BIG Pharma and improper sales and marketing behaviour related to pushing its drugs is not exactly rare. Along with the defence sector and the banks, the drugs sector is one of the industries that seems to attract allegations of dodgy behaviour too often to make it comfortable, whether eventually proven or not.
Mud sticks in the public mind. The latest major pharmaceuticals group in the firing line is GlaxoSmithKline, which is facing a criminal investigation in Poland for allegedly bribing doctors to push its asthma drug, Seretide.
GSK’s embarrassment is compounded by previous allegations of corrupt behaviour in China and Iraq. The Polish allegations were the subject of a BBC Panorama documentary Who’s Paying Your Doctor?, which aired last night.
If the new allegations are proven, GSK risks having contravened both the UK’s Bribery Act and the US Foreign Corrupt Practices Act.
For its part, the company has said its own internal investigation into the matter found that one employee had behaved inappropriately in promoting Seretide, had been reprimanded and disciplined, and that it was co-operating fully with Poland’s anti-corruption bureau.
Panorama said that 11 doctors and a GSK regional manager have been charged with alleged corruption between 2010 and 2012.
Without pre-judging any possible outcomes, it is hardly strange when such allegations surface given that Big Pharma and its international reps deal daily with thousands of doctors.
Rather damningly, a Reuters examination in 2012 of regulatory filings by the world’s biggest ten drugs companies found that eight had warned of potential costs related to charges of bribery in overseas markets.
Like the food chain in the supermarket sector, there is only so much that head office can do to ensure that all the vast tentacles of a global business operation is operating completely legally and ethically. Even so, it is little wonder that in GSK’s case its share price wobbled somewhat yesterday.
Against the big canvas of its operations, the Polish events are pretty insignificant. But the last thing that a major pharma player wants is a reputation for “previous” in this vexed area. Chinese authorities have accused GSK and its reps of giving a massive 3 billion yuan (£289 million) to doctors and officials to encourage them to use its medicines.
Last week, the company also admitted it was investigating allegations of bribery in Iraq. Above all, GSK, along with its peers, does not want an insidious creep of “no smoke without fire” developing in investor and public sentiment towards it.
In terms of overseas selling practices by GSK, one investigation is embarrassing, three invites serious concerns.
First China, Then Iraq...
UK drug company GSK ‘paid bribes to Polish doctors’
UK drug company GlaxoSmithKline is facing a criminal investigation in Poland for allegedly bribing doctors, BBC Panorama has discovered.
Eleven doctors and a GSK regional manager have been charged over alleged corruption between 2010 and 2012.
An former sales rep said doctors were paid to promote GSK’s asthma drug Seretide.
The company said one employee had been disciplined and it was co-operating with investigations.
If the allegations are proved, GSK may have violated both the UK Bribery Act and the US Foreign Corrupt Practices Act. It is illegal for companies based in either country to bribe government employees abroad.
A former sales rep for GSK in the Polish region of Lodz, Jarek Wisniewski, said: “There is a simple equation,” he said. “We pay doctors, they give us prescriptions. We don’t pay doctors, we don’t see prescriptions for our drugs.
“We cannot go to doctors and say to them, ‘I need 20 more prescriptions’. So we prepare an agreement for them to give a talk to patients, we pay £100, but we expect more than 100 prescriptions for this drug.
“It’s a bribe,” Mr Wisniewski said, confirming that although on paper the payments were for educational services, the doctors understood very clearly that they must produce a certain number of prescriptions in return.
Panorama: Find out more
- Panorama – Who’s Paying Your Doctor?
- BBC One, Monday, 14 April, at 20:30 BST
The Lodz public prosecutor found evidence in documents given to doctors by GSK to support claims of corrupt payments in more than a dozen different health centres where there was no evidence “patient education” had taken place.
Spokesman Krzysztof Kopania said: “We have evidence that in more than a dozen cases it was a camouflaged form of a bribe.
“In return for the financial gains the doctors would favour the product proposed by the pharmaceutical company and they prescribed that medicine.”
One doctor has already admitted guilt, been fined and given a suspended sentence. He said he accepted £100 for a single lecture he never gave, but only under pressure from a GSK drugs rep.
He told Panorama: “They kept tempting, and I am just a man.”
Reprimanded and disciplined
The company said a GSK training programme to help improve diagnostic standards and medical training in respiratory disease was run by doctors in Poland from 2010 to 2012.
A statement said: “These sessions were delivered by specialist healthcare professionals who, based on contracts signed with GSK, received payments appropriate to the scope of work as well as their level of knowledge and experience. The provision of sessions under this programme was agreed with the Polish healthcare centres.
