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The Border Is a Back Door for U.S. Device Searches

September 9, 2013 by

The documents detail what until now has been a largely secretive process that enables the government to create a travel alert for a person, who may not be a suspect in an investigation, then detain that individual at a border crossing and confiscate or copy any electronic devices that person is carrying.

To critics, the documents show how the government can avert Americans’ constitutional protections against unreasonable search and seizure, but the confiscations have largely been allowed by courts as a tool to battle illegal activities like drug smuggling, child pornography and terrorism.

The documents were turned over to David House, a fund-raiser for the legal defense of Chelsea Manning, formerly known as Pfc. Bradley Manning, as part of a legal settlement with the Department of Homeland Security. Mr. House had sued the agency after his laptop, camera, thumb drive and cellphone were seized when he returned from a trip to Mexico in November 2010. The data from the devices was then examined over seven months.

Although government investigators had questioned Mr. House about his association with Private Manning in the months before his trip to Mexico, he said no one asked to search his computer or mentioned seeking a warrant to do so. After seizing his devices, immigration authorities sent a copy of Mr. House’s data to the Army Criminal Investigation Command, which conducted the detailed search of his files. No evidence of any crime was found, the documents say.

“Americans crossing the border are being searched and their digital media is being seized in the hopes that the government will find something to have them convicted,” Mr. House said. “I think it’s important for business travelers and people who consider themselves politically inclined to know what dangers they now face in a country where they have no real guarantee of privacy at the border.”

A spokeswoman from Customs and Border Protection said the agency declined to comment about the settlement with Mr. House, or answer questions about travelers’ rights when their devices are seized or inspected during a border crossing.

While many travelers have no idea why they are singled out for a more intrusive screening at a border, one of the documents released in Mr. House’s settlement shows that he was flagged for a device search months before he traveled to Mexico.

On July 8, 2010, Immigration and Customs Enforcement investigators in New York created an alert, known as a TECS lookout, for Mr. House, noting that he was “wanted for questioning re leak of classified material” and ordering border agents to “secure digital media” if he appeared at an inspection point.

TECS is a computer system used to screen travelers at the border, and includes records from law enforcement, immigration and antiterrorism databases. A report from the Department of Homeland Security about border searches of electronic devices says a traveler may be searched “because he is the subject of, or person-of-interest-in, an ongoing law enforcement investigation and was flagged by a law enforcement ‘lookout’ ” in the Immigration and Customs Enforcement computer system.

On Oct. 26, 2010, an automated message notified investigators that Mr. House had an airline reservation on Oct. 30, traveling on American Airlines flight 865 from Dallas-Fort Worth to Los Cabos, Mexico; a later query noted that he would be returning to Chicago O’Hare on American flight 228, landing at 6 p.m. on Nov. 3.

Since airline passengers are required to provide carriers with their birth date and passport number before a flight to or from the United States, and airlines pass that information to Homeland Security (as part of the Advance Passenger Information System), computers matched the lookout alert with Mr. House’s itinerary. Agents were then dispatched to meet him.

Article source: http://www.nytimes.com/2013/09/10/business/the-border-is-a-back-door-for-us-device-searches.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

For Global Drug Manufacturers, China Becomes a Perilous Market

July 16, 2013 by Leave a Comment

The booming Chinese demand for drugs could not come at a better time for Western manufacturers, whose sales have been slumping because of patent expirations in the United States and stringent price controls in Europe.

But selling pharmaceuticals and other health care products in China is increasingly fraught with peril, as shown by accusations in China this week that GlaxoSmithKline funneled payments through travel agents to doctors, hospitals and government officials to bolster drug sales in the country.

Chinese officials have compared the company’s operations to organized crime and have detained four Chinese executives for questioning. Shortly after government investigators raided the Shanghai offices of Glaxo last month, the British executive in charge of the company’s Chinese operations left the country. He has not been back since.

Earlier this month, the top manufacturers of infant formula, including Abbott and Nestlé, lowered their prices in China under government pressure, and Chinese officials have said they are investigating the pricing policies of up to 60 foreign and domestic drug companies.

The rash of investigations is one measure of how critical the health care market has become to global companies — and to the Chinese government. The Chinese have made no secret of their goal of pushing the country’s domestic drug industry into more direct competition with the world’s top manufacturers.

As a result, global companies can expect more scrutiny, said Tarun Khanna, a professor at Harvard Business School who has studied foreign investment in China. “Practices that may have been O.K. some time back may be more scrutinized by foreigners now,” he said, especially as the government seeks to shift from an export-based economy to one that is also focused on selling to Chinese consumers. “They’re trying to get more balance back.”

Several factors are contributing to the boom in China, experts said. China’s growing economy has given rise to a middle class that is increasingly able to afford expensive Western drugs, and to treat conditions — like depression and respiratory illnesses — that may have otherwise gone undiagnosed or unmedicated.

And under a new health care program, China has expanded insurance coverage to hundreds of millions of new patients — 95 percent of the population had insurance in 2011, compared with 43 percent in 2006, according to a recent report by the consulting firm McKinsey Company. By 2020, China’s total spending on health care is expected to grow to $1 trillion, from $357 billion in 2011, according to McKinsey.

Even as foreign companies raise their investment, the Chinese are also looking to capitalize on the booming health care market. The government identified the medical industry as one of seven major areas for development in its most recent five-year economic plan, and the country’s medical sector invested $160 billion in research and development in 2012, nearly surpassing Japan, according to a recent report by the Boston-based Lux Research.

