Spitzer warns pharmaceuticals
New York probe of industry will continue, he says
By Luisa Beltran, CBS.MarketWatch.com
Last Update: 1:06 PM ET June 28, 2004
NEW YORK (CBS.MW) -- New York Attorney General Eliot Spitzer fired off a warning shot Monday, saying his probe of pharmaceutical companies will continue.
"We are not done with our investigation," Spitzer said "Other cases will be brought. We will not let go until we feel that our point has been made."
Speaking at the annual meeting of the American Health Lawyers Association, Spitzer said he would prefer that the federal government lead enforcement in certain areas. However, if the Securities and Exchange Commission, or the Environment Protection Agency, or any other government agency fails to confront issues that affect consumers, "we will step in," he said.
Earlier this month, Spitzer sued GlaxoSmithKline (GSK: news, chart, profile), alleging that the British drug conglomerate misled U.S. doctors on the safety and effectiveness of using Paxil to treat psychiatric disorders in children.
"We are not holding the pharmaceutical industry to a higher standard," Spitzer said. "The industry should hold itself to a higher standard."
Spitzer asserted that Glaxo actively misled doctors by not giving them complete data, including negative results. He said medical journals, which routinely print positive news about drugs, were not to blame.
He also renewed his call on Washington to take more of a leadership role in being a watchdog. In his investigation of Wall Street investment banks issuing biased research, Spitzer was sharply critical of the SEC for its lack of initiative.
"We shouldn't be doing this," Spitzer said Monday of his own investigation into the pharmaceutical industry. "We would prefer to see the FDA or HHA (Department of Health and Human Services) deal with this."
Separately, Spitzer said he'll respond "in short time" to an attempt by Richard Grasso, the former head of the New York Stock Exchange, to move a lawsuit to federal court.
In May, Spitzer sued Grasso, accusing the former head of the Big Board of manipulating guidelines used to set his compensation. Grasso received a $139.5 million payout last August and left the exchange in September, amid furor over his pay package. In June, Grasso filed a motion to move the case to federal court. See full story.
Spitzer has vowed to block the attempt. "This case will be litigated in the court where it should be," he said Monday. "Let the case proceed there."
When asked if he preferred state court over federal or objected to the federal judge now hearing the issue, Spitzer said: "It doesn't matter."
"We filed in state court because it's a state court issue," he said. "We don't participate in forum shopping."
A spokesman for Grasso declined comment.
Luisa Beltran is a reporter for CBS.MarketWatch.com in New York.
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Last Updated 8/12/04