Law360, New York (November 22, 2016, 3:11 PM EST) — An Illinois federal judge on Monday canceled a pretrial hearing scheduled to vet an expert witness for the widow of a former Reed Smith LLP partner who killed himself allegedly as a result of taking GlaxoSmithKline PLC’s antidepressant drug, finding that the expert’s past issues had already been settled.
Dr. David Healy, who’s set to testify on behalf of widow Wendy Dolin when her trial against GSK begins in January, was scheduled first to take part in a pretrial hearing regarding an investigation into a past patient incident by the General Medical Council, the governing board of medicine in the United Kingdom where his practice is located.
However, that investigation has since closed with no finding of wrongdoing, and the Illinois federal court’s in camera review of documents related to the council’s inquiry have turned up nothing either, therefore a hearing to vet Dr. Healy is no longer warranted, U.S. District Judge William T. Hart decided.
“As stated by this court before the GMC investigation was closed ‘investigations, without finding of culpability, are typically not relevant.’ Moreover, there is nothing in the in camera documents to warrant a hearing or disclosure of the documents. Accordingly, no pretrial hearing of Dr. Healy’s testimony will be held,” Judge Hart wrote.
The judge indicated that the court would hang onto the in camera documents until the conclusion of the trial, which is set to begin Jan. 17.
“This case is about Paxil-induced self-harm, not a medical board investigation where Dr. Healy was cleared of any wrongdoing and had nothing to do with Paxil,” Robert Wisner of Baum Hedlund Aristei & Goldman PC, an attorney for Dolin, told Law360. “GSK wants to distract the jury with any and everything that does not center on GSK’s conduct. The court, thankfully, saw through it.”
A representative for GSK declined to comment.
Dolin had asked Senior U.S. District Judge James B. Zagel in August to cancel the December hearing over Healy after the General Medical Council cleared him in an investigation following the suicide of one of his patients.
Judge Zagel had requested the hearing to determine whether GSK could ask Healy about the council’s investigation in front of the jury during the upcoming trial. But Dolin had argued that GSK’s investigation-based attacks on Healy were no longer relevant to the case.
Dolin sued GSK and Mylan Inc. in 2012, two years after her husband, Stewart, threw himself in front of a train. He began taking Mylan’s generic form of GSK’s antidepressant Paxil just a few days before his death.
Wendy Dolin claims GSK covered up an increased risk of suicide associated with Paxil by manipulating data used in a study that was submitted to the U.S. Food and Drug Administration. She also wants GSK held liable for failing to include a warning on its packaging about the risk.
For more than a year now, the parties have battled over Healy, a British psychiatrist who will testify for the widow about his research into the causal relationship between Paxil and adult suicide. While under investigation by the council, Healy wrote on his blog that he was likely being targeted by major drug manufacturers like GSK because of his testimony in various cases against the companies.
After Judge Zagel ensured the case would go to trial by declining to rule on GSK’s summary judgment bids earlier this year, GSK pressed him to force Healy to reveal documents related to the council’s investigation, arguing they were relevant to Healy’s credibility and potential bias against the drugmaker. Dolin countered, saying the public filing of the documents could cost Healy his job.
Judge Zagel denied GSK’s efforts to get the documents, which were submitted to the court for in camera review, but said he wanted to hold a special hearing to determine whether the U.K. investigation is relevant to the Dolin case.
Dolin is represented by R. Brent Wisner, Michael L. Baum, Bijan Esfandiari and Frances M. Phares of Baum Hedlund Aristei & Goldman PC, and David Rapoport, Joshua L. Weisberg and Melanie VanOverloop of Rapoport Law Offices PC.
GSK is represented by Alan S. Gilbert and Anders Wick of Dentons LLP, Chilton D. Varner, Andrew Bayman, Todd Davis and Heather Howard of King & Spalding LLP, and Robert Glanville, Thomas Wiswall, Tamar Halpern and Eva Canaan of Phillips Lytle LLP.
The case is Dolin v. Smithkline Beecham Corp. et al., case number 1:12-cv-06403, in the U.S. District Court for the Northern District of Illinois.
— Additional reporting by Emily Field, Kat Greene and Diana Novak Jones. Editing by Ben Guilfoy.
SHANGHAI — Peter Humphrey was in the bathroom of his Shanghai apartment when the police kicked the door off its hinges and knocked him to the ground. Nearly two dozen officers stormed his home. They confiscated files, laptops and hard drives related to his work as a corporate investigator.
Mr. Humphrey and his wife, Yu Yingzeng, were taken to Building 803, a notoriously bleak criminal investigation center normally reserved for human smugglers, drug traffickers and political activists. Sleep-deprived and hungry, he was transferred later that day to a detention house, placed in a cage and strapped to an iron chair. Outside, three officers sat on a podium and demanded answers.
Mr. Humphrey knew the reason for the harsh interrogation. He and Ms. Yu had been working for GlaxoSmithKline, the British pharmaceutical maker under investigation in China for fraud and bribery.
The Glaxo case, which resulted in record penalties of nearly $500 million and a string of guilty pleas by executives, upended the power dynamic in China, unveiling an increasingly assertive government determined to tighten its grip over multinationals. In the three years since the arrests, the Chinese government, under President Xi Jinping, has unleashed the full force of the country’s authoritarian system, as part of a broader agenda of economic nationalism.
Driven by the quest for profits, many multinationals pushed the limits in China, lulled into a sense of complacency by lax officials who eagerly welcomed overseas money. Glaxo took it to the extreme, allowing corruption to fester.
When bribery accusations surfaced, the company followed the old playbook, missing the seismic changes reshaping the Chinese market. Rather than fess up, Glaxo tried to play down the issues and discredit its accusers — figuring officials wouldn’t pay attention.
Along the way, there were bribes of iPads, a mysterious sex tape and the corporate investigator, who gave his operations secret code names. The company’s missteps are laid bare in emails, confidential corporate documents and other evidence obtained by The New York Times, as well as in interviews with dozens of executives, regulators and lawyers involved in the case.
The aftershocks of the Glaxo case are still rippling through China. The authorities have unleashed a wave of investigations, putting global companies on the defensive. The government has intensified its scrutiny of Microsoft on antitrust matters this year, demanding more details about its business in China. And just two weeks ago, the authorities detained a group of China-based employees, including several Australian citizens, working for the Australian casino operator Crown Resorts, on suspicion of gambling-related crimes.
Companies are racing to find new strategies and avoid getting locked out of China, the world’s second-largest economy after the United States. Disney and Qualcomm are currying favor with Chinese leaders. Apple redid its taxes in China after getting fined. Some multinationals are training employees in how to deal with raids.
The crackdown has prompted a complete rethinking for Glaxo — and for much of the pharmaceutical industry. To appease the government, drug makers have promised to lower prices and overhaul sales practices.
“For a long time, there’d been this policy of going easy on foreign enterprises,” said Jerome A. Cohen, a longtime legal adviser to Western companies. “The government didn’t want to cause embarrassment or give outsiders the impression that China is plagued with corruption. But they’re not thinking like that anymore.”
The Glaxo case was fueled by missed clues, poor communication and a willful avoidance of the facts. For more than a year, the drug maker brushed aside repeated warnings from a whistle-blower about systemic fraud and corruption in its China operations.
The company’s internal controls were not robust enough to prevent the fraud, or even to find it. Internally, the whistle-blower allegations were dismissed as a “smear campaign,” according to a confidential company report obtained by The Times.
Glaxo just wanted to make its problems go away. It offered bribes to regulators. It retaliated against the suspected whistle-blower. It hired Mr. Humphrey and Ms. Yu to dig into the woman’s background, family and government ties, as a way to discredit her. And Glaxo may even have gone after the wrong person, documents and emails obtained by The Times suggest.
None of it mattered. The allegations were true.
Prosecutors charged the global drug giant with giving kickbacks to doctors and hospital workers who prescribed its medicines. In 2014 Glaxo paid a nearly $500 million fine, at the time the largest ever in China for a multinational. Five senior executives in China pleaded guilty, including the head of Glaxo’s Chinese operations, a British national, in a rare prosecution of a Western executive. With Glaxo embroiled in scandal, sales plummeted in China, the company’s fastest-growing market.
Glaxo has declined multiple requests for comment, referring instead to earlier statements. Glaxo “fully accepts the facts and evidence of the investigation, and the verdict of the Chinese judicial authorities,” one statement read. “GSK P.L.C. sincerely apologizes to the Chinese patients, doctors and hospitals, and to the Chinese government and the Chinese people.”
Mr. Humphrey and Ms. Yu, both in their late 50s at the time of their arrests, were punished too. The couple spent two years in prison for illegally obtaining government records on individuals.
Mr. Humphrey was crowded into a cell with a dozen other inmates. There were no beds or other furniture, just an open toilet and a neon light overhead. During his incarceration, Mr. Humphrey said, he suffered back pain, a hernia and a prostate problem that was later diagnosed as cancer.
“I was in a state of complete shock and breakdown,” said Mr. Humphrey, who was released along with his wife in July 2015. “I was physically broken down and mentally blown away. I didn’t sleep for 45 days.”
A Whistle-Blower Emerges
An anonymous 5,200-word email in January 2013 to the Glaxo board laid out a detailed map to a fraud in the Chinese operations.
Written in perfect English, the email was organized like a corporate memo. Under the header “Conference Trip Vacations for Doctors,” the whistle-blower wrote that medical professionals received all-expenses-paid trips under the guise of attending international conferences. The company covered the costs of airline tickets and hotel rooms, and handed out cash for meals and sightseeing excursions.
In a section labeled “GSK Falsified Its Books and Records to Conceal Its Illegal Marketing Practices in China,” the email explained how Glaxo was pitching drugs for unapproved uses. As an example, the whistle-blower said the drug Lamictal had been aggressively promoted as a treatment for bipolar disorder, even though it had been approved in China only for epilepsy.
Glaxo “almost killed one patient by illegally marketing its drug Lamictal,” said the email, which was obtained by The Times. “GSK China bought the patient’s silence for $9,000.”
The email was one of nearly two dozen that the whistle-blower sent over the course of 17 months to Chinese regulators, Glaxo executives and the company’s auditor, PricewaterhouseCoopers.
