Former Glaxo scientists and the feds fight over reviewing allegedly stolen documents
By Ed Silverman @Pharmalot
July 18, 2016
A pair of former GlaxoSmithKline scientists, who were indicted earlier this year for allegedly stealing trade secrets and funneling the information to a company in China, is fighting with the federal government over their ability to stage a defense.
At issue is a protracted tussle over how the former scientists — and two of their compatriots — will be able to review millions of pages of documents and other evidence that will be used at their trials, but remain under government supervision while they do so.
And more than mere logistics are at stake, at least according to the feds.
In court documents, the US Department of Justice expressed worries that the former Glaxo scientists and their alleged accomplices may continue to funnel information to relatives in China, where the data could be sold. They already “plotted to hide their ill-gotten gains in the names of family members in China,” the feds wrote in a July 12 letter to US District Court Judge Joel Slomsky in Philadelphia.
Drug manufacturer GlaxoSmithKline, under investigation in China on suspicion its employees bribed doctors, said Thursday, July 18, 2013 its finance director for the country has been barred from leaving. The executive, Steve Nechelput, has not been questioned or arrested and is free to travel within China, the British company said in a statement. It said it had been aware of the travel restrictions since the end of June. Nechelput continues to work in his role as finance director for the company’s China unit. (AP Photo/Kirsty Wigglesworth, File)
Glaxo scientists indicted for stealing trade secrets
The feds are also concerned that the Glaxo data — which includes details on compounds, biological summaries, and a business plan for a quality control unit — might be transferred to still another accomplice. This fifth person, who was also indicted, is now a fugitive and is believed to be in China, where he is working for Renopharma, the company they established to market the data.
The case comes as the federal government is under pressure to pursue cases involving alleged theft of trade secrets belonging to US life sciences and tech industries. Not every effort succeeds, though. In 2014, for instance, charges were dismissed against two former Eli Lilly scientists, who were accused of wire fraud for allegedly leaking proprietary data about experimental drugs to a Chinese drug maker.
And so, the Justice Department wants to station security guards in the homes of the former Glaxo scientists and their alleged accomplices.
The “materials could be transmitted to (the fugitive) in a number of different forms including email, text messages, or other types of communication with little chance of detection. This fact heightens the risk of continued theft,” the Justice Department wrote. “The criminal prosecution has obviously put enormous financial pressure on the defendants, and there will be great temptation to attempt to profit from this information as they attempted to do so in the past.”
The defendants include Yu Xue, who worked as a research scientist at Glaxo and had access to a substantial amount of information concerning procedures for drug development and manufacturing. She and another former Glaxo scientist, Lucy Yi, allegedly emailed the data to others with whom they formed Renopharma, which marketed itself as an R&D company doing business in China.
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Lawyers for the former Glaxo scientists have argued that security guards would be invasive and, instead, proposed that cameras be placed by stand-alone computers in set locations in each home. By doing so, the attorneys maintained the government could monitor the scientists whenever they review any documents. “The combination of these measures allows the government to reasonably ensure that nothing nefarious occurs with the … materials,” they wrote the judge in a July 1 letter.
But the feds countered that they don’t have the resources to continuously monitor the cameras; one camera could not adequately cover every possible angle, and cameras can malfunction or be bypassed. The feds are also worried that a stand-alone laptop could be stolen since the home addresses are now a matter of public record, and the information is known to be valuable. They also cite potential constitutional issues with constant videotaping inside their homes.
The judge is expected to issue a decision shortly, according to a spokeswoman for Robert Livermore, the US attorney in Philadelphia. A lawyer for Xue declined to comment.