Austria, Canada, the Netherlands and Belgium.

Hammering Stanley

Stanley Works will not proceed, at least for now, with its planned reincorporation in Bermuda.

The move to Bermuda was intended to reduce the company's tax burden, but drew heated community and worker opposition. The reincorporation was estimated to save Stanley $30 million a year because of tax loopholes. The company would not have physically moved its headquarters or any operations to Bermuda.

The decision not to proceed with the move to Bermuda came in response to a lawsuit filed by Connecticut Attorney General Richard Blumenthal.

Blumenthal alleged that a Stanley Works shareholders voting ratifying the move to Bermuda was "rife with voting irregularities."

"The shareholder vote was more than slipshod and incompetent," Blumenthal says. "Stanley purposely created confusion and deliberately misled shareholders --including its own employees, working men and women whose legal right to vote and life savings were at stake."

"Stanley Works is trying to sell a hammer with two heads," the Connecticut attorney general adds. "It is abandoning America and betraying a proud tradition of excellence and fairness."

Under the terms of the agreement, Stanley Works will not make any filings to implement the reincorporation without providing three business days' written notice to the Attorney General and Treasurer.

-- Russell Mokhiber


Mailing List


Editor's Blog

Archived Issues

Subscribe Online

Donate Online


Send Letter to the Editor

Writers' Guidelines