Back in September, our old compliance friend GlaxoSmithKline plc (GSK) settled with the Securities and Exchange Commission for violating various provisions of the Foreign Corrupt Practices Act, namely for improper payments, gifts, and other bribes made by GSK subsidiaries in China to Chinese officials to boost sales in that country. Back in 2013, GSK got itself into trouble for a wide-ranging bribery scheme in China, which included the involvement of top-level country managers down to individual sales personnel. The bribery schemes were numerous, including direct bribe payments to all healthcare personnel (HCPs) who could be influenced to prescribe the company’s pharmaceutical products, indirect payments to hospital administrators who could then dole out the money, excessive and over the top gifts, travel and entertainment, and very large payments for speaking events. According to the SEC, the corruption within GSK’s China unit was pervasive, with bribes actually written into the sales plan for the company.
For this, the SEC fined GSK $20 million and declined to prosecute, citing GSK’s cooperation with the Commission during its investigation and global remedial actions taken by GSK to eliminate payments to doctors, improve risk assessment, and improve third-party oversight. This declination might have made more sense with a different company. But this is GlaxoSmithKline here, and this was hardly the company’s first brush with the law, nor its most severe.
Corporate integrity agreement. In July 2012, GSK pled guilty and paid $3 billion to resolve fraud allegations and failure to report safety data and for false price-reporting practices in what the Justice Department at the time called the largest healthcare fraud settlement in U.S. history and the largest payment ever by a drug company for legal violations.
You would think that any company that has paid $3 billion in fines and penalties for fraudulent actions would take all steps possible not to engage in bribery and corruption. Indeed, as part of that settlement, GSK agreed to a Corporate Integrity Agreement (CIA) that applied not only to the specific pharmaceutical regulations that GSK violated but all of GSK’s compliance obligations, including the Foreign Corrupt Practices Act (FCPA).
In addition to requiring a full and complete compliance program, the CIA specified that the company would have a compliance committee, inclusive of the compliance officer and other members of senior management, whose job was to oversee full implementation of the CIA and all compliance functions at the company. These additional functions required deputy compliance officers for each commercial business unit, integrity champions within each business unit, management accountability, and certifications from each business unit. Training of GSK employees was also specified. Further, there was detail down to specifically state that all compliance obligations applied to “contractors, sub-contractors, agents, and other persons (including, but not limited to, third-party vendors).” So, while GSK may have separate FCPA liabilities to be investigated by the Justice Department; it may be more of an issue that the company could be in violation of its CIA.
“Transparency is what enables the public to understand why particular results are reached in particular cases and helps to reduce any incorrect perception that our enforcement decisions may be unreasoned or inconsistent.”
Leslie Caldwell, Assistant Attorney General
Chinese criminal conviction. But that is not all. In September 2014, barely two years after its historic DoJ settlement, GSK was convicted in a secret trial in a court in the Hunan province of China for bribery and corruption related to its Chinese business unit. The amount of the fine was approximately $490 million, roughly equal to the 3 billion Rmb that Chinese investigators alleged that GSK had paid in bribes. Five GSK senior executives from this China business unit were also convicted. Mark Reilly, the former head of GSK in China, was sentenced to prison for three years with a four-year suspension. He was deported and reportedly has left the company. Zhang Guowei, GSK China’s former human resources director, was sentenced to three years in prison with a three-year suspension. Liang Hong, GSK’s former China unit vice president and operations manager, was sentenced to two years in prison with a three-year suspension. Zhao Hongyan, GSK China’s former legal-affairs director, was sentenced to two years in prison with a two-year suspension. Finally, Huang Huang, the GSK China business-development manager, was sentenced to three years in prison with a four-year suspension.
There is even more. The New York Times recently ran a front-page story about GSK and China, focusing not so much on the bribery schemes or individuals, but on GSK’s inept response to whistleblowers’ allegations of bribery and corruption in the company’s Chinese business unit. “The Glaxo case was fueled by missed clues, poor communication, and a willful avoidance of the facts,” the Times wrote. “For more than a year the drug maker brushed aside repeated warnings from a whistleblower about systemic fraud and corruption in its China operations.”
It turned out that the company had received substantive information concerning the bribery schemes by way of e-mail, written in excellent English about the company’s operations in China. Yet the GSK response was to try “another common gambit in China: bribing officials” who were doing the investigating. The company “set up a special ‘crisis management’ team in China and began offering money and gifts to regulators.”
