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Volumn 41, Issue 3, 2013, Pages 611-619

Understanding pharmaceutical research manipulation in the context of accounting manipulation

Author keywords

[No Author keywords available]

Indexed keywords

ACCOUNTING; ARTICLE; DRUG INDUSTRY; ECONOMICS; ETHICS; HUMAN; LEGAL ASPECT; LEGAL LIABILITY; MEDICAL RESEARCH; PERSONNEL; PUBLICATION; RESEARCH ETHICS; SCIENTIFIC MISCONDUCT;

EID: 84885168528     PISSN: 10731105     EISSN: 1748720X     Source Type: Journal    
DOI: 10.1111/jlme.12070     Document Type: Article
Times cited : (17)

References (29)
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    • (2013) Journal of Law, Medicine, & Ethics , vol.41 , Issue.3 , pp. 644-653
    • Cosgrove, L.1    Wheeler, E.E.2
  • 2
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    • "Patient Advocacy Organizations: Institutional Conflicts of Interest, Trust, and Trustworthiness,"
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    • (2013) Journal of Law, Medicine & Ethics , vol.41 , Issue.3 , pp. 680-679
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  • 3
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    • "Institutional Corruption of Pharmaceuticals and the Myth of Safe and Effective Drugs,"
    • D. W. Light, J. Lexchin, and J. Darrow, "Institutional Corruption of Pharmaceuticals and the Myth of Safe and Effective Drugs, " Journal of Law, Medicine & Ethics 41, no. 3 (2013): 590-600.
    • (2013) Journal of Law, Medicine & Ethics , vol.41 , Issue.3 , pp. 590-600
    • Light, D.W.1    Lexchin, J.2    Darrow, J.3
  • 4
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    • "Key Opinion Leaders and the Corruption of Medical Knowledge: What the Sunshine Act Will and Won't Cast Light On,"
    • M. Rodwin, quot;Five Un-Easy Pieces to Pharmaceutical Policy Reform,"Journal of Law, Medicine & Ethics 41, no. 3 (2013): 581-589.
    • S. Sismondo, "Key Opinion Leaders and the Corruption of Medical Knowledge: What the Sunshine Act Will and Won't Cast Light On, " Journal of Law, Medicine & Ethics 41, no. 3 (2013): 635-643; M. Rodwin, "Five Un-Easy Pieces to Pharmaceutical Policy Reform, "Journal of Law, Medicine & Ethics 41, no. 3 (2013): 581-589.
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    • Sismondo, S.1
  • 5
    • 84864294287 scopus 로고    scopus 로고
    • This approach is similar to the one taken by Brown and Klerman in assessing the problems faced by the government program evaluation in the light of what we know about how auditors have grappled with their role. See A. B. Brown and J. A. Klerman, quot;Independent Evaluation: Insights from Public Accounting,"Evaluation Review 36, no. 3 (2012): 186-219.
    • This approach is similar to the one taken by Brown and Klerman in assessing the problems faced by the government program evaluation in the light of what we know about how auditors have grappled with their role. See A. B. Brown and J. A. Klerman, "Independent Evaluation: Insights from Public Accounting, "Evaluation Review 36, no. 3 (2012): 186-219.
  • 6
    • 84885169933 scopus 로고    scopus 로고
    • There are two main approaches to accounting: accrual and cash accounting. Cash accounting books revenue and expenses when cash is exchanged in a system that is simpler and more concrete than accrual accounting but that does not reflect the underlying economics of decisions and transactions. Accrual accounting attempts to reflect the full value of a transaction, both its costs and its benefits, all at once. This provides more economically meaningful information but requires far more judgment and estimation, since some of the costs or benefits may not yet have been incurred.
    • There are two main approaches to accounting: accrual and cash accounting. Cash accounting books revenue and expenses when cash is exchanged in a system that is simpler and more concrete than accrual accounting but that does not reflect the underlying economics of decisions and transactions. Accrual accounting attempts to reflect the full value of a transaction, both its costs and its benefits, all at once. This provides more economically meaningful information but requires far more judgment and estimation, since some of the costs or benefits may not yet have been incurred.
  • 7
    • 84885086294 scopus 로고    scopus 로고
    • Cuomo v. Ernst & Young Complaint Re Lehman Brothers Repo 105.
    • Cuomo v. Ernst & Young Complaint Re Lehman Brothers Repo 105.
  • 8
    • 84885162082 scopus 로고    scopus 로고
    • U.S. Government Accountability Office, Drug Pricing: Research on Savings from Generic Drug Use GAO-12-371R (2012).
    • U.S. Government Accountability Office, Drug Pricing: Research on Savings from Generic Drug Use GAO-12-371R (2012).
  • 9
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    • Actual awards can vary significantly in either direction, depending on whether the company and executive met or exceeded various performance targets.
    • Actual awards can vary significantly in either direction, depending on whether the company and executive met or exceeded various performance targets.
  • 10
    • 84885124666 scopus 로고    scopus 로고
