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Misconduct in the Pharmaceutical Sector - GlaxoSmithKline

 

 GlaxoSmithKline

 

Misconduct in the Pharmaceutical trade - GlaxoSmithKline - $9,380,000,000 (Yes, 9,38 Billion in fines and settlements)

 

This was the first time during my research that I was nauseated and shocked to the point of feeling punch-drunk as a result of the facts. It is incredible that a company that has accrued so much in criminal and civil fines and penalties is still operating. Excepting China, not one single employee of GlaxoSmithKline has been charged relating to the information below. You will note that I did not include the customary origin and history of this company, as the content of malfeasance is already sizeable. So let’s get to it.

 

1. 1984 - The U.S. Food and Drug Administration (FDA) brings charges under the criminal provisions of federal drug laws against what was then SmithKline Beckman, alleging that the company failed to warn regulators and the public about potentially lethal side effects associated with its blood pressure medication Selacryn. This drug was linked to 36 deaths and over 500 cases of liver and kidney damage. Company officials were also charged with misdemeanour offenses. The company pleaded guilty, and three officials pleaded no contest. The judgement ordered SmithKline to give $100,000 to an organization working to prevent child abuse; the officials were each sentenced to five years of probation and 200 hours of community service. http://www.nytimes.com/1985/09/19/us/dispute-over-intent-in-drug-case-divided-fda-and-justice-dept.html?mcubz=3

 

2. In 1993 the FDA ordered Glaxo to stop making what the agency called false and misleading statements about the effectiveness of the company’s best-selling anti-ulcer drug Zantac. https://pink.pharmamedtechbi.com/PS022127/GLAXOs-ZANTAC-REPETITIVE-AD-VIOLATIONS-DRAW-FDA-WARNING-LETTER-MISUSE-OF-DRUG-INTERACTION-DATA-SUPERIORITY-CLAIMS-CITED-IN-CORRECTIVE-LETTER-REQUEST

 

3. 1996 - SmithKline Beecham and 14 other drug companies agreed to pay a combined $408 million to settle a class action lawsuit charging them with conspiring to fix prices they charged to thousands of independent pharmacies. As additional penalty to the $30 million of their financial settlement, SmithKline agreed to supply the plaintiffs with a quantity of the generic version of its Tagamet ulcer medication worth $20 million. http://www.nytimes.com/1996/02/10/business/drug-makers-settle-suit-on-price-fixing.html

 

4. In 1997, in an investigation known as Operation LabScam, federal investigators brought charges against SmithKline Beecham Clinical Laboratories, who agreed to pay $325 million to settle charges that it had overcharged Medicare by billing for millions of laboratory tests that were not medically necessary, were not ordered by a physician or were not performed. This was the highest settlement amount to date in a healthcare-related civil settlement. https://www.justice.gov/archive/opa/pr/1997/February97/082ag.htm

 

5. In an early attempt to lower the price of pharmaceuticals to consumers, the state of Maine passed a law allowing for price control of prescription drugs. SmithKline responded with a warning that it would no longer ship its products to wholesalers in the state. In 2001 GlaxoSmithKline tried the same intimidation tactics with the South African government when the Department of Health to import relatively inexpensive drugs to deal with the country’s AIDS epidemic. http://www.nytimes.com/2000/08/04/us/drug-maker-fires-back-at-maine-over-law.html , http://www.nytimes.com/2001/04/20/world/drug-makers-drop-south-africa-suit-over-aids-medicine.html

 

6. After facing charges in 2003 of overcharging Medicare for popular prescription drugs, GlaxoSmithKline agreed to settle for $87.6 million "to avoid delay and expense of a trial". This tactic is normally used when the company charged does not want potentially damaging information to be exposed during a judicial process of discovery, which could escalate a fine to levels not budgeted for, or such information might have more of an impact on their reputation and profits than the settlement amount. http://articles.latimes.com/2003/apr/17/business/fi-fraud17 , http://s3.amazonaws.com/fcmd/documents/documents/000/000/858/original/glaxosmithkline-overcharging-medicaid_pr.pdf?1423019618

 