When the authorities pressed Glaxo, the company was dismissive. It failed to properly investigate the allegations. It didn’t beef up its internal controls. And it didn’t change its marketing practices.
The decision was calculated. In the decades since China began opening its economy, most multinationals had avoided scrutiny over bribery. China needed overseas companies to help develop its economy, by setting up manufacturing operations and creating jobs. The authorities were reluctant to jeopardize investment, so they took a softer approach to enforcement.
When companies did run into trouble, fines were tiny. The rare cases tended to be colored by politics. Seven years ago, the Chinese authorities detained executives from the global mining giant Rio Tinto on suspicion of stealing state secrets. The charges were eventually downgraded to bribery, and the company avoided punishment.
By the time Glaxo’s fraud bubbled to the surface, China had changed.
Over the last decade, China has emerged as an economic powerhouse, but it took off even more as the rest of the world slowed after the financial crisis. That gave China the upper hand with overseas companies, which were increasingly dependent on profits from the country’s growing consumer base.
The economic might coincided with the Communist Party’s increasingly nationalistic stance. The authorities in China, already undertaking a severe crackdown on Chinese companies, wanted to show that, like American regulators, they could also penalize and sanction global companies.
And it was no secret that big drug makers were violating the law in China.
Years earlier, the consulting firm Deloitte warned about rampant corruption in China’s pharmaceutical market. As Deloitte found, doctors and health care workers were poorly compensated, so they could easily be induced to write more prescriptions with offers of cash, gifts, vacations and other benefits. Big drug makers, eager for growth, willingly obliged.
“The remarkable thing is that China is a more hospitable environment to this type of corruption, because it’s a market where doctors and hospitals are heavily reliant on drug sales,” said Dali Yang, who teaches at the University of Chicago and has studied the industry. “They were like fish swimming in water.”
American investigators had punished several major drug companies for such behavior abroad. In 2012, Eli Lilly agreed to pay $29 million, and Pfizer $45 million, to settle allegations that included employees’ bribing doctors in China. In settling the cases, neither company admitted or denied the allegations.
That summer, Glaxo agreed to pay $3 billion in fines and pleaded guilty to criminal charges in the United States for marketing antidepressants for unapproved uses, failing to report safety data on a diabetes drug and paying kickbacks. The case was built off tips from several whistle-blowers.
After that, Glaxo’s chief executive, Andrew Witty, pledged, “We’re determined this is never going to happen again.”
But it did — in China.
In early 2013, Glaxo realized it couldn’t ignore the problems. The authorities were asking questions. The whistle-blower continued to send emails.
So the company tried another common gambit in China: bribing officials.
The company set up a special “crisis management” team in China and began offering money and gifts to regulators.
That strategy had worked in the past. A company, often using a middleman, would try to soothe officials and regulators, offering gifts and favors.
One government agency had received multiple emails from the whistle-blower, and Glaxo targeted multiple branches of the agency, according to state media reports. One executive tried to cozy up to a Shanghai investigator with an iPad and a dinner totaling $1,200, another Glaxo employee said in a statement to the police. When that executive asked for money to bribe the Beijing branch, Mark Reilly, the head of the company’s Chinese operations, gave the “go ahead.”
Another executive with Glaxo’s Chinese operations bribed regulators to focus on “unequal competition,” rather than a more punitive investigation into “commercial bribery.” The goal, that executive admitted in a statement, was to limit any potential fine to about $50,000. It didn’t work.
As pressure mounted, the case took a bizarre turn, setting Glaxo on a collision course with the government.
In March 2013, Glaxo’s chief executive and five other senior executives in the company’s London headquarters received an anonymous email with a media file. In it, a grainy video showed Mr. Reilly, the executive in China, engaged in a sexual act with a young Chinese woman.
The attached email alleged that Mr. Reilly, a British national who had helped manage the company’s China operation for four years, was complicit in a bribery scheme tied to a travel agency called China Comfort Travel, or C.C.T. According to the email, Glaxo funneled money through the travel agency to pay off doctors. The travel agency also supplied Mr. Reilly with women, as a way to secure that business.
“In order to acquire more business, C.C.T. bribed Mark Reilly, the general manager of GSK (China) with sex,” the email said. “Mark Reilly accepted this bribery and made C.C.T. get the maximized benefits in return.”
Glaxo later discovered that the video had been shot clandestinely, in the bedroom of Mr. Reilly’s apartment in Shanghai. Analysts working for the company said it had been edited to disguise the location.
Glaxo executives in London were shocked. They deemed the video a serious breach of privacy, involving a possible break-in at the home of a senior executive in China. Mr. Reilly moved to a more secure residence.
Like many global companies, Glaxo has a code of conduct that encourages employees to report fraud or wrongdoing without fear of retaliation by the company. In many countries, including China, the rights of whistle-blowers are protected by law.
Glaxo didn’t seem to care.
By the time the video surfaced, Glaxo already had its suspicions about the identity of the whistle-blower. Months earlier, the company had fired Vivian Shi, a 47-year-old executive handling government affairs in Glaxo’s Shanghai office. The official reason for Ms. Shi’s firing was falsifying travel expenses. In fact, she was dismissed because the company believed she was the whistle-blower, according to confidential corporate documents obtained by The Times.
Ms. Shi did not return multiple calls for comment.
After receiving the video, Glaxo took more aggressive action, seeking to discredit Ms. Shi, who had already left the company.
At that point, in the spring of 2013, the company turned to Mr. Humphrey, the investigator. He ran ChinaWhys, a small risk consultancy firm that advised global companies like Dell and Dow Chemical.
His firm was engaged in what he called “discreet investigations,” helping multinationals cope with difficult situations like counterfeiting and embezzlement. Short in stature, with a shock of white hair, Mr. Humphrey portrayed himself as a kind of modern-day Sherlock Holmes.
“He likes a good adventure and likes solving cases,” said his friend Stuart Lindley, who runs a financial services company in China. “But he was definitely aware that some of that stuff was risky.”
In April 2013, Mr. Reilly met with Mr. Humphrey at Glaxo’s glass office tower near People’s Square in central Shanghai. According to meeting notes obtained by The Times, they discussed the emails, the sex video and Ms. Shi, the suspected whistle-blower. Mr. Reilly told the investigator that she held a grudge against Glaxo.
At the meeting, Mr. Reilly asked the investigator to look into the break-in at his apartment. But he made clear that he also wanted to assess what power and influence Ms. Shi might have with the government.
Legal experts say Mr. Reilly should not have been put in charge.
“The executive so accused has an obvious conflict of interest in overseeing such an investigation,” said John Coates, a Harvard Law School professor. “Even if the executive were entirely innocent of the whistle-blower’s charge, giving that same executive the role of investigating the whistle-blower smacks of retaliation.”
Efforts to reach Mr. Reilly, who has since left the company, were unsuccessful.
Using the code name Project Scorpion, Mr. Humphrey and his staff spent the next six weeks working undercover, gathering evidence. They visited Lanson Place, the upscale apartment complex where Mr. Reilly lived when the sex tape was made. They created a dossier on the suspected whistle-blower, searching for motives and ties to high-ranking officials or regulators. They interviewed former co-workers, scrutinized her résumé and scoured the web for information about her father, a former health official.
Glaxo may have crossed a line in this regard, putting the company more sharply in the government’s sights.
As part of the investigation, Mr. Humphrey turned to a Chinese detective to acquire a copy of Ms. Shi’s household registration record, or hukou. The official document contained information about her husband and daughter. The authorities had warned private detectives about acquiring confidential government documents.
“This type of household information is supposed to be private,” said John Huang, a former government official who is now managing partner at McDermott, Will & Emery in Shanghai. “But people were buying and selling it.”
Glaxo got little payoff from the investigation.
On June 6, 2013, Mr. Humphrey delivered a 39-page report to Glaxo that said Ms. Shi was probably the whistle-blower and even had a “track record of staging similar attacks” at a previous job. But the report included no evidence linking her to the emails or the sex video, according to a draft obtained by The Times.
Glaxo’s strategy of bribery and discrediting ultimately failed.
With the Chinese government in the midst of a crackdown on corruption, the police carried out a series of raids on June 27, 2013. They seized files and laptops from multiple Glaxo offices and interrogated dozens of employees. In Shanghai, four senior executives were detained. Investigators also raided the offices of several travel agencies that had worked closely with Glaxo, including China Comfort Travel.
A week later, the police stormed Mr. Humphrey’s apartment in Shanghai. He and his wife were charged with violating privacy laws.
Mr. Humphrey declined to comment on the specifics of the Glaxo case. His son defended his work, saying Glaxo engaged him “under false pretenses.” “My father is an honorable and law-abiding man,” said the son, Harvard Humphrey.
When prosecutors announced the case against Glaxo in July 2013, several weeks after arrests began, their allegations closely mirrored those of the whistle-blower. They described an elaborate scheme to bribe doctors and workers at government-owned hospitals using cash that had been funneled through a network of 700 travel agencies and consulting firms.
“It’s like a criminal organization: There’s always a boss, and in this case GSK is the boss,” said Gao Feng, one of the lead investigators.
Glaxo said little about the developments until July 15, when several high-ranking executives confessed from prison on state-run television. After that, the company capitulated, issuing a blanket statement for its misdeeds: “These allegations are shameful and we regret this has occurred.”
Cleaning Up Corruption
Dressed in a dark suit and a blue tie, Mr. Reilly, the Glaxo executive, was led in handcuffs into a small courtroom in the city of Changsha, in central China, in September 2014. With security guards behind him, he stood alongside four other senior Glaxo executives as a judge read the charges.
“The defendant company GSKCI is guilty of bribing nongovernment personnel and will be fined 3 billion yuan,” the judge, Wu Jixiang, said sternly, referring to Glaxo’s Chinese name. The company and the executives, having confessed, were given relatively light sentences, the court said.
Mark Reilly was sentenced to three years in prison and ordered to be expelled from China.
After handing down that sentence, the judge turned to Mr. Reilly.
“Do you obey the court’s verdict? Do you appeal?” he asked.
Mr. Reilly said that he would not challenge the verdict. Because he was swiftly deported, he will not serve prison time in China.
Glaxo is still trying to clean up the mess.
