The News Release You Won’t See from CALA

The following is not a real news release. It is a mash up of recent stories in the news, all true, yet it takes the absurd and slanted WV CALA angle and shows what could be, if “they” cared and if “they” wanted to really be helpful to West Virginians.

“The recent release of evidence of corporate fraud and kickbacks by some businesses involved in pharmaceutical distribution is interesting as it may relate to litigation being heard in a federal courtroom in West Virginia. The fines are just the latest examples of widespread fraud in the medical device and pharma industries. Daiichi Sankyo agreed to pay $39 million to the U.S. federal government and state Medicaid programs to settle allegations of paying kickbacks to physicians to prescribe several of its drugs. The agreement, which is the latest in a string of such deals in recent years involving drug makers, stems from a lawsuit filed under whistleblower provisions of the False Claims Act by a former Daiichi Sankyo sales rep. according to West Virginia Citizens Against Lawsuit Abuse (WV CALA).

“This is another example of how some ruthless corporations take advantage of our system for personal benefit, and why West Virginia needs to crack down on corporate wrongdoing. Just last month, Daiichi Sankyo agreed to pay the $39 million, and recent revelations across the country show it is just the tip of the iceberg. When German multinational Siemens was caught paying out more than a billion dollars between 2002-07 to bribe foreign officials into giving the company government contracts, U.S. prosecutors led the case against one of the largest corporations in the world. Siemens cooperated, spending hundreds of millions of dollars on an internal investigation. And in the end, the company was still fined a record $1.6 billion.

In CALA’s view, Siemens got off easy. “At a trial, the fines could have been much greater and the company’s plea agreement helped it avoid a ban on winning future U.S. government contracts. Federal prosecutors may seem all-powerful, but when they are prosecuting huge multinationals, they are David to the corporate Goliath. “Up against the largest and most powerful corporations in the world,” prosecutors are the “little guy.”

And this is an abuse of our system that cannot be tolerated,” said Roman Stauffer, Executive Director of  WV CALA. This is big money fraud at the highest levels and CALA knows it. Stauffer went on to point out “the OtisMed Corporation, the maker of the OtisKnee, did not seek clearance from the Food and Drug Administration for its OtisKnee guides before it started selling them. When the company did apply for FDA review, its application was rejected because, the agency said, the company failed to show that the product was safe and effective. In December 2014, OtisMed and its former chief executive pleaded guilty in Federal District Court in Newark, NJ to criminal charges of distributing adulterated medical devices. The Justice Department said the company sold and distributed 18,000 of its OtisKnee devices from 2006 to 2009 without FDA approval.

No one can say with certainty if the OtisKnee device caused certain patient’s problems, but in announcing an $80 million settlement of criminal and civil charges against OtisMed, United States Attorney Paul J. Fishman said patients “should be entitled to trust that the devices their doctors are using are safe, effective, tested and approved.”

An examination of the OtisKnee case shows how easily that trust can be violated in the rapidly evolving world of medical devices, a thriving $110 billion-a-year industry. If not for a whistle-blower, the public might never have learned about the widespread use of a potentially dangerous device that sidestepped regulation. Stauffer says this “has to stop and it starts with an aggressive consumer and plaintiff oriented legislative and congressional team,” such that is missing here in West Virginia this session he says.

“It is wrong to think CALA would in any way sponsor or promote legislative leaders who would undermine the rights of individual. We cannot and won’t do that. Our supporters and incidentally the total funding for my position depends on doing right by everyday West Virginian’s which is why you’ll see in detail, who funds us and how much. It is open and transparent, as it should be.”

Stauffer pointed out how one drug and medical device manufacturer recently used their organization in an attempt to garner adverse pretrial publicity for the defendants against the plaintiffs by putting out a piece critical of lawyer advertising. Stauffer noted, the direct to consumer marketing by drug companies dwarfs that of lawyers. He also noted it was most unusual timing such that it was obvious the mfgr wanted to influence the prospective jury pool before and upcoming trial.

Other companies that Stauffer and CALA see as the beneficiaries of government leniency have forked over huge fines to Washington. Barclays, which was rewarded for its cooperation in a 2012 case about manipulating the London interbank offered rate, or Libor, settled for $453 million in fines paid to the U.S. Commodity Futures Trading Commission, the U.S. Department of Justice and the U.K.’s Financial Services Authority. In 2013, J.P. Morgan paid out $1 billion in fines for securities-law violations in the “London Whale” trading scandal, which caused the bank to lose some $6 billion on derivatives trades.

Stauffer concluded, “Now is the time for West Virginia to aggressively go after corporate fraud and not let the well to do escape by only paying corporate fines which ultimately costs the shareholders. The system should operate to ensure it serves the interests of ordinary people, instead of corporate wrongdoers . It’s no surprise that the corporate executives  oppose actual criminal penalties, including jail time, for wrongdoing that would help prevent them from abusing our system for personal profit. We encourage West Virginians to call their legislators and tell them we need more lawyers and prosecutors going after corporate fraud.”

WV CALA encourages every member of the legislature to read books such as Too Big to Jail by Brandon Garrett and Battling Goliath by Kip Petroff to learn more about corporate fraud and wrongdoing in the financial services industry, insurance, and the pharma and medical device industries.”

And that, my friends, is a PR you will never, ever see from this group!!!


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