Other readers asked the following questions, earlier this week:
If the ongoing Congressional probe was to unearth enough evidence, or a clear smoking gun, in relation to the alleged delay in the release of the Enhance trial data what would be the next step? As a non-American, I'm not familiar with the intricacies of your legal/parliamentary system. Would the main protagonists be subpoenaed to testify before a hearing? Could they be found 'guilty' in such a forum, and if so, are there precedents for the punishments that would be forthcoming?
Congressional committees may call hearings at any time. They usually ask the witness to appear voluntarily, but the Committees -- both of the House, and the Senate -- are able to issue subpoenas to enforce these "invitations". This is almost never necessary.
The Schering executives may well be asked to testify before Congress, in advance of, and even without any "findings" -- the House, and Senate, Committees act as investigatory bodies.
A bad day of testimony -- or a bad report out of the Committee -- would be a[nother] public relations disaster for Schering-Plough. So, they'll likely cooperate (or, at least, offer the "appearance" of doing so).
The more important legal (as opposed to public relations) wrangling will likely take place in our courts -- there are over 100 lawsuits pending, many of them seeking class action certification (to act on behalf of thousands of parties), and many of them alleging RICO (racketeering) violations, securities fraud, consumer fraud and ERISA (retirement fund) violations. . . .
It is too early to tell how these will all turn out, but do check the left-margin links, of the site, for summaries of each "kind" of lawsuit/complaint, as well as a run-down on where Sen. Grassley's committee stands, and what Chairman Dingell's House Committee has been up to of late, on this score. . . .
One outcome of the Congressional hearings could be new, additional legislation, to restrict or eliminate Medicare or Medicaid reimbursement for classes of drugs not shown -- by scientific evidence -- to be an improvement over existing, lower-cost, proven therapies. Or, the Congress could decide to add to the legislative burden on advertising drugs. . . . Or, it could legislate increased "Sunshine in grant, and gift" laws, related to Pharma-sponsorship of medical associations, or doctors, or teaching hospitals -- for example. . . .
There are, in actuality, very few limits to the longer-term sorts of ways that these Congressional investigations could end badly for Schering-Plough.
And, another question, along these lines:
What will be the fine & disgorgement penalty?
Again, my answers:
Well, it will likely take a while to sort this out -- though I don't believe Schering has -- as yet -- acknowledged officially whether the SEC is investigating these matters, at all. [Personally, I strongly suspect the SEC is, based primarily on the volume, and time-of-dwell visits/hits originating from wthin the DC office of the SEC -- to this website. Wild!] That acknowlegment will likely come in the Form 10-Q for SGP, for the quarter ended March 31, 2008 -- if it comes, at all.
So all of that (fines and disgorgement) -- if it comes, at all -- is several quarters away, yet, at the earliest. . . .
I'll update this, from time to time, as developments warrant.