Dear Mr. Berko: I won’t own stock in companies that sell guns, sell tobacco, sell liquor, poison the environment or cheat the American public as banks and health insurance companies have. My stockbroker recommended that I buy 300 shares of Pfizer. But I don’t want to invest in a pharmaceutical company that is being sued for hundreds of millions of dollars because it hurts and deceives people. He says I am “being stupid.” We have disagreed over this frequently. Please give me your thoughts.
— L.N., Wilmington, N.C.
Dear L.N.: Your broker recommended a supercalifragilistic stock. Most industries in which government money is involved — banking, defense, construction, Social Security, Medicaid and Medicare — are rife with heisters. That’s life; get used to it.
We have tons of fraud, graft, artifice, embezzlement and flimflammers among doctors, hospitals, nursing homes and the pharmaceutical industry. It’s as natural as rain and as normal as sunshine. In 2017, Americans spent $3.6 trillion on health care, and that amount should grow by 7.4 percent annually over the coming decade. According to the Rand Corp., over $98 billion of our annual health care spending was prosecutable last year. That $98 billion would buy enough marshmallows to fill Yankee Stadium 48 times over.
Meanwhile, Pfizer’s (PFE-$35.50) missteps are small beans. In 2016, PFE agreed to a $785 million fraud settlement, claiming that between 2001 and 2008, it overcharged Medicaid for its acid reflux drug Protonix. In 2009, PFE paid $2.3 billion to settle criminal allegations that it had illegally marketed a painkiller called Bextra, which effectively and quickly relieves most arthritis pain. And in 2004, PFE paid $392 million because of excessive charges to Medicare and Medicaid for Neurontin, a highly effective anti-seizure drug.