In the midst of this corruption investigation crisis, the company received a video of its country manager, Mark Reilly, having sex with a Chinese woman. An e-mail alleged that a Chinese company, seeking to corruptly gain business favors with Reilly and seek additional business with GSK China, provided the woman. GSK officials in London thought this sex tape video was the work of the same person who was the whistleblower for the corruption allegations against the company and set out to discover the identity of the corruption whistleblower, as well as the sex tape whistleblower. Rather amazingly, GSK’s internal investigation turned up no evidence of bribery in its Chinese business unit, in spite of the detailed information provided by the whistleblower for the corruption allegations. At some point the whistleblower for the corruption allegations provided the same information to Chinese authorities, and this led to arrests of GSK China personnel in late June and July 2013.
The DoJ’s declination order did not reference the Chinese trial, penalty, or investigation and seemed to sidestep GSK’s still-existing CIA for their prior violations and all of the facts developed in the Chinese governmental investigation of GSK. Assistant Attorney General Leslie Caldwell has consistently communicated that the Justice Department is committed to the international fight against corruption, often leading the way. The Department has been training prosecutors from other nations in the techniques of investigating corruption and enforcement of anti-bribery laws.
Moreover, with this increase in the international fight against bribery and corruption, it would seem appropriate that a company not be double penalized by paying a penalty for the same offenses in multiple countries. However, if the Justice Department were providing such credit to GSK, it would seem appropriate that such information be communicated to heighten the transparency around the entire process. From the outside, it does not appear that GSK met at least two of the four prongs required under the FCPA Pilot Program. GSK did not self-disclose the violations of its Chinese business unit and did not cooperate with the authorities. While there were certainly some remedial steps taken by the company in China, they have not been detailed in any manner.
Whatever the reason for the declination, it would have been much better if the Justice Department had been more transparent in their decision-making calculus. Indeed, in recent remarks at the George Washington University School of Law, Caldwell spoke about the importance of transparency in the process. She said, “Transparency is what enables the public to understand why particular results are reached in particular cases and helps to reduce any incorrect perception that our enforcement decisions may be unreasoned or inconsistent. Transparency also informs corporate actors and their advisers what conduct will result in what penalties and what sort of credit they can receive for self-disclosure and cooperation with an investigation.”
Just how GSK was able to get a complete pass from the Justice Department may well remain a mystery, and such mysteries do no one any good.
Lawsuit Alleges GSK’s Witty Lied to the Media – Part I
~ Bob Fiddaman
A 42 page complaint was filed on November 15, 2016, by Peter Humphrey and his wife, Yu Yingzeng, in relation to GSK’s nefarious activities in China which saw the pair incarcerated for around 2 years in Chinese slum-like conditions prison cells.
The complaint delves deep into the whole sordid affair and alleges bribery on a huge scale, more importantly, the complaint alleges that GSK hired the services of Humphrey and Yu in efforts to smokescreen the corruption in China, corruption, according to the complaint, that they had known about for many years. Furthermore, the 42 page document alleges that GSK’s CEO, Andrew Witty, lied to the media when he was asked about the corruption in China.
Humphrey and Yingzeng were the founders of ChinaWhys, a professional-services consultancy that specializes in discreet risk mitigation solutions, consulting and investigation services to corporate clients in matters of high sensitivity across Greater China and the Asia Pacific.
On April 15, 2013, Humphrey met with GSK’s Head of Chinese operations, Mark Reilly, April Zhao, GSK China legal counsel and Brian Cahill, also GSK legal counsel. It was at this meeting that Humphrey was told that GSK had been sent a series of emails from a whistleblower alleging widespread corruption – GSK told Humphrey that they believed they knew who the whistleblower was.
Vivian Shi had previously worked for GSK as a government affairs director, GSK had terminated her services with them in December 2012. According to the complaint GSK claimed that Shi had orchestrated a “smear campaign” against GSK involving a total of 23 emails that had been sent to Chinese officials throughout the country, a letter had also been sent to GSK’s ‘top management’ alleging widespread corruption in GSK’s pharmaceutical and vaccine business that had been approved by GSK China’s senior management.
These were allegations brought to Humphreys attention just months after GSK had been fined a record breaking $3 billion by the Department of Justice in America – the fine was handed down after a guilty plea by GSK who, after the settlement, entered into a five-year Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services. The agreement requires enhanced accountability, increased transparency and wide- ranging monitoring activities conducted by both internal and independent external reviewers.
