All posts by Michael Bezilla

Health & Medicine

Enforcing Big Pharma’s integrity

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Katrice Bridges Copeland once worked as an attorney in Washington, D.C., defending pharmaceutical companies in fraud cases. The experience was an eye-opener. Now she teaches white-collar criminal law at Penn State’s Dickinson School of Law, where her research targets illegal marketing practices by the pharmaceutical industry. Most of the illegalities stem from off-label marketing of prescription medications. Such uses constitute fraud because companies receive government reimbursements for those drugs even though the purposes are not FDA-approved.

Copeland maintains that federal deterrents against such practices are ineffective, and she offers some solutions that she says will help solve the problem. The government pays out a whopping $60 billion a year in Medicare and Medicaid reimbursements to drug companies, so what she has to say is getting national attention. See a recent USA Today story, for example.

What usually happens, Copeland explains, is that the government launches an intense investigation of a drug company’s alleged violations, the company admits guilt and pays a fine—and then becomes a repeat offender. Another investigation and fine may follow, but the fines are often outweighed by the increased profits that accrue from the illegal practices.

The government is generally unwilling to pursue pharmaceutical manufacturers through the courts because as the law stands now, conviction means excluding a company from receiving any Medicare and Medicaid reimbursements for any of its drugs. That would seriously harm innocent parties: shareholders, employees, and patients who are prescribed any of the company’s drugs. (Patients would have to pay for their medications from their own pockets.)

Copeland suggests several solutions to the problem, including holding corporate officers who participate in illegal practices criminally liable, and removing only the drug in question from Medicare and Medicaid reimbursement. Innocent third parties would be shielded from the devastating consequences of having all the company’s pharmaceuticals excluded.

Copeland explains in this brief Penn State Law video what prompted her research. Her recent paper, “Enforcing Integrity” offers more details about her proposed solutions.

Society & Culture

Do students value an easy A?

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Do students typically gravitate toward college courses that are more likely to yield an “easy A, ” instead of taking more difficult classes that will make greater demands on their time without the assurance of a high grade?  Also, in their subsequent course evaluations, do students who take the so-called easy classes rate them higher and the tough ones correspondingly lower?

An interdisciplinary team of Penn State researchers, including faculty from the College of Agricultural Sciences and the Penn State World Campus, decided to find out, aiming to “help inform how we approach course preparation and teaching,” according to Lawrence Ragan, World Campus director of faculty development.

The researchers recently surveyed a group of University Park campus students to see what these students really value in their courses, including the single best predictor of how much liked or disliked a course.

A news story highlights what they found. You can download more detailed reports of their findings at the team’s Schreyer Institute site.

Society & Culture

The mall is on fire!

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We need a better way to help the banking industry and its regulators make decisions based on sound information and avert another near-collapse of global financial system, says John Lietchy, marketing professor in Penn State’s Smeal College of Business, in the April 12 issue of Nature.

To make his point more understandable to the non-specialist, Liechty compares the global financial system to a shopping mall that requires customers to buy tickets in order to enter and exit the mall. A statistical model can be built to track and predict door traffic – when and where and how many shoppers enter and exit the mall. But what happens if a store in the mall catches fire and shoppers rush for the exits and the ticket-takers are overwhelmed? A fire in the mall, Liechty says, is analogous to a credit-confidence crisis, when banks are unwilling to make loans or accept collateral in exchange for securing debts.

The models now in use, he says, are fine for measuring risk when financial markets act conventionally, i.e., when the mall is operating normally. But current models lack crucial data — about the interconnectivity between financial houses, for example, and the capacity of markets to execute trades — that undermines their reliability in times of crisis, i.e., when the mall catches fire.

The question is, can new scientific models be constructed that predict shopper behavior (how banks and other financiers will act) when a fire (a credit-confidence crisis) breaks out? Liechty offers some interesting thoughts.

Liechty knows his way around banks and their regulators. The Office of Financial Research, a new federal oversight agency established by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, grew from an idea that he outlined at a February 2009 conference on financial risk.