7. Also in 2003, regulators in Britain warned that use of GlaxoSmithKline’s antidepressant Seroxat (the UK name for Paxil) by children could increase suicidal thoughts and should not be prescribed for them. The FDA followed with a similar recommendation and subsequently ordered that a “black box warning” be added to the drug’s packaging. In 2004 New York Attorney General Eliot Spitzer filed suit against the company, accusing it of suppressing research that reached negative conclusions on the efficacy of Paxil. The case was later settled for $2,5 Million, with GlaxoSmithKline agreeing to take the unusual step of disclosing the results of its clinical trials for Paxil and other drugs. In the links below is more information on how the marketing of Paxil was done by means of “Ghost Writing”. http://www.browndailyherald.com/2008/09/24/kellers-findings-on-paxil-disputed-by-doctors-fda/, http://www.pogo.org/our-work/letters/2010/ph-iis-20101129.html, https://www.centerforhealthjournalism.org/blogs/drug-document-archive-puts-paxil-spotlight, http://s3.amazonaws.com/fcmd/documents/documents/000/000/854/original/glaxosmithkline-paxil_ny-litigation_pr.pdf?1423019615, http://s3.amazonaws.com/fcmd/documents/documents/000/000/855/original/glaxosmithkline-paxil_ny-litigation_consent-order.pdf?1423019616

 

8. 2004 did not start well for GSK. In February, the company agreed to pay an amount of $175 Million to settle charges of blocking a cheaper rival to its arthritis medicine, Relafen, in violation of antitrust laws in the United States. GSK announced that they would retain $406 million in total to cover settled and pending claims related to Relafen. http://www.nytimes.com/2004/02/07/business/company-news-drug-maker-agrees-to-pay-175-million-in-lawsuit.html, http://s3.amazonaws.com/fcmd/documents/documents/000/000/845/original/glaxosmithkline-relafen-antitrust-litigation_pr.pdf?1423019604

 

9. The very same year (2004), GSK is fined $92 Million for fraudulently preventing generic versions of Augmentin from entering the market by obtaining fraudulent patents and pursuing sham litigation defending those patents, resulting in higher prescription prices. http://s3.amazonaws.com/fcmd/documents/documents/000/000/862/original/glaxosmithkline-augmentin-antitrust-litigation_pr.pdf?1423019621

 

10. 2004 did not end well for GlaxoSmithKline either. In Boston a further award of $75 Million was granted against GSK in another class action lawsuit for unlawfully obtaining a patent which allowed them to enforce a monopoly over Relafen and prevent competition by generic prescription drugs. The suit contended that this conduct resulted in consumers and
payers paying exorbitant prices for Relafen. http://s3.amazonaws.com/fcmd/documents/documents/000/000/843/original/glaxosmithkline-relafen-litigation_pr.pdf?1423019602

 

11. Along comes 2005 with more woes for GSK, with them being nailed to the tune of $150 Million for violating the False Claims Act through fraudulent drug pricing and marketing of two anti-emetic drugs, Zofran and Kytril. https://www.justice.gov/archive/opa/pr/2005/September/05_civ_489.html

 

12. A further $10 Million award against GSK in New York relating to antitrust activities and Relafen. http://www.contractormisconduct.org/misconduct/739/relafen-multistate-litigation-ny-attorney-general-settlement

 

13. A scant 12 months later in August of 2006, GSK forked out another $70 Million to settle civil lawsuits accusing them of inflating costs of several medicines in six states, including its blockbuster Zofran nausea drug. The GSK spokesperson stated that the company did not admit to any wrongdoing, but had preferred to settle the case to get it over with. What is an indicator of the real facts is that GSK stated that an additional 34 states would also be eligible to receive money from the settlement, indicating that at least another 34 states that had not taken part in the case had been fleeced as well. http://www.nytimes.com/2006/08/11/business/11glaxo.html, http://s3.amazonaws.com/fcmd/documents/documents/000/000/842/original/glaxosmithkline-awp-drug-litigation_settlement.pdf?1423019601

 

