GSK’s Weak Defense Over Corruption Charges


At the beginning of the April, Glaxo was accused of hiring government-employed doctors and pharmacists in Iraq to act as paid sales representatives. GSK employs about 60 people in Iraq and hence claimed that the incident of bribery involved just a few individuals. However, the Wall Street Journal had reported that GSK was warned about the misconduct by a whistleblower familiar with the company’s operation in the Middle East. GSK issued a statement claiming, “We have zero tolerance for unethical or illegal behavior”. 

Earlier, in 2007, GSK had been accused of shady business dealings with Saddam Hussein’s regime including payment of bribes to bag contracts for the supply of medicines. GSK denied any wrongdoing saying that all its dealings under the Iraqi oil-for-food programme were transparent and in accordance with the regulations.

Last year in June, GSK executives in China were accused of using travel agencies as a conduit to transfer $490 million to government officials, medical associations and foundations, hospitals and doctors to persuade them to prescribe GSK’s medicines. The payments allegedly began in 2007. The money was channelled through 700 conference organizers/ travel agencies, said China’s ministry of public security. The crackdown by the Chinese government saw GSK, which claimed initially that it had investigated and found no evidence to support the charges of bribery, back down and accept that senior executives of the company working in China appeared to have broken the law. Following the scandal, GSK’s sales in China fell by 61%. China accounts for 3% of the corporation’s global revenue. GSK Chief Executive Andrew Witty said the situation was “shameful” and “deeply disappointing”.

In 2012, GSK set a new record by shelling out $3 billion, the largest health care fraud settlement ever in the US. This covered many frauds from April 1998 to August 2003, which included promoting several drugs for unapproved uses by paying kickbacks to healthcare professionals to induce them to promote and prescribe these drugs. GSK was accused of promoting Paxil for treating depression in patients under 18 years of age, even though the FDA has never approved it for paediatric use. Similarly, Wellbutrin, approved only for major depressive disorders, was promoted by GSK for weight loss, the treatment of sexual dysfunction, substance addictions and Attention Deficit Hyperactivity Disorder, all conditions for which it was not approved. The US Department of Justice alleged that GSK sponsored dinner programs, lunch programs, spa programs and similar activities to promote these drugs and several others including Advair, Lamictal and Zofran, for unapproved uses. 

Despite such a large number of bribery cases surfacing, GSK has continued to insist that its investigations into allegations of bribery have shown wrongdoing by just a handful of staff outside the GSK’s control systems. GSK insists that it does not have a systemic issue with unethical behavior though bribery cases have been surfacing for more than two decades.

“To be clear: we have zero tolerance for unethical or illegal behaviour. Anyone who conducts such behaviour has no place in our company. We believe the vast majority of our employees uphold our values,” a company spokesperson said in response to a questionnaire. In all there were 3,128 instances of employee discipline for policy violations, mainly related to attendance and payroll issues, and 375 employees were dismissed.

According to Sidney M Wolfe of the health research group Public Citizen, GSK topped the list of repeat offenders with total criminal and civil penalties of $7.56 billion since 1991 paid at different points of time. After penalties, GSK often signed Corporate Integrity Agreements (CIAs) with the US government, which were meant to stop the company from committing fraud. In an article he wrote for the British Medical Journal on escalating civil and criminal violations by the pharma industry in the US, Wolfe pointed out that GSK had been under a series of CIAs from 2003 to 2018, with the exception of the 2010 to 2012 interval. Wolfe showed how all the penalties GSK paid over a decade did not amount to much as its profits for 2012 alone were $7.7 billion.

“These escalating patterns of repeated criminal violations and civil settlements to resolve serious allegations of civil lawlessness hardly bespeak corporate integrity for GSK, Pfizer, or the many other companies who are also repeat offenders. We are forced to conclude that neither the current level of penalties nor corporate integrity agreements are effective and that there is a pathological lack of corporate integrity in many drug companies,” concluded Wolfe. 

Across the world, countries like the US, the UK and others in Western Europe, Latin America and Central Asia are cracking down on the culture of bribery and corruption in the pharmaceutical industry. The silence from India on the issue is deafening.

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One comment

  1. kiwi

    Just love that phrase ‘pathological lack of corporate integrity’ … in other words they have psychological issues right? ok well what they should be made to do is all executives must eat some of their own medicine …how about a compulsory taste of 40mg of seroxat daily for a minimum of 3 months!
    And this company is involved in Healthcare of all things!

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