healthy4u: asbestos

Pfizer May No Longer be Able to Delay Paying Its Asbestos Claims of Nearly $1 Billion

Pfizer, which claims to be the "world's largest research-based pharmaceutical company," is one step closer to paying a nearly one billion dollar settlement of legal claims of harms due to the asbestos products it used to manufacture. Pfizer Settles - More or Less - Some of its Asbestos Liability Most people would not think of Pfizer as a producer of asbestos.  However, the back-story, as <a href="http://www.philly.com/philly/business/20130627_Drug-maker_Pfizer_fails_to_escape_costly_asbestos_case.html">reported</a> in the Philadelphia Inquirer, and as we discussed <a href="http://hcrenewal.blogspot.com/2011/01/curious-case-of-pfizers-asbestos-claims.html">here</a> in 2011, is that <blockquote class="tr_bq">Pfizer used to have a minerals, pigments and metals division and, in 1968, it bought Quigley Company Inc., which made insulation for heavy industry. Quigley's Insulag contained asbestos.</blockquote> So, <blockquote class="tr_bq">Quigley stopped production at its facility in Old Bridge, N.J., in 1992.  When it filed for bankruptcy in 2004, Quigley faced more than 160,000 lawsuits, most related to asbestos product liability.</blockquote> By apparently holding out the legal fiction that Quigley was an independent entity, Pfizer seemed to use to use the bankruptcy filing to delay making any payment of these claims, most of which likely involved illnesses due to asbestos exposure.  As the Inquirer article said, <blockquote class="tr_bq">Pfizer has spent the nine years since arguing that bankruptcy law protects it from such lawsuits.</blockquote> notwithstanding the fact that Pfizer itself is hardly bankrupt. But now, as Bloomberg reported (<a href="http://www.theday.com/article/20130627/BIZ03/306279581/1044">via</a> the New London [CT] Day), <blockquote class="tr_bq"> Pfizer Inc.'s non-operating Quigley Co. won permission to end almost nine years in bankruptcy under a plan that resolves most asbestos claims against the former insulation maker and its parent, the world's largest drugmaker. U.S. Bankruptcy Judge Stuart Bernstein in Manhattan Wednesday approved a Chapter 11 plan under which Pfizer will contribute assets worth $964 million. He rejected a prior plan almost three years ago, saying Pfizer was improperly using Quigley's bankruptcy to shield itself from asbestos claims.</blockquote> Note that Pfizer has consistently argued that it should bear no responsibility for the effects of the asbestos made by its subsidiary: <blockquote class="tr_bq">'Pfizer has never been found derivatively or directly liable for injuries allegedly caused by Quigley's asbestos- containing products,' [Pfizer spokesman Christopher] Loder said.</blockquote> <div id="r1PostCPBlock" style="background-color: white; border: medium none; color: black; left: -99999px; overflow: hidden; position: absolute; text-align: left; text-decoration: none;">Pfizer used to have a minerals, pigments and metals division and, in 1968, it bought Quigley Company Inc., which made insulation for heavy industry. Quigley's Insulag contained asbestos. Read more at <a href="http://www.philly.com/philly/business/20130627_Drug-maker_Pfizer_fails_to_escape_costly_asbestos_case.html#AltGBB8oXa8YPkAC.99" style="color: #003399;">http://www.philly.com/philly/business/20130627_Drug-maker_Pfizer_fails_to_escape_costly_asbestos_case.html#AltGBB8oXa8YPkAC.99</a></div>Furthermore, <blockquote class="tr_bq">Pfizer has said throughout the case that it never made or sold Quigley's products and it doesn't have liability for them. Asbestos, once widely used as an insulator, was later shown to cause cancer.</blockquote> Convenient Fictions This case received little notice in 2011 and is receiving little notice now, and mainly for its business implications.  Yet the reporting does suggest  dots to connect to reveal some larger hypocrisies. Dedicated to improving health and well being? Pfizer asserts <a href="http://www.pfizer.com/about/history/history.jsp">on its website</a> that it <blockquote class="tr_bq">has remained dedicated to discovering and developing new, and better, ways to prevent and treat disease and improve health and well being for people around the world.[italics added]</blockquote> Yet despite this supposed dedication to health and well-being, it has long delayed any possible compensation to people who may have acquired severe, if not fatal disease from contact with one of its products. As per Bloomberg, note the examples of <blockquote class="tr_bq">people like Brenda Hagerich, 62, of Hot Springs, Ark., may get payments on their claims. Hagerich, whose father died in 1999 of mesothelioma, said she has been waiting for a second distribution of a $125,000 payment.</blockquote> Ownership without responsibility According to current media reports,  Pfizer attorneys repeatedly contended that because Quigley was a subsidiary of Pfizer, Pfizer could not be held accountable for its actions.  