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The missing piece of information in the NY Times Giuliani/Purdue Pharma story

The New York Times's one-sided hit-piece on Rudy Giuliani's representation of Purdue Pharma omits the critical piece of information that explains the dynamic of a pharmaceutical prosecution: debarment. A federal prosecutor who wins a trial on the most severe charges against a pharmaceutical company can cost it billions and billions of dollars and drive it out of business entirely a la Arthur Andersen. And federal prosecutors know that pharmaceutical defendants will never risk trial for just that reason: even a 99% chance of success at trial makes the risk untenable. Thus every investigation into pharma in the last decade by ambitious federal prosecutors has eventually led to a plea bargain on lesser charges, and Purdue Pharma's May 2007 plea on OxyContin sales was no different. Prosecutors get a scalp and good headlines without having to risk a loss at trial, and corporate defendants pay the extortion. The word "misdemeanor" never appears in the Times article, though that was all Purdue Pharma and its executives pled to; rather, the company is treated as murderers for the drug abuse of people using (and often stealing) the drug illegally. Jonathan Rauch's 2002 Reason article is a much more balanced look at the underlying factual claims.

The abuse of criminal prosecutions of the pharmaceutical industry has essentially turned into an inefficient and de facto windfall profits tax, and, along with the lack of federal preemption in products liability, does much to explain why pharmaceutical prices are higher in the United States than elsewhere.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.