In China, Glaxo has promised to overhaul its operations and has put in place stricter compliance procedures. The company has changed the way its sales force is compensated and has eliminated the use of outside travel agencies.
Glaxo has also tightened oversight of expenses and cash advances, areas central to the case. Employees must now send in photographs of the guests and food, to verify that the meetings took place.
And in August 2015, Glaxo tried to make amends by rehiring Ms. Shi, an acknowledgment that the company had erred in firing an employee suspected of being a whistle-blower.
But the decision also hinted at a more troubling admission — that Glaxo had targeted the wrong person. There are indications that Ms. Shi was not the whistle-blower, and that there may have been more than one person.
The emails sent to regulators were written in fluent English and came mostly from a Gmail account. The email with the sex video came from a local Chinese account and was written in poor English. The only similarity was the anonymity.
The Times sent emails to both accounts and got a response from just one, the person who had written the detailed emails to the Chinese authorities and Glaxo. “You have reached who you are looking for,” the person replied.
In a series of exchanges, the author denied being Ms. Shi, acting in concert with her or sending the video. The person said Glaxo had erroneously blamed Ms. Shi for the emails and never found the actual whistle-blower.
The Times was unable to verify the identity of the person, who described working in Shanghai but declined to come forward for fear of retribution.
“I didn’t reveal to GSK personnel that I was the whistle-blower because doing so would have placed me in potential physical jeopardy,” the whistle-blower wrote in an email to The Times. “You understand that criminals — you know that they were convicted later in Chinese courts — were in charge of GSK China at that time, and I truly believe that they would have harmed me in some fashion had they discovered my identity. ”
After a whistle-blower working for one of the world’s biggest pharmaceutical companies began sending anonymous tips about fraud and corruption inside its operation in China, authorities there moved in. They arrested top executives and corporate detectives the company had hired to track down the whistle-blower. Here is how the events transpired.
Credit Aly Song/Reuters
December 2011 A self-described whistle-blower working inside Glaxo sends an email to Chinese regulators, detailing fraud and corruption in the pharmaceutical maker’s Chinese operations. It is the first of about two dozen emails sent over a 17-month period.
April 2012 Glaxo executives in China begin hearing that a whistle-blower has been sending documents to Chinese regulators claiming widespread corruption at the company.
July 2012 The company pleads guilty in the United States to criminal charges for improper drug marketing and kickbacks to doctors. The company’s chief executive, Sir Andrew Witty, pledges that it “is never going to happen again.”
December 2012 Vivian Shi, the head of government affairs for Glaxo in China, is fired, supposedly for falsifying travel expenses. But the real reason, according to internal documents, is that Ms. Shi is suspected of being the whistle-blower.
January 2013 The whistle-blower sends a 5,200-word email to the Glaxo chairman, senior executives and the company’s outside auditor. The email, like the previous ones to authorities, describes a systemic fraud and bribery scheme. The allegations are dismissed by the company as a “smear campaign.”
“This illegality almost killed a person,” a whistle-blower wrote to Chinese regulators in January 2013.
March 2013 Top Glaxo executives in London receive another whistle-blower email, this time showing Mark Reilly, the head of the company’s operations in China, engaged in a sexual act in his apartment.
April 2013 Glaxo hires ChinaWhys, a private consulting firm run by Peter Humphrey and his wife, Yu Yingzeng, to investigate the suspected whistle-blower and a break-in at Mr. Reilly’s home. The investigation is code-named “Project Scorpion.”
June 2013 Mr. Humphrey presents the findings of his investigation to Glaxo. Although his report offers no evidence connecting Ms. Shi to the emails, he notes the suspected whistle-blower has a “track record of staging similar attacks.”
June 2013 The police carry out a series of coordinated raids on Glaxo offices throughout China, detaining four executives, including the country’s chief legal officer. Several travel agencies working closely with Glaxo are also raided.
July 15, 2013 At a news conference in Beijing, prosecutors accuse senior executives at Glaxo’s Chinese operations of running an elaborate scheme to bribe doctors and hospital workers, describing it as an “organized crime operation.”
July 16, 2013 Four Chinese executives at Glaxo confess on state television to the bribery and fraud scheme.
August 2014Mr. Humphrey and Ms. Yu are convicted of illegally obtaining government records about individuals during their corporate investigations, a charge they denied. They each served two years in prison.
Sept. 19, 2014 At a one-day trial held in secret, Mr. Reilly, the head of Glaxo’s Chinese operations, and other company executives plead guilty to fraud and bribery. Glaxo agrees to pay a $500 million fine. Mr. Reilly is deported from China.
“…Britain’s Serious Fraud Office has launched a formal criminal investigation into GlaxoSmithKline’s sales practices, piling further pressure on the drugmaker which is already being investigated by Chinese authorities and elsewhere amid allegations of bribery.
Britain’s biggest pharmaceutical company, run by Sir Andrew Witty, said it had been informed on Tuesday that the SFO had “opened a formal criminal investigation into the group’s commercial practices”.
“GSK is committed to operating its business to the highest ethical standards and will continue to cooperate fully with the SFO,” it added. A spokeswoman was unable to give further information. It is understood the SFO is looking at possible patterns across numerous global jurisdictions including China.
Under the 2010 Bribery Act, the SFO has powers to investigate and prosecute corruption at home or abroad. In some circumstances companies can be considered for immunity from prosecution if they can demonstrate they have been proactive and alerted SFO investigators to evidence of wrongdoing as soon as they found it…”
Following on from my post two days ago (about Erika Kelton-Whistle-Blower attorneys’- article on GSK CEO Andrew Witty in Forbes online), GSK whistleblower Greg Thorpe left some interesting comments on it. (see here)
I have long thought that GSK’s 3 Billion dollar fine gave merely the appearance of justice-to the media and the public- but didn’t really deliver it at all. The only ones that really benefited from this 3 Billion dollar fine were the many attorneys involved and GSK themselves. Patients did not get justice, many people were harmed and some died. There was no real justice for those harmed.
On the surface of it, it seems like a lot of money, and a big fine, but 3 Billion is nothing to GSK, it’s around 3 months profit, and in any case- the profits that they made -pushing the various drugs detailed in Greg’s complaint off label- over the decade that the case was (unethically) sealed-and the years previous (to when Greg raised the alarm) more than made up for the criminal behavior that GSK were fined for anyhow.
As Greg so perfectly put it- this fine was a ‘gift’ to GSK.
Disturbingly also, GSK were then fined 2 years later (500 million) in the biggest corporate bribery scandal in China. It seems that GSK broke its corporate integrity agreement (one of the main stipulations for GSK’s fine with the US department of Justice) literally less than 2 years after it signed it. Was GSK setting up this bribery network during the time it was signing this corporate integrity agreement with the US department of Justice? Who was overseeing the funding of GSK’s elaborate bribery scam? that’s something that journalists and the media should be researching to find out…
Personally, I don’t think that GSK will be brought to justice in the UK, or the US, for any of this extremely unethical and immoral behavior. GSK operate above the law because they are a cash cow for the UK economy; they are hugely influential over politics, healthcare, universities, and the media- globally. They are an unimaginably profitable company, and their stranglehold upon powerful people, and organizations around the world (from political sway to university/academic control), stretching back about a century, keeps them protected from facing justice for any of the crimes that they commit.
GSK epitomize an evil, untouchable, unaccountable corporate entity that has influence and power beyond our imaginations. They get away with corporate fraud, bribery, harm to patients (and often corporate manslaughter of patients) because the governments and justice systems (particularly, in the UK, Europe and US) are nefariously influenced by GSK’s huge financial, legal and corporate power. They have every facet of society in their pocket…
Like big oil and the military industrial complex, the big banks etc, Big Pharma’s like GSK are literally untouchable. From time to time they face paltry, meaningless, fines, such as the department of Justice charade- however their corporate culture remains the same.
They hire people like Andrew Witty to become the face of their new branding strategy, but they never ever atone for many of the crimes that they commit.
At the end of the day, it’s all about money and greed…
In this corporate dominated world, the individual is considered value-less and disposable..
The average joe, on the street; the ordinary consumer or patient- has little or no power, to fight these kinds of corporations. If big oil destroys the environment, it doesn’t have to face any real justice, if the military industrial complex wants to fund wars in the middle east, leading to deaths of innocent people in those areas, maiming and dismembering kids and women, and men- it’s allowed to, and if Big Pharma wants to sell a dodgy drug to you, and lie about side effects, and even kill you and get away with it, it’s allowed to do this without proper recourse.
The CEO’s of these entities, are so rich, and well protected by the high political, legal and professional class, that they can simply do what they please, and at the end of their tenure, they can ride off into the sunset with multi-million pound nest eggs and golden parachutes. It doesn’t matter what the corporation does while the CEO is in charge, even if the company commits fraud continually, and pushes drugs off-label to people harming them and sometimes killing them- the CEO’s are let off the hook…
They are untouchable…
We are at their mercy, and they have no mercy..
They behave sociopathically because that’s the nature of how they do business. Despite protestations of new ethical branding, they are unable to change because the corporate environment in which they thrive doesn’t allow for humane characteristics.
If GSK think that I am wrong about anything that I have written on my blog, I am open to amending any blog post to set the record straight, and furthermore I would be happy to discuss any of the issues raised on this blog with Andrew Witty, the CEO, of GSK anytime and anyplace (as long as its recorded and released to the public) so there you go Andrew, take me up on that offer anytime you wish- and show the world that GSK are really concerned with ‘patients first’ and ‘transparency’ – prove to the world that you’re not the corporate lackey that we all think you are…
Erika Kelton and her so called whistleblowers are frauds, period.
Kelton told me specifically in a letter that “Off label marketing is not fraud”.
Her firm would not take this case until they found out I was right. Both her me too whistleblowers were terminated GSK employees and Matt Burke was terminated for off label promotion as a Regional Manager, forcing some 200 plus representatives under him to do the same.
This was AFTER I went to the highest ranking people in the company, complaining of off label fraud and kickbacks.
These clones of me used much of the same information I sent Kelton…only to file a separate case about 4 months AFTER I had to get some rookie counsel to represent me.
Her version of the story and their statements are not only false and misleading but probably defamatory to my position on the case. The Department of Justice gave ME standing as first to file and my attorneys handled the award.