“China is interested in building a very strong, homegrown industry,” said Kevin Pang, a research director at Lux.

But some believe Western companies will have an edge because consumers may be willing to pay more for brands that are known for high-quality ingredients.

“There are so many drugs that are poor quality in China, so the ability to differentiate yourself is important,” said Craig A. Wheeler, the chief executive of the American generic drug maker Momenta Pharmaceuticals. His company is developing complex drugs known as biosimilars through a business deal with Baxter, which has an established presence in China.

Mr. Wheeler said the recent crackdowns were to be expected. “These markets are maturing, and these markets are going to be therefore more highly regulated,” he said.

GlaxoSmithKline has been struggling to rebuild its image after a $3 billion fine in the United States last year, in which the company admitted to improperly promoting its antidepressants and failing to report safety data about the diabetes drug Avandia. Andrew Witty, who took over as chief executive in 2008, has repeatedly pitched the company as a global leader in ethical practices and said it had moved on from its previous lapses.

Chinese investigators told a different story on Monday, however. At a news conference in Beijing, they said senior executives had organized fake conferences, overbilled for training sessions and paid kickbacks in cash and luxury travel. The illegal activity was funneled through travel agencies, authorities said, some of whom even hired young women to engage in “sexual bribery,” or activities, with Glaxo managers to win long-term contracts with the company.

Article source: http://www.nytimes.com/2013/07/17/business/global/for-drug-makers-china-becomes-a-perilous-market.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Scandal Widens Over French Weight-Loss Drug Mediator

December 12, 2011 by Leave a Comment

PARIS — In 33 years on pharmacy shelves here, the diabetes drug Mediator was prescribed to an estimated five million French patients, many of them diabetics, many others hoping simply to lose weight. When French authorities ordered the drug off the market in 2009, alerted to possible cardiovascular risks, there were 300,000 active prescriptions.

Mediator and its enigmatic French manufacturer, Laboratoires Servier, a privately held company with a troubled past, find themselves at the center of France’s largest public-health scandal in at least a decade. Health officials estimate that as many as 2,000 people died, with thousands more hospitalized, victims of cardiac valve damage and pulmonary hypertension apparently linked to the drug.

Politicians and the press have pilloried Servier, charging that it concealed the dangers of Mediator for decades and insisting that the company has a wider history of disregarding health concerns about its products. Many have noted that two Servier weight-loss products, both closely related to Mediator, were at the center of the fen-phen scandal of the late 1990s in the United States.

In France, government investigators have accused Servier of licensing Mediator as a diabetes drug to avoid scrutiny, but urging doctors to prescribe the pills as a diet aid to bolster sales — a practice that greatly expanded the pool of those potentially harmed by the drug. Magistrates are investigating the company on charges of consumer fraud and manslaughter, and a public prosecutor has charged Servier with defrauding the French health care system. Trials are expected next year.

There are broader implications, as well. Drug makers have long viewed France’s pharmaceutical oversight apparatus as being relatively permissive, in particular as compared with the United States Food and Drug Administration, which industry and some patient groups criticize as overly cautious. French political leaders say that the Mediator scandal has exposed the failings of the country’s regulatory system, which they have described as rife with conflicts of interest and marked by a distinct apathy toward questions of public health.

The head of the French regulatory body, known by its acronym Afssaps, resigned this year, and French senators approved a package of reforms in October.

“We want there to be a ‘before’ and ‘after’ as regards Mediator in our country,” said Health Minister Xavier Bertrand, addressing the Senate.

Servier says it did nothing wrong and has insisted that the discovery of the dangers of the drug, also known as benfluorex, depended in part upon recent advances in echocardiography.

“I don’t see at what point Mediator could have been caught sooner,” said Lucy Vincent, a spokeswoman for Servier.

The withdrawal of Mediator from the market in 2009 — it was then available in France, Luxembourg and Portugal — caused little stir. Only the following year, with the publication of a book titled “Mediator 150 mg: How Many Dead?” did the news media and government officials take serious note.

“I realized they were withdrawing the drug on the sly,” said the book’s author, Dr. Irène Frachon, a pulmonologist. Servier and the health authorities made little effort to alert former patients, she said, like “a car manufacturer who sees there’s a defect in the brakes of its car, and who corrects the defect in its production line but doesn’t warn the people who have the car.”

In 2007, Dr. Frachon was among the first to identify the apparent risks of Mediator. Her book prompted lawsuits, public outcry and a government inquiry.

In January 2011, the interministerial commission leading the inquiry charged that Servier had deceived health authorities and patients in order to keep Mediator on the market.

But in their report, investigators also wrote that health officials had ignored a series of warning signs beginning a decade before. They additionally found that regulatory decisions taken by the Afssaps, the drug licensing agency, were in fact a “co-production,” reached in “cooperation” with drug makers.

At the Afssaps, voting members of the approval committee have long served simultaneously as consultants or employees of the pharmaceutical firms they are meant to regulate, officials acknowledge. And while members are expected to declare conflicts of interest, there are no penalties for not doing so. Consultants or employees from various companies, including Servier, remain active participants even now, according to Ms. Vincent, the Servier spokeswoman.

In America Food and Drug Administration restrictions on conflicts of interest are more rigorous, French and American health officials say. Failure to report a conflict of interest is a crime.

Article source: http://www.nytimes.com/2011/12/12/health/scandal-widens-over-french-weight-loss-drug-mediator.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,