14. In 2006 GlaxoSmithKline reported that it would pay $3.1 billion to the U.S. Internal Revenue Service to resolve a 17-year dispute over the handling of tax related transactions between the company’s U.S. operation and the parent company. The settlement, the largest in IRS history, focused on the issue of transfer pricing—a method by which transnational corporations artificially reduce their tax liabilities. http://s3.amazonaws.com/fcmd/documents/documents/000/000/860/original/glaxosmithkline-underreporting-profits_pr.pdf?1423019619, http://s3.amazonaws.com/fcmd/documents/documents/000/000/859/original/glaxosmithkline-underreporting-profits_gskpr.pdf?1423019619

 

15. The same year GSK also agrees to pay $14 Million to settle New York state charges of inflating the price of Paxil by means of patent fraud, antitrust violations and frivolous litigation to maintain a monopoly and block generic versions of the medication from entering the market. https://www.law360.com/articles/12837/glaxo-agrees-to-settle-paxil-litigation-for-63-8m, http://s3.amazonaws.com/fcmd/documents/documents/000/000/857/original/glaxosmithkline-paxil-multistate-litigation_nyag-settlement_settlement.pdf?1423019618

 

16. During November of 2006, Paxil and GSK are in the news again, with a settlement of $63.8 Million in a class action suit for marketing Paxil to teens while hiding information on the drug’s safety. GSK denies the claim but agrees to settle to avoid further costs. Yeah, sure! https://www.law360.com/articles/12837/glaxo-agrees-to-settle-paxil-litigation-for-63-8m, http://s3.amazonaws.com/fcmd/documents/documents/000/000/962/original/glaxosmithkline-paxil_madison-county_settlement.pdf?1423019717

 

17. In a 2007 review of the data posted by the company on clinical trials involving its diabetes drug Avandia, researchers at the Cleveland Clinic concluded that it posed a heightened risk of heart attacks. The New York Times also discovered that the FDA had been warned of such risks years earlier. Over the following years, more information came to light questioning the safety of Avandia, prompting actions such as a move by the U.S. Department of Veterans Affairs to sharply curtain use of the drug.
In 2010 a scathing critique of the clinical trial GlaxoSmithKline had used to argue for the safety of Avandia, an FDA reviewer concluded that the company had excluded information about numerous instances in which users’ experienced severe medical complications. It was then reported that the company had spent more than a decade covering up research results showing that Avandia performed no better a competing medication.
Later that year an FDA advisory panel recommended that Avandia either be withdrawn from the market or severely restricted in its use. Europe did the same. In July 2010 GlaxoSmithKline announced it would take a $2.4 billion charge against earnings to cover legal liabilities related to Avandia. (Six months later, the company took another charge of $3.4 billion.)This whole fiasco came to a head in July 2012 when the Department of Justice announced that GSK had agreed to plead guilty to a three count criminal charge as well as other civil charges. The agreed-to settlement amount was $3 Billion. The fines consisted of the following: “Under the terms of the plea agreement, GSK will pay a total of $1 billion, including a criminal fine of $956,814,400 and forfeiture in the amount of $43,185,600. The criminal plea agreement also includes certain non-monetary compliance commitments and certifications by GSK’s U.S. president and board of directors. GSK will also pay $2 billion to resolve its civil liabilities with the federal government under the False Claims Act, as well as the states. The civil settlement resolves claims relating to Paxil, Wellbutrin and Avandia, as well as additional drugs, and also resolves pricing fraud allegations.” GSK was also compelled to sign a Corporate Integrity Agreement. Full information in the Justice Department documents in the links. http://www.nytimes.com/2007/05/23/business/23drug.html, http://www.nytimes.com/2007/10/18/business/18drug.html, http://www.nytimes.com/2010/07/16/business/global/16avandia.html, . https://www.justice.gov/opa/pr/glaxosmithkline-plead-guilty-and-pay-3-billion-resolve-fraud-allegations-and-failure-report, http://s3.amazonaws.com/fcmd/documents/documents/000/002/676/original/glaxosmithkline-2011-national-settlement_july-2012-update_plea.pdf?1423021249, http://s3.amazonaws.com/fcmd/documents/documents/000/002/677/original/glaxosmithkline-2011-national-settlement_july-2012-update_cia.pdf?1423021250