Yet Pfizer owned, and presumably thus gained all revenue from and chose the leadership of Quigley.  At best, maintaining this fiction seems heartless given Pfizer's stated interest in peoples' "health and well being." Who knew asbestos was dangerous? The current reports seem to imply that Pfizer's accountability should be mitigated because at the time it acquired Quigley, no one knew that asbestos was hazardous.  The Bloomberg report stated, <blockquote class="tr_bq">Quigley made asbestos-containing products from the 1940s to the 1970s, including Insulag, a powdered insulation. Pfizer, based in New York, bought the company in 1968.</blockquote> But, <blockquote class="tr_bq">Pfizer has said throughout the case that it never made or sold Quigley's products and it doesn't have liability for them. Asbestos, once widely used as an insulator, was later shown to cause cancer.</blockquote> The last sentence implies that asbestos was only shown to cause cancer after Pfizer acquired Quigley in 1968.  However, this suggests a lack of knowledge of medical history. In fact, evidence that asbestos was dangerous would have been readily available in 1968. Pulmonary asbestosis was recognized in 1927.(1, noted in 2).  Furthermore, by 1952, as per Dr Richard Doll(3), <blockquote class="tr_bq">The majority of workers (cited by Hueper, 1952) consider that a causal relationship between asbestosis and lung cancer is either proved or is highly probable and the reality of the relationship was agreed at the recent International Symposium on the Epidemiology of Lung Cancer.</blockquote> Doll reported further data in 1954 and concluded, <blockquote class="tr_bq">lung cancer was a specific industrial hazard of certain asbestos workers....</blockquote> Summary So while Pfizer officials ought to have known that in 1968 it was acquiring a company that made products that likely caused lung cancer, for more than 40 years, they have managed to stall payments to now mainly the heirs of people who acquired severe disease due to those products.  This clearly suggests that in this matter the company leadership has consistently put its revenue ahead of its ostensible dedication to peoples' health and well being.  Then again, this is hardly the first example of dubious ethical conduct by Pfizer.  See <a href="http://hcrenewal.blogspot.com/2013/01/pfizers-pfourteenth-settlement-small.html">this post </a>for a list of the 14 legal settlements of allegations of misconduct made by Pfizer since 2000, only one of which was related to the current case. Furthermore, dedication to short-term revenue over everything else has resulted in huge wealth for Pfizer's hired managers.  <a href="http://online.wsj.com/article/BT-CO-20130314-712087.html">Per</a> the Wall Street Journal, only the latest example is, <blockquote class="tr_bq">The total 2012 compensation for Pfizer Inc. (PFE) Chief Executive Ian C. Read was valued at $25.6 million, up 2.5% from 2011, as the drug maker hit two out of three key financial objectives last year.  Mr. Read's compensation was based partly on the company exceeding targets for total revenue and adjusted earnings-per-share, while missing its target for cash flow in 2012, Pfizer said in a proxy statement filed Thursday with the U.S. Securities and Exchange Commission.</blockquote> Presumably, the total revenue target would have been a bit lower if Pfizer had managed to set aside assets to pay the asbestos related claims discussed above in 2012 rather than in 2013. This relatively <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic</a> example shows how hollow ring most of the claims by leaders of big health care organizations that they value patients' and the public's health.  That may be convenient public relations puffery, but again and again the bottom line seems to matter more to them.  We have shown numerous examples of <a href="http://hcrenewal.blogspot.com/search/label/mission-hostile%20management">mission-hostile management</a>, and of leaders <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">compensated outrageously</a> out of proportion to their contributions to patients' and the public's health.  Thus, why should health care professionals, or patients believe that anything they do puts patients ahead of money? As we have said so often, health care professionals and society at large needs to hold large health care organizations' leadership accountable for their missions, and push out leaders who put their own pocketbooks and their organizations' revenue ahead of patients' and the public's health.  References 1.  Cooke WE.  Pulmonary asbestosis.  Br Med J 1972; 2: 1024. 2.  Hasan FM, Nash G, Kazemi H. Asbestos exposure and related neoplasia: the 28 year experience of a major urban hospital.  Am J Med 1978, 65: 649-654. Link <a href="http://www.ncbi.nlm.nih.gov/pubmed/707524">here</a>. 3.  Doll R. Mortality from lung cancer in asbestos workers.  Br J Indust Med 1955; 12: 81-86.  Link <a href="http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1035472/">here</a>.