One month after meeting with GSK officials Humphrey was told that GSK’s global CEO, Andrew Witty, had been made aware that GSK had been using a travel agent to channel kickback to customers and doctors throughout China. Days after Witty had been made aware, the whistleblower also sent a video to him and other senior management that showed GSK China’s Mark Reilly engaged in sexual activity – Reilly later claimed that the woman in the video was his “regular girlfriend”.
GSK officials told Humphrey that they had launched their own internal inquiry regarding the whistleblower allegation and that they were false. They told Humphrey, “There is nothing there”. This, according to the complaint, was a lie.
Humphrey and his wife offered to investigate the whistleblower allegations but GSK declined the offer, opting instead for Humphrey to investigate Vivian Shi, the woman they believed was the whistleblower.
Two months after Humphrey and Yu started their background search of Vivian Shi, GSK received another letter from the whistleblower alleging that GSK China continues to engage in systematic bribery of doctors, this email focused on GSK China’s botox business whereby the whistleblower claimed that…
GSK had a ‘pay to prescribe’ scheme that funneled money through a central source at Beijing Medical College whereby ‘lecture fee payments’ were made to doctors who could “…incentivize and reward doctors for prescribing Botox.”
At no point did GSK show either Humphrey or Yu this letter.
On June 12, 2013, the Wall Street Journal (WSJ) ran an article highlighting GSK China’s massive bribery network. In July of that year 4 senior GSK China executives were arrested and, according to Humphrey’s filed complaint, GSK CEO, Andrew Witty told the worlds media that “…it appears that certain senior executives in the Chinese business have acted outside of our processes and our controls to both defraud the company and Chinese healthcare system.” Witty also claimed that GSK’s Head office in London lacked knowledge of the whistleblower allegations and “had no sense of this issue.”
According to the complaint, this made no sense as since the previous month GSK did, indeed, “have a sense” of the issue since it announced its 4 month internal investigation into allegations of bribery and corruption in China and found “No evidence of corruption or bribery.”
The complaint states…
Witty argued, nonsensically, that the previous whistleblower allegations were “quite different” from the more recent charges, saying, “they are two completely different sets of issues, we fully investigated the first and, of course, this has now surfaced in the last couple of weeks.”
This was a lie, since “what surfaced” in the PSB investigation and raids of GSK offices in July was precisely the illegal activity that the whistleblower had documented and threatened to reveal in January.
The complaint was filed in The United States District Court for the Eastern District of Pennsylvania.
Humphrey and Yu are represented by Boies, Schiller & Flexner LLP
**Coming in Part 2**
– A full and comprehensive list of the allegations made by Peter Humphrey and Yu.
– GSK ask Humphrey to ‘overtly’ obstruct the Chinese government investigation.
– Evidence, including emails, to be destroyed as not to implicate any wrong-doing by the company. Bob Fiddaman Back stories. Glaxo – The Sex Tape Scandal
A truly fascinating read regarding the corruption in China, all committed by the hand of British based pharmaceutical giant, GlaxoSmithKline.
The New York Times (NYT) recently ran a superb article regarding GSK’s nefarious activities in China, activities that saw them plead guilty, a result of which saw them being handed down a $500 million dollar fine.
The article by David Barboza, although brilliant, is tantalizing, in as much that The Times claims to have in its possession emails and documents, none of which they have provided, at least in their entirety.
The China scandal is a story of greed, corruption, cover-ups, bribery and pay-offs, all combined with a sex scandal video and a company burying it’s head in the sand over its China practices – preferring instead to go after the person who blew the whistle on the whole sordid affair.
It’s a subject I covered many times on this blog (Links at the foot of this post) and one that seems to be rehashed with additions on a regular basis.
The Times article throws out some very interesting facts about the case that were previously kept under wraps – one such fact being that they (The Times) have evidence that “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.””
Glaxo buying a patient’s silence? Surely not?
There was me thinking they only did that in litigation, Paxil withdrawal (Over 3,000 patients ‘paid off’) – Paxil Birth defects (Over 800 patients ‘paid off’)
So, who was the patient in receipt of Glaxo’s $9,000, moreover, what did this patient have that GSK didn’t want others to see?
According to the NYT…
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.