 

18. In 2008 the FDA sent a warning letter to GlaxoSmithKline alleging that materials the company was sending health practitioners to promote its breast cancer drug Tykerb were misleading because they omitted serious risks. http://www.wlf.org/upload/11-21-07DDMWrnTykerb.pdf

 

19. 2008 - GSK Australia is fined $310,000 for code of conduct violations and for distributing misleading promotional material about its products. http://s3.amazonaws.com/fcmd/documents/documents/000/001/299/original/glaxosmithkline-medicines-australia_report.pdf?1423020289

 

20. October 2008 – Medical insurers are awarded $40 Million as reimbursement for monies paid out after it was found that GSK had promoted Paxil off-label to minors despite the fact that it was not approved for that age group, and did not perform any better than a placebo. http://s3.amazonaws.com/fcmd/documents/documents/000/001/367/original/glaxosmithkline-paxil_national_pr.pdf?1423020359, http://s3.amazonaws.com/fcmd/documents/documents/000/001/368/original/glaxosmithkline-paxil_national_settlement.pdf?1423020360

 

21. “GlaxoSmithKline to Plead Guilty & Pay $750 Million to Resolve Criminal and Civil Liability Regarding Manufacturing Deficiencies at Puerto Rico Plant”, the headline of a US Department of Justice document dated Tuesday, October 26, 2010. This included a criminal fine of $150 Million, and $600 Million civil settlement under the False Claims Act and related state claims. The charges stemmed from products from the GSK manufacturing facility in Puerto Rico being adulterated, i.e. the methods used in, or the facilities or controls used for, its manufacturing, processing, packing or holding did not conform to or were not operated or administered in conformity with current good manufacturing practice to assure that such drug met the requirements as to safety and had the identity and strength, and met the quality and purity characteristics, which it purported or was represented to possess. These products were then imported into the US from 2001 to 2005. https://www.justice.gov/opa/pr/glaxosmithkline-plead-guilty-pay-750-million-resolve-criminal-and-civil-liability-regarding

 

22. 2010 - GSK agrees to pay the state of Kentucky $3,75 Million to settle allegations of deceptive or false marketing and inflating the price of the anti-nausea drugs Kytril and Zofran. This followed an award of $5,8 Million earlier the year by the same court for violating Kentucky’s Consumer Protection Act. http://s3.amazonaws.com/fcmd/documents/documents/000/002/089/original/glaxosmithkline-ky-consumer-protection_aug-2010-update_kypr.pdf?1423022021, http://s3.amazonaws.com/fcmd/documents/documents/000/002/090/original/glaxosmithkline-ky-consumer-protection_aug-2010-update_sett.pdf?1423022022

 

23. $10 Million, that is the share of GSK’s liability in the case against several pharmaceutical companies for price gouging the Hawaii Medicaid. Total settlement was $82,7 Million. http://s3.amazonaws.com/fcmd/documents/documents/000/002/189/original/glaxo-et-al-hawaii-awp_hipr.pdf?1423022131

 

24. 2011 – GlaxoSmithKline agrees to settle an antitrust class action lawsuit for $49,5 Million in which the Plaintiffs held that GSK had devised a plan to keep Wellbutrin prices high by making fraudulent assertions to the U.S. Patent and Trademark Office and by engaging in sham patent litigation against generic drug manufacturers to keep a generic version of Wellbutrin from coming to market. http://s3.amazonaws.com/fcmd/documents/documents/000/001/247/original/glaxosmithkline-wellbutrin-class-action_class-certif.pdf?1423020252

 

25. 2011 – And another settlement by GSK related to adulterated products manufactured in their Puerto Rico plant, which had been closed in the interim. The settlement of $40,75 Million was reached with 38 states that had charged them with providing unsterilized batches of medication, and also batches with varying dosages. http://s3.amazonaws.com/fcmd/documents/documents/000/002/437/original/glaxosmithkline-puerto-rico_state-settlement_pr.pdf?1423020958

 

26. 2011 – The South Korean government Fair Trade Commission fines GSK $2,6 Million for antitrust activities. https://www.law360.com/articles/279947/south-korea-fines-gsk-2-6m-over-pay-for-delay-deal

