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Consumer Bureau’s Announcement Is a Crucial Step to Restoring Consumers’ Rights, but Agency Work Is Not Done

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lisa-gilbert-pcStatement of Lisa Gilbert, Director, Public Citizen’s Congress Watch Division

Note: Today, the U.S. Consumer Financial Protection Bureau (CFPB) is announcing recommendations to address forced arbitration clauses in consumer financial contracts. The agency suggests eliminating class-action bans from contracts but proposes only to gather information about forced arbitration clauses that apply to individual consumers.

Today’s announcement puts consumers one step closer to holding corporations accountable for wrongdoing. But the Consumer Financial Protection Bureau missed an opportunity to more fully protect people from unscrupulous companies that block their customers from going to court.

Here’s what’s great about the announcement: The agency proposes to eliminate class-actions bans from consumer contracts. These clauses prevent wronged consumers – typically those who have been cheated out of small amounts of money – from banding together to take a corporation to court as a group. Often, this is the only means people have to recoup their losses. Class actions also prod companies to reform unsavory business practices.

Here’s what’s disappointing: The agency is not proposing to ban forced arbitration clauses – dangerous clauses buried in the fine print of contracts that take away our right to go to court if harmed by corporate bad actors. Consumers encounter these clauses when signing a contract of employment, buying a cell phone or receiving a loan for a new car—and the take-it-or-leave-it terms give them no choice but to sign away their rights. In an arbitration proceeding, there is no publicly accountable judge or jury, and there is no right to an appeal. The arbitrators do not have to follow the facts or the law, and there is no public review of decisions to ensure the arbitrators got it right.

Rather than eliminate these pernicious clauses, the agency proposes gathering information about them. But the CFPB has all the data it needs. For several years, it studied arbitration clauses and the harm they cause consumers. The agency found that tens of millions of consumers are restricted by arbitration clauses. It confirmed that the main impact of forced arbitration is to stop most injured consumers from getting any relief at all.

We urge the agency to look at the data it has and act now to protect consumers from forced arbitration.

Eleventh Hour TPP Deal on Biotech Drugs Still Harms Access to Medications, May Increase Ire Over TPP in Congress

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peter-maybarduk-public-citizenStatement of Peter Maybarduk, Director, Public Citizen’s Access to Medicines Program

The deal brokered today by the U.S. Trade Representative (USTR) and the Australian government on biotech drugs, which supposedly paved the way for an overall “deal in principle” for the Trans-Pacific Partnership (TPP), fell short of Big Pharma’s most extreme demands but will contribute to preventable suffering and death. The final deal as reported does not seem to adhere to the “May 10th 2007 Agreement” standard on access to affordable medicines and could complicate any eventual final TPP deal’s prospects in the U.S. Congress. In biologics and other areas, TPP rules would expand monopoly protections for the pharmaceutical industry at the expense of people’s access to affordable medicines. (The May 10th Agreement was brokered in 2007 between Democratic congressional leadership and the Bush administration to begin to reduce the negative consequences of U.S.-negotiated trade agreements, for health, the environment and labor.)

In recent days, monopoly periods for biologics, which are medical products derived from living organisms and include many new and forthcoming cancer treatments, became the most controversial issue in the attempt to conclude a TPP. The highly technical and confusing biologics deal appears to not guarantee Big Pharma the minimum eight-year automatic monopolies that industry has taken for granted as an eventual TPP outcome. According to informed sources, countries could limit automatic biologics exclusivity to not more than five years, at which point affordable biosimilars could enter the market. (Biologics exclusivity is separate from and independent of patent protection, though the protections may overlap.) Yet the deal also includes mechanisms that would help the USTR browbeat countries, now and in the future, to get what Big Pharma wants, and pull countries toward longer monopoly periods.

This week, U.S. Rep. Sander Levin made clear that May 10 agreement limits exclusivity to five years, with a “concurrent period” mechanism to ensure faster access that is not present in the TPP biologics deal. Several other TPP rules, including those relating to patent term extensions, linkage and evergreening, go beyond the limits of the May 10th Agreement. In late July, 11 of the 28 Democrats who voted for Fast Track legislation warned in a letter that the TPP could fail in Congress if it did not adhere to the May 10 standard with respect to access to medicines.

With respect to other issues in the TPP’s Intellectual Property Chapter, the transition periods before developing countries must meet all of the TPP’s protections for pharmaceutical corporations and possible exceptions to those rules are not sufficient to protect access to medicines. Transition periods will be very short and apply to only a few of the most harmful rules. Exceptions will be limited to very few rules or countries. Within a few years, most, if not all, harmful TPP rules will apply to all countries.