In 2012 Glaxo plead guilty to a whole host of violations throughout America, the guilty plea resulted in a record breaking fine of $3 billion. At the time, Glaxo Chief, Andrew Witty, pledged, “We’re determined this is never going to happen again.”
Witty, who had been made aware of the unfolding stench in China shortly after the 2012 guilty plea in the US, is stepping down from his CEO position in April next year – It’s quite a legacy he has left behind, one which he took over from former Chief, JP Garnier who, in essence, oversaw the corruption in America and left Witty to suck up the fallout.
What an abhorrent company this is. Corruption, bribery (of officials and patients) and the manufacturer of prescription meds that have either killed people or disfigured them in such a way that they need to continue having surgery for the rest of their lives. Let’s not forget those that have suffered as a result of becoming addicted to GSK’s medications either.
The Times article also digs deeper into the involvement of Mark Reilly, who, at the time, was Head of GSK’s China operations. They claim…
An 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.”
That’s some perk to have! China Comfort Travel bring a whole new meaning to the word ‘comfort’.
Any jobs going whereby the employer offers a bonus of playing hide the salami?
I’m sure red-blooded males would have been first in-line for such a job working for a company complicit in fraudulent activities. Sadly, for those red-blooded males at least, Reilly was offered (and took) the perk – I wonder if he claimed for the 15 minutes of overtime too? (Assuming that Reilly could last that long in the sack)
When faced with over 17 months of emails from the whistleblower Glaxo decided to seek help, they did so by hiring a private investigator, Peter Humphrey and his wife, Yu Yingzeng.
Humphrey did some digging and, at the time, provided information to Glaxo that pointed to the possible whistleblower. Vivian Shi, was a 47-year-old executive handling government affairs in Glaxo’s Shanghai office, I say former because she was previously fired by GSK for their belief (Before Humphrey was hired) that she was behind the whistleblowing allegations. The ‘official’ line of her dismissal was that she had been falsifying travel expenses.
Humphrey, it appears, was merely suggesting that Shi may have been involved – he, at no time, ever provided GSK with any evidence that their former executive was the one who was whistleblowing. Shi, who remember had already left GSK, denied any part in the whole Chinagate scandal.
During his investigations Humphrey obtained information that was deemed to be by false means according to Chinese officials. Both he and his wife were later arrested, charged then sent to prison. Meantime, Reilly, who was the mastermind of the whole scam, was sent back home to the UK – No jail time. It’s unknown what Reilly is doing today, presumably he doesn’t work for GSK in any capacity, although I wouldn’t put it past them to re-hire him, just as they did with Vivian Shi, the very person they had fired because they thought she was the one blowing the whistle on its Chinese operations.
GSK must be a truly great company to work for, not only do they offer, by proxy, free blowjobs to heads of operations but they re-hire you after previously sacking you for, ahem, “falsifying travel expenses.”
The Timesarticle is a must read and once again highlights how GSK prefer to target people who bring the company’s misdemeanors to their attention rather than target the person carrying out the misdemeanors.
GSK Corporate motto claims, “We are dedicated to improving the quality of human life by enabling people to do more, feel better, live longer.” – I just never knew this included blowjobs via complicit bribery deals – the re-hiring after breaking rules – and buying patients silence.
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.
The U.K. pharmaceutical giant GlaxoSmithKline has resolved an outstanding FCPA matter for the conduct of its China subsidiary, GSK-China that settled an SEC investigation for a fine of $20 million, with no profit disgorgement—quite a favorable move for the company. Even more amazingly, the company received a declination from the Justice Department, even though it was under the equivalent of a Deferred Prosecution Agreement, called a Corporate Integrity Agreement, for the actions unrelated to its FCPA violations in marketing off-labeled marketed products.
Of course these resolutions did not stand alone as the company had been sanctioned by the Chinese government with a fine of approximately $490 million back in 2014 for the actions of GSK-China. Company employees were criminally convicted and non-Chinese senior executives of the China business unit, who were convicted were deported from China. GSK’s sales in China went in the tank and continue to suffer through this date.
Perhaps the U.S. authorities felt the company had suffered enough. However, in this age of increasing international enforcement, it may well be the SEC and Justice Department missed an opportunity to demonstrate how they would give credit for anti-corruption prosecutions, done by other governments, under local anti-corruption laws; such as was done by Chinese authorities with GSK-China. U.S. authorities could have not only cited to the successful use of domestic Chinese laws as an example in the international fight against bribery and corruption but also specifically stated that how the fine and penalty paid by GSK-China was considered in the calculation of the fine by U.S. regulators.