 

27. 2012 - The Argentinian government fined GlaxoSmithKline Argentina Laboratories Company $93,000 for failing to obtain proper consent during vaccine trials of its Synflorix pediatric pneumonia vaccine. http://s3.amazonaws.com/fcmd/documents/documents/000/002/619/original/glaxosmithkline-argentina-vaccine_gskpr.pdf?1423021173

 

28. 2012 – For their part in defrauding the Louisiana’s Medicaid program, GSK had to pay a settlement of $10 Million. The fraud consisted of artificially inflating prices of medication sold through the Medicaid program. http://s3.amazonaws.com/fcmd/documents/documents/000/002/621/original/glaxo-et-al-defrauding-la-medicaid_settlements.pdf?1423021175, http://s3.amazonaws.com/fcmd/documents/documents/000/002/620/original/glaxo-et-al-defrauding-la-medicaid_laagpr.pdf?1423021174

 

29. 2012 – And more of the same, this time in Idaho. GSK fined $2,6 Million for inflating prices to Medicaid. http://www.ag.idaho.gov/media/newsReleases/2012/nr_04172012.html

 

30. 2012 – Apparently GSK had a bad year, as they settle a lawsuit that charged them with improperly impeding the marketing of a generic version of its Flonase nasal spray through abusing the citizen petition process of the Food, Drug, and Cosmetic Act by fraudulently delaying the introduction of generic versions of Flonase into the American market. This enabled GSK to illegally maintain monopoly power for 20 months between 2004 and 2006 and overcharged purchasers of Flonase by millions of dollars. GSK settled for $150 Million, so I have to assume the court would have awarded more. https://www.law360.com/articles/450443/judge-approves-150m-flonase-antitrust-accord

 

31. Yes, another 2012 pay-out. $90 Million worth after being charged with engaging in unfair and deceptive practices by misrepresenting Avandia’s cardiovascular risks and safety profile. The consent judgement in this case was quite involved, like a naughty child being reprimanded in a sweet shop. The judgement made the following determinations: GSK may not
1) make any false, misleading or deceptive claims about any diabetes drug;
2) make comparative safety claims not supported by substantial evidence or substantial
clinical experience;
3) present favorable information previously thought of as valid but rendered invalid by
contrary and more credible recent information;
4) promote investigational drugs; or
5) misuse statistics or otherwise misrepresent the nature, applicability, or significance of
clinical trials.
The judgment also has the following terms that are effective for at least eight years:
6) GSK must post summaries of all GSK-sponsored observational studies or meta analyses
conducted by GSK that are designed to inform the effective, safe, and/or
appropriate use of its diabetic drugs;
7) GSK shall post summaries of GSK-sponsored clinical trials of diabetes products
within eight months of the primary completion date;
8) GSK shall register and post all GSK-sponsored clinical trials as required by federal
law;
9) GSK shall comply with the ICMJE Uniform Requirements for Manuscripts submitted
to Biomedical Journals.
http://s3.amazonaws.com/fcmd/documents/documents/000/003/590/original/GlaxoSmithKline_-_Avandia_Multistate_Settlement_FLPR.pdf?1430419900, http://s3.amazonaws.com/fcmd/documents/documents/000/003/591/original/GlaxoSmithKline_-_Avandia_Multistate_Settlement_FLCJ.pdf?1430419900

 

32. Ouch, 2013 just carries on in the same vein. Like the tiny matter of a $45 Million settlement after the State of Louisiana filed a case against GSK for illegally promoting the drugs Paxil, Wellbutrin, Advair, Lamictal, Zofran, Imitrex, Lotronex, Flovent, and Valtrex for off-label uses from 1997 to 2010. The state alleged that GSK’s conduct included misrepresentations, false and/or fraudulent statements, misbranding, illegal marketing and promotion, and payment of illegal inducements to healthcare providers, which resulted in false and fraudulent claims to be submitted to the Louisiana Medicaid and medical assistance programs. http://www.nola.com/health/index.ssf/2013/07/louisiana_reaches_45_million_s.html

 