“Following receipt of allegations regarding the conduct of the programme in the Lodz region, GSK has investigated the matter, using resources from both inside and outside the company. The investigation found evidence of inappropriate communication in contravention of GSK policy by a single employee. The employee concerned was reprimanded and disciplined as a result.
“We continue to investigate these matters and are co-operating fully with the CBA [Poland’s Central Anticorruption Office].”
In 2012, GSK paid $3bn (£1.9bn) in the largest healthcare fraud settlement in US history after pleading guilty to promoting two drugs for unapproved uses and failing to report safety data about a diabetes drug to the Food and Drug Administration.
Last December, the company announced it was making major changes to its incentive schemes after a damaging corruption scandal in China.
The Chinese Ministry of Public Security has claimed that between 2007 and 2010 GSK funnelled three billion Chinese yuan (£300m) through travel agencies.
It said it would end direct payments to doctors for promotional talks and stop setting individual targets for its sales reps as part of a wider effort to improve transparency.
Panorama: Who’s Paying Your Doctor?, BBC One, Monday, 14 April at 20:30 BST and then available in the UK on the BBC iPlayer.
GlaxoSmithKline Plc is facing a criminal investigation in Poland for allegedly bribing doctors to promote its asthma drug Seretide, BBC Panorama reported on Sunday.
The BBC reported that 11 doctors and a GSK regional manager have been charged over alleged corruption between 2010 and 2012.
“The investigation found evidence of inappropriate communication in contravention of GSK policy by a single employee. The employee concerned was reprimanded and disciplined as a result,” the drugmaker was quoted as saying.
GSK could not be reached immediately outside regular working hours.
According to the BBC, one doctor has admitted guilt and has been fined and given a suspended sentence.
GSK, Britain’s biggest drugmaker, was accused by Chinese authorities in July of funnelling up to 3 billion yuan to doctors and officials to encourage them to use its medicines in a case that rocked the pharmaceuticals industry.
Copyright: Thomson Reuters 2014
A GSK whistleblower claims that money put aside to teach patients in Poland about an asthma drug, Seretide, actually went towards paying doctors to prescribe more of the medicine.
Jarek Wisniewiski, who was with the company for eight years until 2012, worked on a marketing programme across the country in 2010 to push the asthma drug.
He told Panorama that although officially the money was to be spent on medical training, in reality it was used to bribe doctors to boost the company’s sales.
“I pay for education and in the same meeting I said that I need more prescriptions for Seretide. So… they knew exactly what I pay for,” he said. “We pay agreement for a speech; we pay £100 but we expect more than 100 prescriptions for this drug.”
Mr Wisniewiski says he told GSK that he was unhappy with the arrangement – an admission that he says resulted in him being sidelined at work and eventually sacked.
Another former employee, who did not want to be identified, confirmed that the company paid doctors for lectures that never happened but which would result in a greater number of prescriptions.
A criminal investigation has been launched, and 11 doctors and one GSK regional manager have been charged. The public prosecutor’s office in Lodz has examined the contracts that doctors were given by GSK, and says that it has found evidence to support claims of corrupt payments.
A spokesman said: “We have evidence to claim that in more than a dozen cases it was a camouflaged form of a bribe.In return for the financial gain, the doctors would favour the product proposed by the pharmaceutical company, and they prescribed that medicine.”
GSK sells some of the world’s best-known medicines and has an annual turnover of more than £26bn. However, allegations of bribery have hounded the company in recent months. The most recent claims come just a week after reports that GSK hired Iraqi government doctors and pharmacists to act as sales representatives for the Brentford-based company, to boost revenues for its medicines.
The company is also waiting to find out whether it will face prosecution in China following claims it paid £300m to doctors and government officials there.
The company’s Chinese sales plummeted by 61 per cent in the third quarter of last year, and 18 per cent in the final quarter, after its offices were raided by Chinese police and its staff arrested.
The allegations have not been established but if found to be true, GSK may have violated both the UK’s Bribery Act and the US Foreign Corrupt Practices Act. In both countries it is illegal for companies operating there to bribe government employees abroad.
In response to Panorama’s questions about the case, GSK confirmed that it had run a programme in Poland from 2010 to 2012 to help improve diagnostic standards and medical training for the benefit of patients with respiratory disease.
GSK says it is investigating the allegations. A chief executive has stated that the company has “zero tolerance” with respect to the issues raised in the allegations and is co-operating fully with investigators.