An Unapproved Use of Government

     The 2.2 billion dollar lawsuit, where the U.S. government is accusing Johnson & Johnson of over-marketing medicines, (including their drug, Risperdal) is completely misguided.  The government's only possible grounds for prosecution is in response to fraud, such as false claims concerning medical effects of some of (JNJ)'s products.

But, the lawsuit raises several questions:

(1) Were false claims made by the entire company, or a few individuals?
(2) How is a fine in the billions justified for this type of possible offense?
(3) Should shareholders have to pay for fines that punish them despite a complete lack of knowledge of any possible wrongdoing?
(4) Why is so much of the penalty going to the government officials who are prosecuting the case?

I see this whole fiasco as an "unapproved use of government".  I wrote a blog years ago that philosophically analyzed the issue of fraud and its relation to government prosecution.  The concrete example I used was Martha Stewart and the way government unjustly subjected her to jail for the fraud of a handful of employees in her giant business.  What I discovered was the "fraud prosecutor's principle", which is:

The bigger the business, the more lenient the prosecution of fraud.

The reason why this is so important is that a business executive who manages 10,000 employees should not (and cannot) be as responsible for a team of 10 rogue employees committing fraud, as a business executive of a small company of 100 total employees.

Having leveled American health insurance corporations, Obama has begun to move on to pharmaceutical companies.  Have your lawyers and business bodyguard intellectuals (like me) ready.

Please note that I did not defend Johnson & Johnson out of any kind of submission to the value of Risperdal, as Eli Lilly & Co.'s Zyprexa is much better.  However, I will admit that there was a time, before I had discovered Zyprexa, when I thought that (JNJ)'s Risperdal was the best option I had.

Paul Wharton
Objectivist Capitalist Medicine Promoter

Special thanks to Eli Lilly & Co. (LLY) for being the fuel of my mind