Pfizer May No Longer be Able to Delay Paying Its Asbestos Claims of Nearly $1 Billion

Pfizer, which claims to be the "world's largest research-based pharmaceutical company," is one step closer to paying a nearly ...

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The Curious Case of Pfizer's Asbestos Claims

Here is a very strange and long-running story that raises some questions about how health care organizations are lead, but seems to have bee covered only in the business press. Pfizer Goes Into the Asbestos Business (in 1968), Faced Hundreds of Thousands of Lawsuits (in the 1980s), Promised to Settle (in 2004) Here is the background, per a 2004 report by the Associated Press, <a href="http://www.foxnews.com/story/0,2933,131403,00.html">per Fox News</a>: <blockquote>Pfizer Inc. (PFE) Friday said it has agreed to pay $430 million to settle all lawsuits against it alleging injury from insulation products made by a subsidiary. Pfizer and its Quigley Co. subsidiary were named, along with several other defendants, in 171,611 lawsuits claiming personal injury caused by exposure to asbestos, silica or mixed dust. Pfizer acquired Quigley Co. in 1968. It sold some products containing asbestos until the early 1970s. Pfizer will establish a trust for the payment of pending claims as well as any future claims. It will contribute $405 million to the trust over 40 years through a note, and about $100 million in insurance. Pfizer will also forgive a $30 million loan to Quigley. Since 1982, Quigley's main business has been to manage the asbestos lawsuits. As part of the settlement, Quigley will file for Chapter 11 bankruptcy. Its reorganization plan must be approved by the bankruptcy court and confirmed by a vote of 75 percent of the claimants.</blockquote>That seems like the end of a long story, but it was not. Bankruptcy Proceedings Go On Through 2009, No Claims Paid By 2009, nothing had really been settled. Apparently, the bankruptcy of Pfizer's subsidiary, which was set up as if Quigley was an independent corporation, had not resulted in any resolution to the multiple lawsuits and the large claims. As reported in December, 2009, <a href="http://www.bloomberg.com/apps/news?pid=newsarchive&sid=adh2buROlUfg">by Bloomberg</a>: <blockquote>At issue in the trial is whether Quigley, a former maker of asbestos-containing products, can confirm a plan of reorganization, ending more than five years in bankruptcy. The trial pits the U.S. government and asbestos victims against Pfizer, the world’s biggest drugmaker, with claims that its $450 million contribution under a settlement isn’t enough to satisfy its liabilities. </blockquote>At the trial, the lawyer for the asbestos victims claimed that Pfizer was using the bankruptcy of its subsidiary to avoid liability: <blockquote>Edward Weisfelner, a lawyer for an ad hoc group of so- called asbestos victims that represents 30,000 individuals, told Bernstein today that the plan can’t be confirmed because the purpose of the bankruptcy law being used to channel asbestos claims is to 'scrub' a viable company of liabilities. Under bankruptcy law, courts shouldn’t approve Chapter 11 reorganizations where the primary purpose is to shield a third party, such as Pfizer, Weisfelner said. 'Courts are instructed to avoid the possibility that parties use bankruptcy to protect a third party that’s not submitting itself to the jurisdiction of the court, and that’s exactly what’s going on in this case,' Weisfelner said. </blockquote>The US government also objected to what Pfizer was doing: <blockquote>Opposition to the plan also comes from the U.S. Trustee, an arm of the Justice Department that monitors bankruptcies, which has said was improperly orchestrated to shield the drugmaker from liability. </blockquote>t the time, Pfizer (through its Quigley subsidiary) also was attempting to keep the whole thing quiet, but not successfully: <blockquote>The U.S. Trustee has fought to keep the trial open to the public, and said in court documents that some of Quigley’s requests to keep information confidential failed to meet legal standards for protecting 'commercial' information. </blockquote>Of course, at that time, the opinions of the plaintiffs' lawyer and the US Trustee were just that, opinions. By 2010, Judge Found that Pfizer "Manipulated" the Bankruptcy But by September, 2010, <a href="http://www.bloomberg.com/news/2010-09-08/pfizer-s-quigley-unit-is-denied-permission-to-exit-bankruptcy-by-judge.html">according