Controversies over pharmaceuticals and intellectual property, including frequently unanimous resistance from negotiating countries, have held up the TPP for years. Many courageous negotiators and others from developing countries stood up to industry and USTR pressure, consistently, to protect their people’s health. A number of harmful rules were eliminated from TPP proposals as a result of this work.

Yet the Obama administration showed itself willing to risk its entire trade agenda to satisfy the avarice of the pharmaceutical lobby. In that respect, people everywhere trying to understand why medicine prices are so high find a disheartening answer in the TPP negotiations: The pharmaceutical industry has purchased tremendous influence with political leaders.

General Motors Should Be Prosecuted, Not Protected

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RobertWeissman1Statement of Robert Weissman, President, Public Citizen

Note: Today General Motors Co. (GM) agreed to pay $900 million and enter a deferred prosecution agreement to end a U.S. Department of Justice criminal investigation into its handling of defective ignition switches in many of its vehicles.

Shame on the Department of Justice and shame on its prosecutors. Instead of advancing justice, they have compounded the damage inflicted on those injured and killed by GM’s wrongdoing, and on their families.

This deal will not deter future corporate wrongdoers, it will not hold GM accountable and it sets back the demand for justice by the family members of victims of GM’s horrible actions.

It is unconscionable that a giant corporation can conceal information about deadly safety defects for a decade, be responsible for the deaths of more than 100 people as a result and escape any criminal liability based only on a corporate fine and a promise not to do wrong again in the future. It is equally unconscionable that none of the executives inside General Motors responsible for this disaster are going to be held criminally accountable, as now appears to be the case.

Congress must establish that it is a crime for corporate officers to knowingly conceal serious dangers that lead to consumer or worker deaths or injuries. The Hide No Harm Act introduced last Congress by U.S. Sens. Richard Blumenthal and Bob Casey would do just that, and we look forward to supporting it when it is reintroduced.

Senate Should Reject President’s Nominee to Be the Next FDA Commissioner

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Dr. Michael CaromeStatement of Dr. Michael Carome, Director, Public Citizen’s Health Research Group

The Senate should reject President Barack Obama’s nomination of Dr. Robert Califf to be the next commissioner of the U.S. Food and Drug Administration (FDA). His nomination undoubtedly comes as welcome news to the pharmaceutical and medical device manufacturers, but is bad news for patients and public health.

During his tenure at Duke University, Califf racked up a long history of extensive financial ties to multiple drug and medical device companies, including Amgen, AstraZeneca, Eli Lilly, Johnson & Johnson, Merck Sharp & Dohme and Sanofi-Aventis, to name a few. Strikingly, no FDA commissioner has had such close financial relationships with industries regulated by the agency prior to being appointed.

Califf’s appointment as FDA commissioner would accelerate a decades-long trend in which agency leadership too often makes decisions that are aligned more with the interests of industry, rather than those of public health and patients.

The Senate should reject Califf and demand that the president nominate someone who has not been so closely connected to FDA-regulated industries and is therefore better suited to protect public health.

Journey for Justice: An Inspiration

RobertWeissman1Statement of Robert Weissman, President, Public Citizen

“Inspiring” is the word that best sums up the Journey for Justice, a march that began in Selma, Ala., and ends this week in Washington, D.C.

Marchers have chanted, waved signs and, above all, kept walking – some of them along the entire 1,000-mile path of the march. They have done so in the name of justice and democracy, to call attention to economic inequality, the dire need for criminal justice reform, the appalling rollback of voting rights and the critical need for education reform.

Today, they will descend on the Capitol to deliver a message to lawmakers: “Our lives, our votes, our jobs and our schools matter.” They are advancing an agenda that aims to protect the right of every American to a fair criminal justice system, uncorrupted and unfettered access to the ballot box, sustainable jobs with a living wage, and equitable public education.

Fifty years after Selma, our country still has a long way to go in pursuit of racial and economic justice. The ongoing epidemic of police violence against African-Americans – not new, but newly documented by cell phone videographers – is just one reminder. But Selma also reminds us that it is protest and mobilization that drives forward the pursuit of justice and democracy, which is why the NAACP’s inspiring action is so important.

The Journey for Justice message cannot and will not be ignored. We applaud the NAACP for organizing this event and call on policymakers to listen to marchers’ stories and heed their call for justice.

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