The award was decreased to the minimum largely because her “me too” terminated clients were actually deemed ” planners and initiators ” of the Fraud.
This was a 9 year joke, and that is the time it took the DOJ to decimate my complaint and reduce it from some 350 pages with 750 exhibits to some 80 pages or so of a huge quid pro quo to GSK.
I have a lot more to say on this and it was largely Kelton and her boys inaction and lack of substance on the major drugs…Paxil, Imitrex, Zyban and Wellbutrin that the settlement was so paltry.
The settlement amounted to 3 months of PROFIT for GSK. It makes me sick, and Kelton declares victory ? I call bullshit.
Criminal actions no doubt occurred over these 9 years including an illegal seal from the public on the case….9 years !! Sara Bloom, Kelton’s buddy was lead investigator and seemingly spearheaded the Gift to GSK. I have questions as to the role of Eric Holder also in this whole charade.
A GSK defense attorney became Attorney General 5 years into the case. He supposedly recused himself, but there are indications he had his moles in the DOJ putting the clamps on any criminal indictment…let alone the insanely low penalty. Hundreds of thousands of patients were killed or suffered…nothing done. A slap on the wrist. Holder is now back at the same law firm, DEFENDING GSK. Anyone smell the RAT ?
I have a lot more intimate knowledge about all of this…and have already been threatened for coming forward.
I was the ONLY whistle-blower who was wrongfully terminated for coming forward.
So Erika until you can stop lying and putting lipstick on this pig of a case…that cost the taxpayers Tens… if not hundreds of millions of dollars…
I suggest you keep your mouth shut and comply with my request to show how you really handled the information I first gave to you…when you would not file, and declared in writing that “OFF LABEL DETAILING IS NOT FRAUD”…. It certainly is, especially when people die because of statements made to physicians, even by your own so-called whistle blowers
To Forbes …..
If you want the truth about this whole incredible 9 year quid pro quo….I will give you the truth, and not in some self serving article put forth to generate business for a lawfirm.
The article makes me want to puke. You will get the whole truth from me, not just what some me-too attorney wants you to believe.
Truth man, why don’t you publish the letter to me from Kelton ? Says it all on her integrity and real role in the case on the “killer” off label promotion…not some innocuous promotion on Advair for mild asthma, which in most cases helped patients….which she lays claim to…..having nothing on Imitrex, Paxil, or Avandia.
The really harmful drugs. A useless pawn, and I have the evidence, including HOW she got into the case, and it was not because of the DOJ at all initially.
Get real Erica, you can’t hide the real truth on this Government Fraud forever. That is the bottom line.
The truth will come out, and not in a few paragraphs here…sooner or later.
One other note, Kelton insists that GSK listen to internal whistleblowers.
Certainly I agree…however this is coming from an attorney and a lawfirm who would not listen to the only internal whistle-blower in the 3 Billion dollar gift.
Maybe Erica should take a little of her own advice..instead of only listening to terminated employees, planners and initiators of the Fraud, then claiming THEY
were the leading whistleblowers.
They both secured good jobs outside the company and lived the good life for ten years….while I went through hell for reporting while employed, then was subject to wrongful termination after almost 25 years with the company.
Really Erika…you can fool some of the people some of the time..as the saying goes.
Matt Burke, your main bread and butter, as you know… would not even put his name on the complaint until I forced him to do so, or hit the road. Some hero ?
Come clean, seriously…it is about more than generating business for your firm through false and misleading statements. Bottom line you and your clients only got in the way in this case, especially in settlement discussions. The truth hurts, huh ? If I am wrong Burke can reply….but he will not.
He was grossly unjustly enriched and could be in prison, instead of living the good life off of my initial complaints.
Thanks to the U.S. Justice Dept. complaint in the suit recently settled by GlaxoSmithKline for a record $3B: http://www.justice.gov/opa/documents/gsk/us-complaint.pdf
–we can follow the history of this study in more detail, based on the internal GSK documents discovered during the proceedings, and see just how the data were manipulated for marketing purposes.
Study 329, directed by Dr. Martin Keller of Brown University, was one of 3 clinical studies in children and adolescents that were all interpreted by GSK scientists between August and October, 1998 to be discouraging. Study 329’s protocol specified two primary endpoints, and on neither measure did Paxil do better than placebo. The study also logged in 11 serious adverse reactions to Paxil, much more than in the placebo group, including 5 with agitated or suicidal behavior, the major risk for which eventually the FDA issued a black-box warning for the SSRI class of antidepressants…”
Editorial Note: Following the publication of Study 329 Restored, Martin Keller and his co-authors gave an initial response in which they said Nobody Pinned Anything on Us and also that they would respond in more detail later. It took four months for this response to appear. Our Response will follow in the next post and after that we will update our background correspondence with BMJ.
This and earlier correspondence and all the data from the Study 329, BMJ reviews of the study, a timeline of the history of SSRIs and all controversies linked to these drugs is all available on Study329.org.
There are two further Study 329 articles making Study 329 the most intensively studied Clinical Trial ever. The Study 329 website will make all this material available for anyone who wants to see how clinical trials operate – this study is not an anomaly, it is standard industry practice.
The picture above was dubbed Three Amigos by its creator. It features Charlie Nemeroff, Marty Keller and Alan Schatzberg. A picture that is at least as appropriate is below linked to the conflict of interest declaration.
Martin B Keller, Boris Birmaher, M.D., Gabrielle A. Carlson, MD, Gregory N. Clarke, Ph.D., Graham J. Emslie, M.D., Harold Koplewicz, M.D., Stan Kutcher, M.D., Neal Ryan, M.D., William H. Sack, M.D., Michael Strober, Ph.D.
attn: Martin B Keller, MD, 700 Butler Drive, Blumer 120, Providence, RI 02906, USA
Re: Restoring Study 329: efficacy and harms of paroxetine and imipramine in treatment of major depression in adolescence. Response from the authors of the original Study 329
The BMJ article entitled “Restoring Study 329: efficacy and harms of paroxetine and imipramine in treatment of major depression in adolescence” reanalyzed data from the original Paroxetine 329 study, a double-blind placebo controlled comparison of paroxetine to imipramine. Paroxetine 329 was designed between 1991 and 1992. Subject enrollment began in 1994, and was completed in 1997. Academic psychiatrists designed the study, with very little change by GSK, which funded the study in an academic / industry partnership. The goal of the study was to advance the treatment of depression in youth, rather than primarily as a drug registration trial.
Overarching issues with the “Restoring Study 329” include:
Authors of “Restoring Study 329” evidenced both bias and a lack of blind ratings. In a recent article about “Restoring Study 329” in the Chronicle of Higher Education, Dr. Jureidini is quoted as saying: “We don’t think we’ve done the definitive analysis. It’s not something that can be done absolutely objectively, particularly the interpretation of harms. We can’t protect ourselves completely from our own biases.” Biases are a serious consideration for Restoring Study 329 because Dr. Jureidini, as he declares in a Footnote on the subject of “Competing interests”, served as an expert witness for plaintiff’s lawyers in legal suites against GSK related to Study 329. In that work Dr. Jureidini would have studied all available data looking at both efficacy and suicidal side effects, using many different approaches to best capture any potential harms.
The “restoring invisible and abandoned trials” (RIAT) approach to reanalyzing published studies may provide general guidelines but we could not find publications or available working RIAT documents on detailed protocols. Lack of detailed methodology is a serious concern because there is general consensus in the field that there is not, nor never will be a single correct approach to reanalysis. Small differences in analysis frequently make big differences in statistical results and conclusions.
“Restoring Study 329” did not consider available knowledge 24 years ago, when Paroxetine 329 was developed and performed. Clinical research methodology has evolved considerably in the past two decades. These aspects are addressed in comments by established investigators not involved in Paroxetine 329. For example, Referring to “Restoring Study 329” as reported in Psychiatric News Alert  Mark Olfson said, “However, the new reanalysis does not alter the totality of clinical trial evidence that continues to support the safety and efficacy of SSRIs for adolescent depression.” And Daniel Pine said “We have known for some time that antidepressant medications have both significant benefits for some children as well as significant risks for other children. This new analysis really does nothing to change this knowledge, and provides no new insights into what we have known about these medications for the past few years.”
Antidepressants considered as a group are superior to placebo for the treatment of anxiety disorders and for depression in adolescents, with similar overall response rates in anxiety and depression. 
The two primary outcome measures in Paroxetine 329, did not reach statistical significance. The abstract of the published paper noted: (1), “The two primary outcome measures were endpoint response (Hamilton Rating Scale for Depression [Ham-D] score ≤ 8 or ≥50% reduction in baseline HAM-D) and change from baseline HAM-D score.” In Table 2, the p value for the first primary endpoint (Ham-D score ≤ 8 or ≥50% reduction in baseline HAM-D) was reported at p < 0.11 for paroxetine versus placebo. In the same table, the p value for change in HAM-D total score is reported at p < 0.13. While both outcomes were in the direction of a better response for paroxetine over placebo; neither reached our critical alpha level of 0.05. This is clear in the abstract and text of the publication.
In the interval from when we planned the study to when we approached the data analysis phase, but prior to the blind being broken, the academic authors, not the sponsor, added several additional measures of depression as secondary outcomes. We did so because the field of pediatric-age depression had reached a consensus that the Hamilton Depression Rating Scale (our primary outcome measure) had significant limitations in assessing mood disturbance in younger patients. Taking this into consideration, and in advance of breaking the blind, we added secondary outcome measures agreed upon by all authors of the paper. We found statistically significant indications of efficacy in these measures. These secondary outcomes were clearly reported as separate from the negative primary outcomes.
Thus, the authors of “BMJ-Restoring Study 329” were incorrect in stating that “Both before and after breaking the blind, however, the sponsors made changes to the secondary outcomes as previously detailed. We could not find any document that provided any scientific rationale for these post hoc changes and the outcomes are therefore not reported in this paper.” Rather, secondary outcomes were decided by the authors prior to the blind being broken. Secondary outcome measures are frequently, and appropriately, included in study reports even when the primary measures do not reach statistical significance. The authors of “Restoring Study 329” state “there were no discrepancies between any of our analyses and those contained in the CSR [clinical study report]”. The disagreement on treatment outcomes rests on this arbitrary and non-blind dismissal of our secondary outcome measures.