to Bloomberg then</a>: <blockquote>Pfizer Inc.’s Quigley unit, a former asbestos maker, was denied permission to exit bankruptcy by a judge who found the world’s largest drug company manipulated the bankruptcy process to benefit itself. U.S. Bankruptcy Judge Stuart M. Bernstein in New York today rejected Quigley’s fourth reorganization plan and said parties should discuss dismissal of the case. He said the plan was filed in 'bad faith' by Pfizer and cited testimony that asbestos claims directed at Quigley could total $4.45 billion over the next 42 years. </blockquote>No Progress by the End of 2010 Apparently despite the judge's opinion, the case still remained tied up in court. By December, 2010, no progress had been made. <a href="http://www.businessweek.com/news/2010-12-27/pfizer-s-quigley-unit-bankruptcy-should-end-u-s-says.html">According to Bloomberg then</a>: <blockquote>Pfizer Inc., the world’s largest drug company, should have the bankruptcy of its Quigley unit which has protected it from asbestos-related health problems since 2004 dismissed, lawyers for the U.S. Trustee said. While the bankruptcy has been pending, creditors with alleged asbestos-related health problems have been unable to sue New York-based Pfizer, and many have died, wrote lawyers for the U.S. Trustee, an arm of the Justice Department that oversees bankruptcy. A hearing to decide the U.S. Trustee’s request is set for Jan. 13, according to court papers filed Dec. 23. 'The harm in delaying the inevitable dismissal of this case is to the individuals who have filed asbestos claims against the Debtor and Pfizer,' lawyers for acting U.S. Trustee Tracy Hope Davis wrote in court papers. 'For some of those individuals, time may be of the essence.'</blockquote>So Pfizer had stalled for so long that some of the plaintiffs had died off. Summary So let us summarize. For reasons that are unclear, Pfizer Inc, primarily a pharmaceutical company, bought out a company that made asbestos products in 1968. The health hazards of asbestos were soon recognized, and many people filed lawsuits against Pfizer's subsidiary, alleging they had been harmed. Pfizer promised to settle the matter in 2004, about 30 years since the exposures occurred. Yet by setting up a bankruptcy of its subsidiary as if it were an independent company, Pfizer stalled any resolution of the case for at least another six years, using what a Judge termed "manipulation." Now it is 2011, and the cases are still unresolved. So for a company that <a href="http://www.pfizer.com/about/">claims</a> it is <blockquote>committed to applying science and our global resources to improve health and well-being at every stage of life.</blockquote>and boasts <blockquote>Pfizer Inc: Working Together for a Healthier World</blockquote>This does not look good. So question number one is should not the leaders of a company whose main business is ostensibly making people healthier be more sensitive to claims about the health effects of its products? Specifically, why did Pfizer's leaders not try to more speedily come up with a cleaner and more timely solution to this problem that would appear more sensitive to the health problems of the claimants? It would be interesting if Pfizer's top leaders were to try to answer that question. My policy observation is now familiar.  As we have <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">said before</a>, far too often the leaders of not-for-profit health care institutions seem more interested in padding their own bottom lines than upholding the institutions' missions. They often seem entirely unaware of their duty to put those missions ahead of their own self-interest. Like the financial services sector in the era of "greed is good," health care too often seems run by <a href="http://hcrenewal.blogspot.com/2009/12/compensation-madness-insiders-hijacking.html">"insiders hijacking established institutions for their personal benefit."</a> True health care reform would encourage leadership of health care who understand health care and care about its mission, rather than those who see a quick way to make a small fortune.

The Curious Case of Pfizer's Asbestos Claims

Here is a very strange and long-running story that raises some questions about how health care organizations are lead, but seems to have bee...

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