    • Merck, quot;Proxy Statement, April 12, 2012," at 29, available at(last visited June 6, 2013).
    • Merck, "Proxy Statement, April 12, 2012, " at 29, available at (last visited June 6, 2013).
  • 11
    • 4344660218 scopus 로고    scopus 로고
    • Cumulative Abnormal Returns are the standard measure of stock price changes within a brief window of time that can be attributed to a specific news event, such as the announcement of FDA approval or rejection of a drug application, as opposed to changes from more general market movements. See A. Sharma and N. Lacey, quot;Linking Product Development Outcomes to Market Valuation of the Firm: The Case of the U.S. Pharmaceutical Industry,"Journal of Product Innovation Management 21, no. 5 (2004): 297-308. Estimates are rounded to the closest percentage point.
    • Cumulative Abnormal Returns are the standard measure of stock price changes within a brief window of time that can be attributed to a specific news event, such as the announcement of FDA approval or rejection of a drug application, as opposed to changes from more general market movements. See A. Sharma and N. Lacey, "Linking Product Development Outcomes to Market Valuation of the Firm: The Case of the U.S. Pharmaceutical Industry, "Journal of Product Innovation Management 21, no. 5 (2004): 297-308. Estimates are rounded to the closest percentage point.
  • 12
    • 84885151384 scopus 로고    scopus 로고
    • "Curbing Misconduct in the Pharmaceutical Industry: Insights from Behavioral Ethics and Behavioral Law and Economics,"
    • Y. Feldman, R. Gauthier, and T. Schuller, "Curbing Misconduct in the Pharmaceutical Industry: Insights from Behavioral Ethics and Behavioral Law and Economics, " Journal of Law, Medicine & Ethics 41, no. 3 (2013): 620-628.
    • (2013) Journal of Law, Medicine & Ethics , vol.41 , Issue.3 , pp. 620-628
    • Feldman, Y.1    Gauthier, R.2    Schuller, T.3
  • 13
    • 84885132369 scopus 로고    scopus 로고
    • "Rooting Out Institutional Corruption to Manage Inappropriate Off-Label Drug Use,"
    • M. A. Rodwin, "Rooting Out Institutional Corruption to Manage Inappropriate Off-Label Drug Use, " Journal of Law, Medicine & Ethics 41, no. 3 (2013): 654-664.
    • (2013) Journal of Law, Medicine & Ethics , vol.41 , Issue.3 , pp. 654-664
    • Rodwin, M.A.1
  • 14
    • 34848847826 scopus 로고    scopus 로고
    • "Ghost Management: How Much of the Medical Literature Is Shaped Behind the Scenes by the Pharmaceutical Industry?"
    • S. Sismondo, "Ghost Management: How Much of the Medical Literature Is Shaped Behind the Scenes by the Pharmaceutical Industry?" PLoS Medicine 4, no. 9 (2007): 1429-1433.
    • (2007) PLoS Medicine , vol.4 , Issue.9 , pp. 1429-1433
    • Sismondo, S.1
  • 15
    • 37049011365 scopus 로고    scopus 로고
    • "Auditor Independence, Incomplete Contracts and the Role of Legal Liability,"
    • D. Acemoglu and M. B. Gietzmann, "Auditor Independence, Incomplete Contracts and the Role of Legal Liability, " European Accounting Review 6, no. 3 (1997): 355-375.
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    • Acemoglu, D.1    Gietzmann, M.B.2
  • 16
    • 84865701045 scopus 로고    scopus 로고
    • The trial registry at clinicaltrials.gov is an attempt to create consequences for pharmaceutical companies that bury unfavorable trial results. It does not yet appear to have a strong effect on behavior, in part because compliance with trial registry is spotty. See M. A. Rodwin and J. D. Abramson, quot;Clinical Trial Data as a Public Good,"JAMA 308, no. 9 (2012): 871-872.
    • The trial registry at clinicaltrials.gov is an attempt to create consequences for pharmaceutical companies that bury unfavorable trial results. It does not yet appear to have a strong effect on behavior, in part because compliance with trial registry is spotty. See M. A. Rodwin and J. D. Abramson, "Clinical Trial Data as a Public Good, "JAMA 308, no. 9 (2012): 871-872.
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    • 0000775279 scopus 로고
    • "Auditing Standards, Legal Liability, and Auditor Wealth,"
    • R. A. Dye, "Auditing Standards, Legal Liability, and Auditor Wealth, " Journal of Political Economy 101, no. 5 (1993): 887-914.
    • (1993) Journal of Political Economy , vol.101 , Issue.5 , pp. 887-914
    • Dye, R.A.1
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    • "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism,"
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  • 20
    • 84885113056 scopus 로고    scopus 로고
    • We saw how reputation failed to constrain credit rating agencies in the financial crisis, even though it is now common knowledge that their ratings were useless for many of the mortgage-backed securities that were the trigger for the financial crisis. Reputation is less straightforward than much of the literature on the topic assumes. See, for example, F. Partnoy, quot;The Siskel and Ebert of Financial Markets?: Two Thumbs Down for the Credit Rating Agencies,"Washington University Law Quarterly 77, no. 3 (1999): 619-712; and A. B. Brown, quot;Effect of Market Structure and the Regulatory Franchise in Reputation-Dependent Industries," paper presented at the 10th Annual International Industrial Organization Conference, Arlington, VA, March 17, 2012.