In the abstract we stated “Conclusions: Paroxetine is generally well tolerated and effective for major depression in adolescents.” In this sample and with the state of knowledge at the time, it was justified and appropriate.
Our goal was to learn as much as possible about the use of this compound in youth, so that we could understand what role it (and by extension other SSRIs) could play in the treatment of adolescents with MDD. For us the question was given (1) the data distribution and statistical results for efficacy and side effects that we saw in the study, and (2) that there was well replicated research evidence of efficacy and relative safety of paroxetine in adults, what conclusions should be drawn from our data? The clinical outcomes were substantially in the right direction, with a number of them reaching the 0.05 level of statistical significance. The clinical results comparing paroxetine placebo to and imipramine to placebo paralleled those reported in adults. Side effects were similar to what was known in adults. Thus we reached, the conclusions reported.
The “Restoring Study 329” reanalysis uses the FDA MedDRA approach to side effect data, which was not available when our study was done. That one can do better reanalyzing adverse event data using refinements in approach that have accrued in the 15 years since a study’s publication is unsurprising and not a valid critique of Paroxetine 329 study as performed and presented.
We emphatically disagree with the “Restoring Study 329” position that statistics are not useful in understanding adverse side effects and that each individual reader should decide for herself when a difference in rates of adverse side effects is meaningful. Statistics offer several approaches to the question of when is there a meaningful difference in the side effect rates between different treatments.
Specific methodology problems in the reanalysis of the “harm” data are as follows: 1) The authors choose a non-random subsample of 85 subjects who were withdrawn from the study plus 8 subjects whom the authors labeled “suicidal” based on their inspection of the data; 2) a different instrument was utilized to re-score the harm effects and only one of the authors was trained in the scoring of the instrument; 3) some side effects were arbitrarily interpreted (e.g., upper respiratory symptoms were labeled as “dystonia” and emotional lability labeled as “suicidality”); 4) in the original paper, side effects were analyzed only during the acute phase, but in the reanalysis, the authors analyzed them during the acute phase, as well as the tapering and follow up phases of the study; and 5) in the original study patients were interviewed face-to-face whereas the reanalysis was based only on the interpretation of the data; and 6) importantly, the two authors were not blind to patients’ randomization status.
Suicidal ideation and attempts
Our field’s understanding of how to approach analysis of suicidal ideation, suicide attempts, and completed suicide has advanced enormously since publication of study 329. Two definitive reanalyses of the suicidality with antidepressants in adolescents include: 1). The 2003 FDA reanalysis of all RCT data of SSRI studies in youth for all indications. In the FDA analysis the average risk ratio for SSRI versus placebo treated subjects was 1.96 (CI: 1.28-2.98). Considered separately Study 329 did not reach statistical significance for increased suicidality (CI: 0.42-33.21). 2). The methodologically superior reanalysis by Bridge and colleagues also found that in study 329 there was no significant risk difference between paroxetine and placebo. 
Paroxetine treatment in youth does not appear to significantly differ from other SSRIs in the risk of suicidal ideation or attempts and whether SSRIs increase or decrease completed suicide remains an open question. [8-12]
We strongly support efforts to make anonymized raw data from scientific studies available for reanalysis. The validity of “Restoring 329”, however, is doubtful because of author bias and substantial problems with RIATT methodology. To describe Paroxetine 329 as “misreported” is pejorative and wrong based on both state-of-the-art research methods 24 years ago, and retrospectively from the standpoint of current best practices.
Martin B. Keller, M.D. Boris Birmaher, M.D. Gabrielle A. Carlson, MD Gregory N. Clarke, Ph.D. Graham J. Emslie, M.D. Harold Koplewicz, M.D. Stan Kutcher, M.D. Neal Ryan, M.D. William H. Sack, M.D. Michael Strober, Ph.D.
Le Noury J, Nardo JM, Healy D, et al. Restoring Study 329: efficacy and harms of paroxetine and imipramine in treatment of major depression in adolescence. BMJ 2015;351:h4320.
Keller MB, Ryan ND, Strober M, et al. Efficacy of paroxetine in the treatment of adolescent major depression: a randomized, controlled trial. J Am Acad Child Adolesc Psychiatry 2001;40(7):762-72.
Bridge JA, Iyengar S, Salary CB, et al. Clinical response and risk for reported suicidal ideation and suicide attempts in pediatric antidepressant treatment: a meta-analysis of randomized controlled trials. Jama 2007;297(15):1683-96.
Hammad TA, Laughren T, Racoosin J. Suicidality in pediatric patients treated with antidepressant drugs. Arch Gen Psychiatry 2006;63(3):332-9.
Bridge JA, Birmaher B, Iyengar S, et al. Placebo response in randomized controlled trials of antidepressants for pediatric major depressive disorder. Am J Psychiatry 2009;166(1):42-9.
Gibbons RD, Brown CH, Hur K, et al. Early evidence on the effects of regulators’ suicidality warnings on SSRI prescriptions and suicide in children and adolescents. Am J Psychiatry 2007;164(9):1356-63.
Olfson M, Shaffer D, Marcus SC, et al. Relationship between antidepressant medication treatment and suicide in adolescents. Arch Gen Psychiatry 2003;60(10):978-82. 10. Gibbons RD, Hur K, Bhaumik DK, et al. The relationship between antidepressant prescription rates and rate of early adolescent suicide. Am J Psychiatry 2006;163(11):1898-904. 11. Valuck RJ, Libby AM, Sills MR, et al. Antidepressant treatment and risk of suicide attempt by adolescents with major depressive disorder: a propensity-adjusted retrospective cohort study. CNS Drugs 2004;18(15):1119-32. 12. Gibbons RD, Mann JJ. Strategies for quantifying the relationship between medications and suicidal behaviour: what has been learned? Drug Saf 2011;34(5):375-95.
This picture comes from Carl Eliot based on Johanna Ryan’s noting a curious phrase in the conflict of interest statement from Gabrielle Carlsson below.
Competing interests: Please see attachments to this response – the attachments are available on Study329.org.
Nobody has retracted or apologized for a study that was an academic disgrace—but a marketing coup for GSK—which may well have caused untold numbers of deaths, suicide attempts and irreversible anguish to myriad families. Can we stand idly by when we’re told that it “accurately reflects the honestly-held views of the clinical investigator authors who do not agree that the article is false, fraudulent or misleading.”? What is the current market value of the honestly-held views of people who tell lies?
I’d like to reflect on a few major aspects of Study 329 and the recent BMJ restoration study (RS) which raise fundamental ethical issues, and which pose some theoretical problems or raise other important issues which haven’t yet been scrutinized. And, by counterpointing Paxil against Thalidomide, I shall suggest that a seismic cultural shift has made studies like Keller’s almost inevitable.
1. Ethics and Academic Integrity
Study 329 forces us to confront the ethical question once again, before it’s too late, and question the claim that the investigators were chosen only for their expertise, their interest in the subject and their capacity to recruit volunteers. Might they not have been in the pay of GSK, or have been friends, ex-students or colleagues of people like Biederman, Keller, Krystal or Nemeroff? Or chosen for their commitment to drug solutions, regardless of awkward research findings, in line with the FDA which wrote at the time that there may be negative findings even in trials of drugs they know really work? Even at the initial stages, then, there was plenty of room for manoeuvre, allowing GSK and its (paid?) investigators to take advantage of a fuzzy diagnostic category, to cherry-pick the subjects most likely to produce favourable outcomes and to discount the gravity or relative severity of an adverse event if it suited their purposes.
The sociopathic lack of remorse and moral consciousness shown by GSK, Keller, et al., became most shockingly apparent early on, in GSK’s serial re-writing and occlusion of troubling data — designed to stop negative results leaking out to doctors, the public or their sales staff. In fact, a GSK internal memo showed that the company knew that their studies had failed to demonstrate efficacy since at least 1998; and in 2003 the MHRA revealed that GSK’s own studies showed that the drug actually trebles the risk of suicidal thoughts and behaviour in depressed children. Outside the Holocaust, I’ve never come across a more chilling, amoral or sociopathic memo than the one they sent out to senior management, clarifying their decision “to effectively manage the dissemination of these data in order to minimize any potential negative commercial impact…It would be commercially unacceptable to include a statement that efficacy had not been demonstrated, as this would undermine the profile of paroxetine.” In the same cynical vein, an email from a PR executive working for GSK said: “Originally we had planned to do extensive media relations surrounding this study until we actually viewed the results. Essentially the study did not really show it was effective in treating adolescent depression, which is not something we want to publicize.”
An important ethical barometer is the prevalence of authors’ conflicts of interest (COIs), though it is really a wider, cultural, problem, for a large majority of medical and science journals in the world have no COI policy. While we weren’t told about the authors’ COIs here, we now know those of Keller, Ryan, and of GSK employee Mc. Cafferty, whose affiliation was hidden. We know, for example, that Shelley Jofre sent emails to Dr. Ryan in 2002 asking questions about the safety of Paxil, whereupon this “independent” researcher forwarded them to GSK, asking for advice on how to respond to her! We know also, thanks to Peter Doshi, the extent to which Karen Wagner was beholden to BP. I have since followed up her case: it beggars belief. Hunting down the COI hare of the other “authors” could bring to light some very damning evidence indeed.
The prevalence of ghostwriting is another disturbing example of ethical indifference: David Healy, who has monitored this phenomenon rigorously for years, estimates that up to 50% of apparently serious academic psychiatric studies are ghostwritten. Could this be a devious way of getting around the ban on off-label promotion?
The rampant, unethical ubiquity of ghost writing has sullied the reputation of numerous academics and their institutions in the U.S. Hannah Arendt’s reflection is apposite here: “When all are guilty, no one is; confessions of collective guilt are the best possible safeguard against the discovery of culprits, and the very magnitude of the crime the best excuse for doing nothing.” Here, however, we have no confession of collective guilt; not surprising, since guilt implies a minimal moral conscience, which was so rare here and among Chemie-Grünenthal’s (C-G) top brass in the thalidomide tragedy, some of whom had seen active service in the camps, and most of whom had impeccable Nazi credentials. This brings to mind those studies some years ago showing that a large proportion of industry CEOs could be classified as sociopaths: another indicator of a huge cultural shift. Are we now simply facing the inevitable consequences of rampant neo-liberal economics?