33. Yes, ouch. Another $184 Million settlement to eight US states for the illegal promotion of Avandia and misleading consumers about its cardiovascular risks. http://s3.amazonaws.com/fcmd/documents/documents/000/003/601/original/GlaxoSmithKline_-_Avandia_Multistate_Settlement_July_2013_6K.pdf?1430422124

 

34. Sigh, 2013 just did not want to make a turn for the better. Same company, same drug, plus two more, Avandamet, and Avandary, and a settlement of $15 Million for improper marketing. http://s3.amazonaws.com/fcmd/documents/documents/000/003/603/original/GlaxoSmithKline_-_Maryland_Diabetes_Settlement_MDAGPR.pdf?1430422488

 

35. 2014 – Mylan pharmaceuticals are awarded $106,7 Million after GSK violated their intellectual property rights agreement by reaching a deal with another company to sell a generic version of the drug that Mylan had obtained from GSK under their agreement. No honour among thieves, it seems. https://www.gpo.gov/fdsys/pkg/USCOURTS-njd-3_10-cv-04809/pdf/USCOURTS-njd-3_10-cv-04809-3.pdf

 

36. The year is still 2014, the setting – a court in Hunan Province, China. The charges brought against GSK are for directing a bribery and fraud scheme that resulted in higher drug prices and illegal revenue of more than $150 million. This was done by arranging secret payments to doctors, hospital staff and government officials in order to bolster Glaxo’s drug sales, conducting false transactions in order to transfer illegal gains made in China to overseas companies, and bribing officials to stop from investigating the company. GSK was found guilty and fined $487 Million. http://www.gsk.com/en-gb/media/press-releases/gsk-china-investigation-outcome/ , https://www.nytimes.com/2014/09/20/business/international/gsk-china-fines.html?_r=0

 

37. 2014 – GlaxoSmithKline agrees to pay a settlement of $105 Million to 45 US states for the unlawful promotion of its asthma drug, Advair, as well as its antidepressant drugs Paxil and Wellbutrin. They were marketing this drug for use by children and teenagers without approval by the Food and Drug Administration. Part of the agreement in which GSK did not admit any liability or wrongdoing, they agreed to cease paying health care providers to promote its products and giving sales representatives incentives to promote its drugs for unapproved uses. The agreement also bans Glaxo from disseminating information describing any off-label use of a product, unless such information and materials are consistent with applicable FDA regulations and guidance. https://oag.ca.gov/news/press-releases/attorney-general-kamala-d-harris-secures-105-million-multistate-settlement

 

38. 2015 – Belgium. GSK fined $619,857 for price fixing. http://www.thisismoney.co.uk/money/markets/article-3135172/GSK-Unilever-17-companies-fined-126m-fixing-prices-Belgium.html

 

39. 2016 - The U.K. Competition and Markets Authority (CMA) fined GSK US$54,3 Million for illegally preventing competitors from developing a generic replacement for Glaxo’s anti-depressant drug Seroxat. http://www.pharmtech.com/cma-fines-pharmaceutical-companies-45-million-pay-delay-deals

 

40. 2016 – The US Securities and Exchange Commission charges GSK with violating the Foreign Corrupt Practices Act after the abovementioned China debacle. GSK Pays $20 Million as settlement. http://www.fcpablog.com/blog/2016/9/30/gsk-pays-sec-20-million-to-settle-china-fcpa-violations.html

 

41. At present there are 8 more serious matters outstanding, all with potentially huge fines or settlements.

 

FDA Warning letters for contravention of Good Manufacturing Practices:
https://www.fda.gov/iceci/enforcementactions/warningletters/2016/ucm511838.htm
https://www.fda.gov/iceci/enforcementactions/warningletters/2014/ucm401719.htm
https://www.fda.gov/iceci/enforcementactions/warningletters/2014/ucm390435.htm
https://www.bizjournals.com/triangle/stories/2010/05/03/daily36.html
http://www.pharmatimes.com/news/fda_hits_gsk_with_warning_letter_over_avandia_study_data_987323

 

I wish to thank the people at The Project For Government Oversight in the US for all the information they have provided, as well as ProPublica and The Corporate Research Project.

 

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