The Multinational Monitor



Corporate Crime

The Underbelly of the Drug Industry

Corporate Crime in the Pharmaceutical Industry
by John Braithwaite
Routledge & Kegan Paul, London, 1984
Reviewed by Russell Mokhiber

Of the thousands of criminology and law professors who populate the world's universities, only a handful focus their energies in the field of corporate crime. From among that handful, by far the most innovative, prodigious, and impressive work has been produced in recent years in Australia, by John Braithwaite, a member of the faculty at the Australian Institute of Criminology, and Brent Fisse, a professor at the University of Adelaide.

Braithwaite, who has collaborated on a number of works with Fisse -- most recently a book that looks at how corporate criminals react to adverse publicity (The Impact of Publicity on Corporate Offenders, published by the State University of New York Press, Albany)-set off on his own this year to write what is destined to become a classic study of criminogenic behavior by multinational corporations in the pharmaceutical industry.

Little noticed by the U.S. media, Corporate Crime in the Pharmaceutical Industry dissects the underbelly of an industry that proudly claims credit for improved community health through drugs, to reveal bribery and corruption of public officials, negligence and fraud in the safety testing of drugs, unsafe manufacturing practices, financial manipulations, anti-competitive practices, and abusive marketing of drugs not approved in the U.S. to people in developing countries.

On the first page of his preface, Braithwaite tosses a laurel to his subject corpora-tions, noting that the pharmaceutical industry "has been responsible for removing tuberculosis, gastroenteritis, and diphtheria from among the ten leading causes of death in developed countries." But then he proceeds, in 440 pages of devastating text, to expose the industry's crimes, analyse the reasons underlying the criminal behavior, and propose innovative strategies for controlling similar behavior in the future. Braithwaite is unapologetic about the preponderance of "bad news" in his book. "Unfortunately," he writes, "it is the job of criminologists to explore the seamy side of human existence."

The strength of his book lies in the juxtaposition of case studies in pharmaceutical corporate crime with cogent analysis of the thinking of corporate executives-analysis based on 131 interviews with corporate executives from 32 corporations in five countries. Another strong point is the 93--page concluding chapter titled "Strategies for controlling corporate crime," which overshadows all preceding attempts to define a program to control corporate criminal activity.

In this book about corporate "crime," few examples are given of successful criminal prosecutions of corporations, however. This raises the question of definition of corporate crime. Braithwaite, as an example, tells the story of the manufacturing and worldwide marketing of the tranquilizer thalidomide during the 1950s. Thalidomide's corporate parents marketed the drug as nontoxic, with no side effects, and safe for pregnant women. In fact, thalidomide poisoned nearly 8,000 babies whose mothers took the drug during pregnancy. Many of the thalidomide babies were born with no arms or legs; Braithwaite estimates that as many as 16,000 thalidomide babies died at birth.

But was the marketing of thalidomide a crime? Braithwaite points out that no successful criminal prosecution was brought against any corporate entity or executive associated with the production or marketing of the drug. In 1967, a public prosecutor in Achen, West Germany, drew up a bill of indictment charging the German manufacturer, Chemie Grunenthal, with intent to commit bodily harm and involuntary manslaughter. Grunenthal had received information from doctors conducting clinical trials about thalidomide's side effects (including giddiness, nausea, constipation, and allergic reaction) before the drug was placed on the market, yet went ahead and marketed the drug over the counter.

After more than two years of trial, the court, with the agreement of the prosecution, dropped the criminal charges and Grunenthal agreed to pay $31 million to the German thalidomide children. There was no finding of guilt or innocence.

To Braithwaite, this did not mean that the marketing of thalidomide was not a crime. Braithwaite defines corporate crime as "conduct of a corporation, or of employees acting on behalf of a corporation, which is proscribed and punishable by law"-either criminal or civil law. He points out that most of the corporate crimes discussed in the book weren't punished by law even though they were punishable.

In case after case put forth by Braithwaite - including the fraudulent testing by Richardson Merrell during the early 1960s of its anti-cholesterol drug MER/29, and by Industrial Bio Test during the late 1970s of a number of compounds; the marketing of mislabelled and defective intravenous solutions by Abbott Labs during the 1960s; and the anti-competitive activities of Pfizer, Cyanamid, Bristol, Squibb and Upjohn during the 1950s in an attempt to maintain artificially high prices for tetracycline antibiotics-one gets the clear impression that the law is not effective, or not being effectively applied to control corporate crime and violence.

In an innovative concluding chapter, Braithwaite calls for strong law enforcement to reduce corporate crime. Such rigorous enforcement can effectively deter corporate wrongdoing-both specifically (against offenders) and generally (against those who witness offenses). In addition, Braithwaite argues that the law can impose rehabilitation on corporate offenders, pointing out that rehabilitation is a more workable goal for corporate criminal law than for individual criminal law because corporation charts are more easily rearranged than the human psyche is. Braithwaite also approves of restitution to victims and reparation to the community as goals of corporate criminal law, since, as he explains, "the corporation normally has an inordinate capacity to pay." Finally, he argues that corporate criminal liability rather than individual liability imposed by the courts results in more efficient crime control.

This book is concerned with evil deeds, but not necessarily with evil men and women. In developing strategies to control corporate crime, Braithwaite sees corporate executives not as individual personalities, but as actors who assume certain roles. "The requirements of those roles are defined by the organization," Braithwaite writes, "not by the actor's personality."

The 8,000 thalidomide children have grown up today to become thalidomide adults. They are reason enough for Braithwaite's book to be read and studied seriously by multinational executives, legislators, prosecutors, victims and citizens in an effort to determine the factors that lead ordinary men and women to do extraordinary things.

Table of Contents