We could of course argue that this entire affair could be reduced to just one issue: is there any justification for ghost-written academic studies, especially when they have serious safety implications? If it is deemed to be professionally acceptable, then the “authors” of Study 329 have committed no sin at all: it’s just par for the course. After all, PLoS Medicine, which has been leading the charge against ghostwriting, found that only 13 of the top 50 medical schools in the U.S. have a policy that prohibits it.
At a 2011 U. Toronto conference on ghostwriting, Trudo Lemmens, a law professor, said that biomedical ghostwriting is a public health issue needing serious attention, since erroneous use of pharmaceuticals is a leading cause of hospitalization. Many studies, like Keller’s, contribute to that by hiding adverse events, negative data, and over-emphasizing benefits, so academics fronting such studies are responsible for any ensuing prescriptions and harms. Yet there seems to be no backing in law for those wanting to hold academics legally and professionally accountable: ghostwriting is perfectly legal, widely practiced yet officially considered unethical, so universities are nicely protected when they routinely protect shady researchers, who bring them prestige and large research grants. McGill, though, showed commendable rigour and oversight in the Sherwin/Wyeth case.
Doshi and Healy have no doubt that Study 329 was ghostwritten, but I’m not yet absolutely sure about this, though the circumstantial evidence is overwhelming. Keller’s recent letter defending his study and criticizing the RS does indicate that the “authors” were centrally involved at all stages of the study. Could they be forced to take an oath on this, as was Sally Laden? I’m still very unclear about which authors knew what, if anything: the much- compromised JAMA tried, unsuccessfully, to find this out when first offered the article. Keller’s slippery filmed statements and his facial language made me very suspicious indeed, as he repeatedly dodged interviewers with statements like: “I don’t remember matters like this…I never read such tables.”
However, let’s now suppose it wasn’t ghost written, then Keller has painted himself into an inescapable corner, since the only excuse he could proffer for producing scholarly work that drew conclusions contradicting the raw data was that it was, in fact, ghost written. Either that or they produced scholarship that would not have been accepted from an undergraduate, but was accepted by the editor of a prestigious journal who brushed aside THE JOURNAL’S OWN REVIEWERS’ DEEP RESERVATIONS about the study. Why?
2. Pseudo-science, Lies, Damn Lies, and Statistics
Another ethical casualty of Study 329 was peer review, a protocol designed to guarantee the integrity, independence and rigour of published scholarship: JAMA followed the protocol strictly, and rejected the study, but JAACAP did not. How did it get away with so few official criticisms or sanctions? The story behind the editor’s ultimate acceptance of it could prove very incriminating, and throw up even more serious questions about academe’s failure to uphold minimal standards by publishing a labyrinth of lies, half-truths and lies by omission. The intellectual dishonesty displayed here by members of a prestigious Ivy League university is a bloody blot on the escutcheon of American academic integrity. Standards like this in very high places should not be tolerated by any academic community worth its salt.
The RS also highlighted an area which is rarely discussed: statistical analysis. We have become hung up on whether the results of a trial had statistical or clinical significance, but this study reminds us of the value of patient narratives, “merely anecdotal” reports and descriptive statistics, as did the thalidomide tragedy. Here, the commitment to descriptive statistics was abandoned, probably because they might have allowed non-specialists to make judgments and informed decisions, whereas more sophisticated techniques offered a smokescreen to hide behind for years, thus allowing billions to accrue. How many of us are sufficiently qualified to evaluate what the statisticians tell us, and how they tell it? Unsurprisingly, GSK told us that they employed the best ones here: this may well have been the only true statement they uttered. It was in their interest to hire the top people, pay them a fortune and make it clear that, without making fools of themselves professionally, they should choose designs, protocols and methods of analysis likely to give the required positive results.
Jureidini’s team forces us to radically critique another untouchable: RCTs, whose status, integrity and even utility must now be thrown into question. Following Breggin, Cohen, Doshi, Harrow, Healy, Kirsch, Moncrieff, Timimi, Whitaker et al., we RCT sceptics now have much more precise ammunition to fight with. In their wake, can we continue to have faith in any previous RCTs and meta-analyses when so many negative trial results are never published and when fundamentals like blinding and adherence to protocols are so flagrantly flouted? Is this just the tip of a very large, murky and treacherous iceberg? After all, Study 329 was published in a top journal, yet deviated from the original protocols, added several new outcome measures, sometimes after un-blinding, and drew conclusions directly at odds with their own findings. In particular, I am deeply suspicious about its level of sustained adherence to blinding protocols.
Over the years, we have had many scandalous instances of unethical manipulation which allowed BP an easy ride. Keller et al. gave us an egregious example of this when they disbanded reliance on Hamilton, but never registered the change, blithely declaring that since the profession had moved beyond Ham-D between 1993 and 1998, they needed to look at other more appropriate measures! As we say in Dublin: ”Pull the other one, it has bells on it!” I know of no evidence that he was right, and their unseemly scratching around for scales, criteria and about 20 new secondary outcomes that might show Paxil in a more favourable light was sad, desperate, even comical.
In short, we’ve had many reasons to be extremely sceptical of RCTs and critical of the uses to which they have been put: Study 329, for example, was merely a super-lucrative advertisement for a dangerous, addictive drug with doubtful benefits and numerous toxic side-effects. (In 2002 over two million paediatric Paxil prescriptions were written in the USA alone, just in time to beat the patent deadline.) Now whereas the law, the FDA and blind faith in RCTs bought an awful lot of time for GSK to make many billions unimpeded in subsequent years, a modest number of academic articles and individual “anecdotal” reports from doctors between 1958 and 1961 stopped thalidomide in its tracks by 1962. They didn’t hang about too long in those days: one critic was scandalized that C-G knew for six whole weeks of the dangers posed by thalidomide!
The RS, then, may well deal a mortal blow to our naïve faith in academic integrity, our bedazzlement by RCTs, and to our easy acceptance of them as gold-standard benchmarks of truth and rigour. It should, at the very least, put them in their place as one potential, yet fallible, tool in the arsenal of psychiatry, but one that should never be allowed to usurp the centrality of the empathic, dialogic relationship between a singular patient and healer, nor the full story of individual suffering, which is obfuscated by algorithms and statistical averages.
On the other hand, the RS might also, paradoxically, provoke a more positive, nuanced view of RCTs, suggesting that some modicum of scientific respectability could be maintained, but NOT IN THE PRESENT VENAL CULTURE: Jureidini et al. have shown us what they might yield if carried out rigorously by top independent researchers putting in Herculean work for no financial gain: had their study appeared in 2003 many wasted billions and many, many lives might have been saved. But how often are we going to get such a highly qualified, deeply committed, hard-working group together in the present climate, with its routine financial inducements? Should we not, perhaps, use the thalidomide case to reconsider the value of strong, repeated “anecdotal” pointers, thus emphasizing individual stories of psychotropic drug use and the withdrawal therefrom? David Healy, Luke Montagu and James Davies have given us a very strong lead in this domain.
Another problem hovering over, but not addressed, by both studies is that of causality: in psychiatric and neuroscientific discourse there’s a lot of slippery semantic skating going on – “linked to,” “associated with,” ”implicated in,” “correlated with,” and the like, but rarely “caused by.” This is not always helpful, but it does bespeak an understandable and judicious reluctance to assign one cause to any outcome. The Study 329 authors cleverly exploited this difficulty when they tried to minimize serious adverse effects related to treatment by declaring that “causality cannot be determined conclusively.” A single cause for any illness can rarely be proven conclusively – even in cancer, as a number of commentators have pointed out. Thalidomide, however, does appear to have been the sole cause of all those awful deformities; but even in a case like PKU, which is habitually deemed to have a purely genetic aetiology, the gene will not express itself if rigorous environmental controls are put in place – in this case, diet.
Now while it seems clear that judges, biomedical academics and psychiatrists have grossly underestimated antidepressants’ (ADs) contribution to suicidal behaviour, it is also possible to overstate the case by insisting that a given SSRI caused violent, murderous or suicidal behaviour, thus negating the potential impact of other confounding variables. Yet some, but not many judges, taking the advice of people like Peter Breggin and David Healy, have declared that an AD like Prozac had indeed induced a murder. But, pace both of these great fighters, I’d suggest that legal sanctions would be far easier to obtain if we focussed not on a conclusive single cause for a violent act, but on the very high risk factors associated with a given SSRI and on the full personal and contextual story.
3. The Matter of Suicide
In the opening of The Myth of Sisyphus, Camus argued that suicide is the only serious philosophical question, but for many, suicidal ideation (SI) is a dangerous by-product of SSRI consumption; a serious adverse effect. And further, SI means different things to different researchers. For some, it is a particular preoccupation with suicide, ranging from regular random thoughts, to more sustained and frequent thoughts of suicide. For others, however, SI includes suicidal gestures or behaviours such as the planning or rehearsing of the act, incomplete attempts, or more serious attempts designed to fail. Even the MedDRA confuses the issue by coding suicidal ideation OR self-harm OR attempted suicide as suicide events. The RS rightly criticizes Keller for using the term “emotional lability” to fudge the severity and differences in suicidal behaviours, but have they not also engaged in some fudging by lumping suicidal thinking and events under one heading, “suicide-related adverse events”?
There is too much fuzzy thinking here: surely logic and scientific rigour oblige us to clarify our terms and avoid assigning the same weight to SI and clear suicide attempts, since most people who have suicidal ideation do not go on to end their lives, even though it must be considered a (low?) risk factor for suicide? To put this in context, it was estimated that in 2008-9 over 8.3 million adults aged 18+ in the U.S. reported suicidal thoughts in the previous year, but of these, only one adult in 140, 60,000 people, actually took their own lives. SI does not usually mean that someone wants to die, but that s/he does have a desperate need to express her/his hopelessness, impotence, overwhelming pain or collapse of meaning. It may often be a natural strategy employed in a hopeless situation: an imaginative rehearsal or symbolic expression of entrapment in the reptilian freeze response; of the impossibility of fight, flight or social engagement, to put it in terms of Polyvagal Theory.
