Protecting Public Health from Risky Corporate Practices

Photo Credit: British American Tobacco

Two current news stories illustrate the challenges the US government faces in protecting the public from corporations that manufacture dangerous products.  A  Huffington Post report posted on October 9th describes how in 1993, Bain and Co., the Boston consulting company where Mitt Romney was CEO, received a $3.9 million contract from the US government to help the Russian government privatize its economy.  At the same time, Bain also had a contract with British American Tobacco (BAT), a conglomerate that produced Kool, Lucky Strike and Pall Mall cigarettes.   In 1992, the Russian government’s monopoly on tobacco production ended.  Bain used its government contract to develop a privatization strategy for Russia, then helped BAT executives to maximize the company’s growth opportunities in this new environment.    


Bain also worked for Philip Morris, another Big Tobacco company that was expanding its business in Russia.  In an earlier investigation, the Center for Public Integrity has shown how the marketing and pricing strategies of multinational tobacco companies – and their sweetheart deals with Russian officials – helped increase the rate of smoking among Russian women from 7 % in 1992 to 22% by 2009.  Russian men continue to have among the highest smoking rates in the world.   In Bain’s US work with Philip Morris, reports the Huffington Post, the

consulting company helped Philip Morris  to develop a “coordinated long term approach to legal/regulatory/public

opinion opportunities and challenges to maximize shareholder wealth.” 



In another story, The New York Times reports that 11 people have died and 119 have become sick in a national meningitis outbreak linked to injections of a contaminated drug .  All of them had been injected with a pain drug shipped around the country by a compounding pharmacy in Massachusetts. Compounding pharmacies are small to midsize businesses that have emerged to exploit gaps in the regulations of the pharmaceutical industry. 


Photo Credit: US Food and Drug Administration

“This incident raises serious concerns about the scope of the practice of pharmacy compounding in the US and the current patchwork of federal and state laws,” said a statement by Representative Henry A. Waxman, Democrat of California, and two other Democrats on the House Energy and Commerce Committee, Diana DeGette of Colorado and Frank Pallone Jr. of New Jersey. The committee has jurisdiction over the Food and Drug Administration.


Gary Dykstra, a professor at the University of Georgia College of Pharmacy who was the F.D.A.’s deputy associate commissioner for regulatory affairs in the 1990s and retired in 2007, told the Times that Federal drug regulators have tried to crack down on the larger compounding pharmacies with limited success. “They were pushing the limits of pharmacy practice. We were seeing some very clever entrepreneurs that were trying to get a foothold in what they saw as a need but taking it to extremes.” However, inspection proved difficult. They were politically adept, he said, using lobbyists. “They were making a lot of money so they fought us pretty hard,” Mr. Dykstra

said.  “They argued this was a doctor-patient relationship and the F.D.A. couldn’t interfere…We would put a lot of

work into an investigation but our recommendations would find little support.”  The F.D.A. has said it knows of 200

“adverse events,” involving 71 compounded products since 1990.