    • We saw how reputation failed to constrain credit rating agencies in the financial crisis, even though it is now common knowledge that their ratings were useless for many of the mortgage-backed securities that were the trigger for the financial crisis. Reputation is less straightforward than much of the literature on the topic assumes. See, for example, F. Partnoy, "The Siskel and Ebert of Financial Markets?: Two Thumbs Down for the Credit Rating Agencies, "Washington University Law Quarterly 77, no. 3 (1999): 619-712; and A. B. Brown, "Effect of Market Structure and the Regulatory Franchise in Reputation-Dependent Industries, " paper presented at the 10th Annual International Industrial Organization Conference, Arlington, VA, March 17, 2012.
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    • see also Dye, supra note 16.
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    • 80052336732 scopus 로고    scopus 로고
    • For proposed legal remedies, see V. Swaminathan and M. Avery, quot;FDA Enforcement of Criminal Liability for Clinical Investigator Fraud,"Hastings Science & Technology Law Journal 4, no. 2 (2012): 325-356; and S. Stern and T. Lemmens, quot;Legal Remedies for Medical Ghostwriting: Imposing Fraud Liability on Guest Authors of Ghostwritten Articles,"PLoS Medicine 8, no. 8 (2011): 1-5.
    • For proposed legal remedies, see V. Swaminathan and M. Avery, "FDA Enforcement of Criminal Liability for Clinical Investigator Fraud, "Hastings Science & Technology Law Journal 4, no. 2 (2012): 325-356; and S. Stern and T. Lemmens, "Legal Remedies for Medical Ghostwriting: Imposing Fraud Liability on Guest Authors of Ghostwritten Articles, "PLoS Medicine 8, no. 8 (2011): 1-5.
  • 24
    • 84885098366 scopus 로고    scopus 로고
    • For a comprehensive review of proposals along this spectrum, see M. A. Rodwin, quot;Independent Clinical Trials to Test Drugs: The Neglected Reform,"Saint Louis University Journal of Health Law & Policy 6, no. 1 (2013): 113-265. See also, S. Sismondo, supra note 4.
    • For a comprehensive review of proposals along this spectrum, see M. A. Rodwin, "Independent Clinical Trials to Test Drugs: The Neglected Reform, "Saint Louis University Journal of Health Law & Policy 6, no. 1 (2013): 113-265. See also, S. Sismondo, supra note 4.
  • 25
    • 84885171256 scopus 로고    scopus 로고
    • H. R. 4173 § 922.
    • H. R. 4173 § 922.
  • 26
    • 84885130989 scopus 로고    scopus 로고
    • Matrixx Initiatives, Inc. v. Siracusano, No. 09-1156, 563 U.S. -- (decided March 22, 2011) established that adverse information about a pharmaceutical product could constitute a material event requiring disclosure to shareholders. For an example of current litigation along these lines, see In re Merck & Co., Inc. Securities Litigation; Id. Pages 90-166 detail the connections between Merck's distortion of the medical research and materially false and misleading statements relevant to shareholders.
    • Matrixx Initiatives, Inc. v. Siracusano, No. 09-1156, 563 U.S. -- (decided March 22, 2011) established that adverse information about a pharmaceutical product could constitute a material event requiring disclosure to shareholders. For an example of current litigation along these lines, see In re Merck & Co., Inc. Securities Litigation; Id. Pages 90-166 detail the connections between Merck's distortion of the medical research and materially false and misleading statements relevant to shareholders.
  • 27
    • 84885132046 scopus 로고    scopus 로고
    • Unaware of each other, Dan Kahan posted a similar idea for psychology research on his "Cultural Cognition Project Blog" at the same time as this paper was drafted. See D. Kahan, quot;Likelihood ff 1 Journal (LRff1), The Cultural Cognition Project,"available at (last visited April 1, 2013).
    • Unaware of each other, Dan Kahan posted a similar idea for psychology research on his "Cultural Cognition Project Blog" at the same time as this paper was drafted. See D. Kahan, "Likelihood ff 1 Journal (LRff1), The Cultural Cognition Project, "available at (last visited April 1, 2013).
  • 28
    • 84885162703 scopus 로고    scopus 로고
    • The second-stage reviewers would hopefully be the same people as in the first stage. If not, the new reviewers should be provided with the protocol and all previous reviewer comments.
    • The second-stage reviewers would hopefully be the same people as in the first stage. If not, the new reviewers should be provided with the protocol and all previous reviewer comments.
  • 29
    • 84885101333 scopus 로고    scopus 로고
    • Insurance could be mandatory or voluntary, as long as patent protection is equal or longer for the insured trials. If patent lengths are shortened across the board to cover the cost of the program, then pharmaceutical companies may be particularly eager to participate.
    • Insurance could be mandatory or voluntary, as long as patent protection is equal or longer for the insured trials. If patent lengths are shortened across the board to cover the cost of the program, then pharmaceutical companies may be particularly eager to participate.


* 이 정보는 Elsevier사의 SCOPUS DB에서 KISTI가 분석하여 추출한 것입니다.