I’m suggesting, then, that we must beware of falling into the trap of dramatizing or pathologizing something that may be absolutely normal, even healthy, in certain circumstances: for example, if one is homeless, disadvantaged or marginalized, living in unbearable social conditions, or trying to deal with overwhelming loss or failure the lack of SI would surely be a highly dissociative move.
Pain, danger and thoughts of suicide often attend the birth-pangs of any major life transition or change in status, as it did for Tolstoy and J.S. Mill. (See James Davies’ fascinating book, The Importance of Suffering.) Camus’s Meursault normalizes suicide by reminding us that everyone at some time has wanted to kill the one s/he loves: for adolescents needing to separate and carve out their own identity such thoughts are routine, healthy, and not necessarily caused by SSRIs. And for them SI can be one way of managing the maelstrom of hormonal turmoil, passionate intensity, emotional lability and high-risk behaviour attending the scary transition from childhood to adulthood. It may simply well be a way of saying that s/he sees no meaning in life and cannot go on this way any more, especially at a time of collapse in traditional values.
We need to remember, too, that modern adolescence, bereft of mentors, is a particularly fraught, unstable time, in which risky behaviour is far more common than in childhood or adulthood; one in which accidents are the main cause of death, followed by suicide, regardless of any SSRI consumption. (See Sarah-Jayne Blakemore’s research on risk-taking behaviour in adolescents.) For example, in one recent case it became clear that a vicious racism had fueled multiple murders in a local school. In another, a recent school killer’s notebooks showed that he was in a state of absolute despair because doctors had told him he was condemned to live with “a broken brain” for life.
However, well-documented adolescent suicide attempts do have to be taken very seriously, even though they may well be just last-ditch screams for help or understanding: after all, David Healy and others point out that for every eleven suicide attempts there’s one actual suicide.
I believe, then, that it is important to de-emphasize and downgrade SI since the term is used too loosely and can a have a positive valency. Why not confine the term solely to thoughts, and prioritize clear suicidal behaviours? And, taking into account the wider cultural framework, would it not make more sense for judges and researchers to focus on the individual contexts and narratives subtending acts of serious self-harm, clear suicide attempts and very uncharacteristic acts of violence? Drug are usually part of a much bigger story, which we neglect at our peril. Why not, then, let the law get on with assessing the strength of the circumstantial evidence and decide whether a given drug is a major contributor to a suicide beyond any reasonable doubt?
4. Neo-liberal Culture
Martin Keller recently made the point that since nobody has been able to pin anything on the authors, there’s obviously nothing to apologize for. The terrible thing is that he’s right: they have merely acted in a way that is condoned by academic journals, the FDA and the universities; sanctioned by the psychiatric establishment and the wider culture which makes it so easy for negative findings to run for cover, since there is no firm regulatory obligation to report all the results from clinical trials. In this case, Brown is in the dock, but numerous U.S. academic establishment have been regularly shamed, even though a few of them, like Harvard, have had the courage and integrity to come clean in similar cases, so why not Brown, whose officials conveniently lost some vital incriminating data? (Precisely the same thing happened with a vital incriminating registered letter at the C-G thalidomide trial.) Harvard did take some nebulous action against Biederman et al., but only when the scale of the deceit had become too blatant to hide. It is quite shameful that most U.S. universities routinely offer no comment when the media or people like Senator Grassley ask the tough questions about questionable research or COIs. Indeed, Grassley has said that they seem incapable of monitoring the COIs of faculty. Like the all-powerful gun lobby that even Obama can do little to tame, Marcia Angell’s 800-lb. gorilla has run amok, and thumbs its nose with impunity at the helpless Sorcerer’s Apprentice. And at all of us who protest so loudly and so often. But is this enough? Do the times not demand more concrete, radical action?
Is Study 329, then, not just one more shocking example of the mercantile values and the druggy doxa that permeate our entire culture? Obama’s choice when appointing the new FDA director is a stark incarnation of just how bad things are. So, before we all get too righteous and complacent we mustn’t forget that JAACAP, GSK, Keller et al. are simply following the ethos of our culture in which ethics and transparency have been all but abandoned, even at the top. Earlier this year, Scott, Rucklidge and Mulder studied the adherence, from 2009-13, by the editors of the five leading psychiatric journals to their own pious protocols of oversight and integrity, concluding that “most trials were either not prospectively registered, changed POMs or the timeframes at some point after registration or changed participant numbers.” When such oversight is so loose at the top, to whom do we turn for safe, rigorous research and unbiased guidelines? Quis custodiet ipsos custodes when they countenance criminal acts?
The Study 329 affair, then, underscores the fact that there is strong, but implicit, cultural permission given to BP and amoral academics for their chicanery since trial periods are so short, and post-marketing surveillance so weak and random. Our modern blind-eye culture has no problem with FDA laxity, blatant academic corruption and an increasingly perfunctory oversight by Congress and the law which permits direct-to-consumer marketing and off-label prescription, which in turn allows BP to profitably dispense with honesty, science or FDA approval.
Counterpointing the thalidomide with the Paxil affair, then, helps us to highlight a monumental shift in culture and values that lies very deep in the neo-liberal psyche, transcending Big Pharma, the universities et al. In the thalidomide case, the culture of the 60s enabled the remarkable integrity, rigour and persistence of the FDA’s Frances Kelsey who seems to have been fully backed by the FDA directorate, though one historian of the FDA wrote that she encountered some opposition there. And where she was supported by the wider culture, which subsequently lavished awards and encomia on her, our culture both encourages and rewards the likes of Keller et al. So in 40 years the 1962 amendment, designed to ensure the efficacy and safety of drugs, was emasculated, abused and disempowered by Big Pharma PR and cynical academics. Had thalidomide arrived in 1994 and been researched by such people, the laxity of the FDA, enabled by an ethics-free drug culture, would likely have ensured its continued presence on the market for years, producing millions of deformed babies facing early death or wrecked lives. Fortunately for mothers and new-borns back then academics had integrity: and the meteoric rise of BP power, allied to the prestige and often spurious truth-value of RCTs, was still some way off. Thus a small number of early academic studies, often in the BMJ, and many “merely anecdotal” reports, succeeded in ousting the drug before it got into its stride.
But, once again, what we’re really talking about here is a seismic cultural shift, over 40 years, which is underwritten by government and the law; one which finds no place for ethics, which favours permissive drug regulation, and a neo-liberal ethos in psychiatric practice, academia and the press.
Redmond O’Hanlon is an academic who has taught university courses in Ireland, the U.S. and Oxford, where he wrote his doctorate. He is at present tidying up the final draft of a book which attempts to bring some insights from the worlds of psychology, philosophy and the arts into critical psychiatry, with special emphasis on the importance of narrative, and on the dangerous fantasy of psychiatric diagnoses. His particular interests are depression, ADHD, trauma, the so-called personality disorders – and the greatest scam of them all, “schizophrenia.”
(Reuters) – Chinese prosecutors on Friday charged a British investigator and his American wife with illegally obtaining private information in a case that could be key to a bribery investigation against GlaxoSmithKline Plc.
Peter Humphrey and Yu Yingzeng ran risk consultancy ChinaWhys, whose clients included GSK, and their testimony is being closely watched for any comments on the British drugmaker.
The couple’s arrest over a year ago coincided with a government probe into allegations that GSK staff had funnelled hundreds of millions of pounds through travel agencies to bribe local doctors and health officials to boost sales and raise prices.
The prosecutors, laying out the charges at the start of the trial, said the couple had illegally obtained more than 200 items of private information, including household registration data, real estate documents and phone records, and then re-sold the data. GSK was not mentioned in the charge sheet.
According to the court’s official microblog, Yu said she did know that the third-party consultants ChinaWhys had hired to get the data had done so illegally.
“In other countries, we were able to conduct similar checks, including personal information and private transactions, legally through courts,” said Yu. “If we had known that it was illegal, my husband and I would have destroyed all traces of this information.”
While Chinese authorities have not openly connected the arrest of the couple to the GSK probe, Humphrey said in a note last year when he was already in detention that he felt “cheated” by GSK, adding that the drugmaker had not shared the full details of the bribery allegations.
A GSK spokesman has declined to comment on the trial. The drugmaker said in July that the issues relating to its China business were “very difficult and complicated.”
Foreign reporters were given unusual access to the trial after lobbying by the U.S. and British embassies.
The court’s microblog was updated regularly. A television in the media room also momentarily broadcast a grainy image which showed Humphrey, dressed in a polo t-shirt and jacket, sitting down inside the courtroom. He appeared to look weary.
The couple’s son, Harvey, was also in the courtroom with embassy officials.
CORPORATE DATA IN DEMAND
The trial has unnerved China’s risk consultancy community, whose members are much in demand by multinationals and foreign investors for information on potential partners or firms in China, where such data is not easily available.
It also coincides with a growing number of Chinese anti-trust probes that have seen authorities raid offices of Western firms, highlighting the obstacles foreign companies face in navigating China’s murky business world.
Foreign firms must adhere to anti-corruption laws while operating in China amid more stringent enforcement of the U.S. Foreign Corrupt Practices Act and an increase in the number of Chinese firms involved in overseas deals.
Humphrey is expected to plead guilty to the charges, which carry a maximum sentence of 3 years in jail. A verdict in the trial could take up to a month.
He worked for Reuters as a journalist in the 1980s and 1990s, and has previously apologised on state television for breaking any Chinese law.
In testimony read out in court, Humphrey said the due diligence services offered by ChinaWhys largely relied on publicly available records and interviews with executives.
“For projects that required background checks, we engaged a third-party consultancy that provided household registration data. We were only paying for their services; we never purchased or obtained such data directly ourselves,” he said, according to a transcript released by the court’s official microblog.
Humphrey also said he had not sold the private information obtained.
China has in recent years moved to tighten its privacy laws. In 2009, it amended its criminal code to ban the transfer, sale or gathering of Chinese citizens’ information by government firms and companies involved in telecoms, transportation, education and medical treatment.
(Additional Reporting by Engen Tham and Fayen Wong; Editing by Miral Fahmy)
The GlaxoSmithKline building is pictured in Hounslow, west London June 18, 2013.
(Reuters) – GlaxoSmithKline (GSK.L) faces new allegations of corruption, this time in Syria, where the drugmaker and its distributor have been accused of paying bribes to secure business, according to a whistleblower’s email reviewed by Reuters.
Britain’s biggest drugmaker said on Thursday it was investigating the latest claims dating back to 2010, which were laid out in the email received by the company on July 18.
The allegations relate to its former consumer healthcare operations in Syria, which were closed down in 2012 due to the worsening civil war in the country.
“We have zero tolerance for any kind of unethical behaviour. We will thoroughly investigate all the claims made in this email,” GSK said in a statement.
GSK has been rocked by corruption allegations since last July, when Chinese authorities accused it of funnelling up to 3 billion yuan (285 million pounds) to doctors and officials to encourage them to use its medicines. The former British boss of the drugmaker’s Chinabusiness was accused in May of being behind those bribes.
Since then, smaller-scale bribery claims have surfaced in other countries and GSK is now investigating possible staff misconduct in Poland, Iraq, Jordan and Lebanon.
Syria is the sixth country to be added to the list. The allegations there centre on the company’s consumer business, including its popular painkiller Panadol and oral care products.
Although rules governing the promotion of non-prescription products are not as strict as for prescription medicines, the email from a person familiar with GSK’s Syrian operations said alleged bribes in the form of cash, speakers’ fees, trips and free samples were in breach of corruption laws.
The detailed 5,000-word document, addressed to Chief Executive Andrew Witty and Judy Lewent, chair of GSK’s audit committee, said incentives were paid to doctors, dentists, pharmacists and government officials to win tenders and to obtain improper business advantages.
“GSK has been engaging in multiple corrupt and illegal practices in Syria and its internal controls for its Syrian operation are virtually non-existent,” the email said.
In addition, the email said GSK had engaged in apparent Syrian export control violations, including an alleged smuggling scheme to ship the drug component pseudoephedrine toIran from Syria via Iraq. Pseudoephedrine is regulated as a precursor for making methamphetamine.
GSK said it would investigate this matter along with the bribery claims.
“We welcome people speaking up if they have concerns about alleged misconduct,” the company said.
“On 18 July 2014, we received an email making claims regarding GSK’s former consumer operations and related distributors in Syria. Our compliance and legal departments were immediately notified and, as is our standard procedure, we immediately responded to the sender to confirm receipt and ask for more information.”
The whistleblower’s email said GSK used its own employees and Syrian distributor Maatouk Group to make illicit payments.
An official at Damascus-based Maatouk had no comment when contacted by telephone and said the company’s top executives were not immediately available.
The email listed a range of alleged improper activities, including payments of $1,500 each to two doctors to promote Panadol. The document also highlighted bribes paid to pharmacists and payments for medics to visit a Mediterranean holiday resort.
Further cash payments were related to the promotion of GSK cold and flu products, as well as its premium toothpaste brand Sensodyne.
Bribery charges around the world have tarnished the reputation of Witty and hit the company’s sales in China, at a time when it is also struggling with sluggish sales growth in the all-important U.S. market.
The allegations also leave it open to legal action – and potentially hefty fines – in Western countries where it is based or has a stock market listing.
Britain’s Serious Fraud Office launched a formal criminal investigation into GSK’s overseas activities in May and the U.S. Department of Justice (DOJ) is investigating it for possible breaches of the Foreign Corrupt Practices Act (FCPA).
In the email sent to GSK concerning Syria, the author said that the information would be passed on to the DOJ and the U.S. Securities and Exchange Commission (SEC).
A recently introduced SEC programme provides cash incentives for whistleblowers to report corporate malpractice, including breaches of the FCPA.
GSK has overhauled its marketing policies in the wake of concerns about possible past misconduct. It aims to become the first company in the industry to stop paying outside doctors to promote its products.
On Monday, Humphrey was shown apologising on state-run China Central Television, saying he and his wife “deeply regret” breaking any laws. He added he would not have worked with the drug manufacturer had the company informed him about the full details of the e-mails it received from whistle-blowers.
The Financial Times has learnt that GSK also found problems with its China vaccine business in 2001 that led to the firing of about 30 employees.
The US Department of Justice, which is investigating the current allegations, will take a close look at the earlier scandal, said a former senior DoJ official who asked to remain anonymous. If it found a pattern of such behaviour, the justice department was likely to take a tougher stance towards the company, legal experts said.
GSK has been under scrutiny in China since authorities last year accused it of paying up to $500m in bribes. The DoJ is looking at the case as part of a broader probe into drugmakers under the Foreign Corrupt Practices Act.
Two people familiar with the 2001 scandal said GSK found that staff were bribing Chinese officials and taking kickbacks. The company acknowledged the matter for the first time to the Financial Times, but said it had dealt with the issue rigorously.
Timothy Blakely, a partner at the US law firm Morrison & Foerster, said US prosecutors would have to examine the 2001 case under justice department guidelines to see whether there was a pattern of behaviour.
“It is something that a prosecutor would have to take into account,” said Mr Blakely.
GSK asked PwC to investigate the case when the corruption suspicions emerged. “These matters occurred over 12 years ago. We believe appropriate investigation and action was taken at the time,” it said.
One member of the PwC team in 2001 was Peter Humphrey. Now an independent investigator, he is being held in China on charges of illegally buying private information in connection with GSK’s current scandal.
The rapid move to hire PwC in 2001 contrasts with the response to the current scandal. After a whistleblower made allegations against the company last year, GSK first relied on an internal probe with external legal and auditor support. That inquiry found no evidence of systemic corruption, although some staff were dismissed for expenses irregularities.
GSK has since hired Ropes & Gray, a US law firm, to conduct an external inquiry. In May, Chinese police said they had evidence of “massive and systemic bribery”.
“We have zero tolerance for unethical behaviour,” GSK said. “We investigate any allegations put to us and take action where necessary.”
The earlier scandal came the year after GSK was formed via a merger of Glaxo Wellcome and SmithKlineBeecham. In late 2001, Paul Carter, GSK’s new China head, asked PwC to investigate after suspicions of corruption emerged, including the fact that two staff had been detained in China without him being told.
PwC confirmed the suspicions, and Mr Carter fired the Chinese head of vaccine sales in China. Mr Carter left GSK in 2005 long before the current problems emerged. He declined to comment.
Chris Baron, the general manager for the vaccines unit in 2001, denied knowledge of the bribery at the time. He was suspended and, soon after, left the company.
Mr Baron said PwC concluded he had “no personal involvement or knowledge” related to the bribery. But he said “there was some debate as to whether I may have been insufficiently diligent to spot the matter earlier”.
At the time of the 2001 incident, Sir Andrew Witty, GSK chief executive, was the company’s head of Asia-Pacific, but his responsibilities excluded China. GSK said Sir Andrew “was not involved in and was not aware of” the case at the time.
Sir Andrew has tried to cast GSK as a leader in ethical reforms since it was hit with a record $3bn DoJ fine for marketing abuses in 2012. But his clean-up effort, including measures to cut the link between sales volume and pay for marketing personnel, has been overshadowed by the latest scandal in China.
In China authorities have identified 46 individuals connected to the company they claim were involved in “massive and systemic bribery”.
In the UK the Serious Fraud Office (SFO) marked out its pitch this week, revealing it has opened an official investigation into allegations of bribery; and an internal GSK probe is looking at potential wrongdoing in Jordan and Lebanon.
Given the slew of allegations so far it seems a fair assumption that other international law enforcement agencies, notably the US Department of Justice, will be taking a long, close look at the allegations.
The GSK bribery bus has barely left the terminus.
The interest from international authorities flows almost directly from the extraterritorial reach of the UK Bribery Act and US Foreign and Corrupt Practices Act. The legislation allows prosecutors from the two jurisdictions to press charges as long as they can firstly prove wrongdoing and, secondly, show that the company, in this case GSK, has operations within its territory.
In the case of GSK none of these conditions should be difficult to meet. The company is headquartered in UK and has the bulk of its sales in the US.
On top of this, in a statement in July last year the company all but admitted to wrongdoing when it said “certain senior executives … appear to have acted outside of our processes and controls which breaches Chinese law”. At first glance this one shouldn’t be too difficult to prosecute.
But then you look again. Buried in the SFO’s Operational Handbook is a detailed explanation of double jeopardy and how it affects criminal investigation and prosecutions.
The guidance states: “The double jeopardy rule, that no person should be put in jeopardy of being convicted and punished for the same offence, is an established common law principle.”
It goes further, detailing that investigations carried out overseas have the power to invoke double jeopardy in the UK just as easily as those carried out domestically. “Double jeopardy is likely to arise whether there is, or has been, an investigation into the defendant’s conduct by another authority in England and Wales or overseas jurisdiction.”
As ever with the law there are exceptions to the principle. However they are limited in scope and rare in number. It may also be the case that the principle of double jeopardy may not be invoked in this case if the alleged offences the SFO is investigating are separate to those under investigation in China. They could relate to matters that took place in Jordan or Lebanon.
But that in itself raises concerns. If there is real cause for concern about those jurisdictions, won’t the local authorities want to investigate? If so, how will that impact the principle of double jeopardy?
These matters will really only be resolved, and quite properly so, through successful prosecutions, leading to decisions taken in court, establishing legal precedent. However, until that happens we are faced with worrying prospects.
The first is the potential for jurisdiction shopping. If a party facing investigation is confident that the principle of double jeopardy will be respected internationally there is little to stop that party cutting a deal with the country likely to offer them the most lenient treatment.
The second issue is the rather unedifying sight, witnessed previously in a number of investigations, of international prosecutors carving up parts of prosecutions so they can all have their pound of flesh. A very painful prospect for GSK.
The third, and potentially most worrying is the prospect of the US prosecutors getting involved. As set out in the SFO handbook, the UK has historically respected the principal of double jeopardy even in grey areas such as international fraud investigations. The US has not always been so amenable. Rumours of clashes between UK and US investigators working on high profile banking, fraud and corruption cases are now fairly commonplace among the white collar crime community.
If the US authorities get involved they are unlikely to look at any consideration other than a high profile settlement involving a very large cheque – just look how US prosecutors have treated the banking sector.
If that happens the jeopardy GSK is facing could be more than doubled.
• Jonathan Russell is a senior associate at due diligence and business intelligence company Alaco