Such an approach would have emphasized the U.S. government’s favorable outlook for greater international sanctions against corruption, as well as shown companies that they would not be whip-sawed by regulators across the globe for the same conduct. It could have been one of the most public examples of how the U.S. government viewed the international fight against corruption.
“…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.
“…Then you’ve got actually, we do occasionally make mistakes. Things go wrong. We have inevitably of course, we go through all the processes with the regulators to get a drug to be as safe and effective as it can possibly be. But the reality is, every time a human takes a drug, it’s like a clinical trial. You don’t really know what’s going to happen. Everybody can react a different way…”
I’m sure most people would be familiar with the film ‘The Devils Advocate’ with Al Pacino and Keanu Reeves. In the movie, Reeves is groomed into his dark corporate role by the Machiavellian Pacino- his boss and mentor. Unfortunately for Reeves his deal with the devil turns out to be just that.
‘The Devils Advocate’ is of course, a work of fiction, however, if you read though the stories and scandals of GSK over the past decade you could be forgiven for thinking you were reading a work of fiction; such is the scale and depth of GSK’s nefarious and suspect activities.
From tax evasion, dodgy factories spewing out defective and contaminated products, to bribery, fraud, prostitutes in China (and that’s not just the doctors on the payroll), corruption, suppression of side effects of their meds – resulting in killing of consumers, Serious Fraud Office investigations, Department of Justice investigations, pay for delay deals, etc etc.
The list goes on… and on… and on….
GSK are as insidiously and (dare I say it)- as evil – as you would imagine any multi-billion dollar international corporation to be…
But scarily- for you (and for me, and for the public)- GSK are real, they are not fiction and they make your toothpaste such as sensodyne, and your kids drinks like Ribena and Lucozade, as well some some really dodgy drugs like Seroxat, Avandia, Imitrex and Pandemrix…
GSK is recalling dozens of lots–3,977,252 tubes–made up of different varieties of Biotene and Sensodyne toothpaste, from the U.S., Puerto Rico and Taiwan. According to the FDA‘s most recent Enforcement Report, “fragments of wood were found when the product was extruded onto a toothbrush.” The toothpaste was actually manufactured for GSK by Oratech, a Utah-based contractor.
“….The makers of two of Britain’s best-selling soft drinks, Lucozade and Irn-Bru, have been forced to warn parents that the drinks may cause hyperactivity. A newly introduced EU law compels both drinks to display a warning that they contain artificial colours linked to behavioural problems in young children..”
“…An influential study which claimed that an antidepressant drug was safe for children and adolescents failed to report the true numbers of young people who thought of killing themselves while on it, re-analysis of the trial has found
Study 329, into the effects of GlaxoSmithKline’s drug paroxetine on under-18s, was published in 2001 and later found to be flawed. In 2003, the UK drug regulator instructed doctors not to prescribe paroxetine – sold as Seroxat in the UK and Paxil in the US – to adolescents…”
“..The most likely explanation: the leadership of the division of the FDA responsible for drug regulation, the Center for Drug Evaluation and Research (CDER), is seeking to avoid accountability for its role in the Avandia tragedy. In 2005 and 2006, GSK secretly conducted an analysis of the cardiovascular safety of Avandia and concluded that the drug increased the risk of heart attacks and related events by about 30%. This observation had grave implications: two thirds of diabetics, the intended recipients of the drug, eventually die of cardiovascular complications. Initially, GSK withheld the internal analysis from the FDA, but in 2006, the company informed CDER of the findings. FDA statisticians confirmed the risks, but, incredibly, CDER and GSK agreed privately to conceal this hazard from patients and practitioners…”
So be very careful when you ingest a GSK product because GSK are notoriously known for not telling you the truth about the products they sell you…
And even if the GSK label says the side effects are blah, blah, blah… don’t rely on them to be honest in the PIL either.. they often omit a lot of the truth.. they are notorious for lying and deceiving, often adding side effects (for years later) to their products’ information leaflets- long after millions of people have ingested them…
It’s easy to say, GSK are greedy, sociopathic, evil and callous, and they are (because most multi-billion dollar corporations are- they have to be because capitalism encourages them to be). However, it’s also easy to forget that GSK are a corporation run by people making the decisions for the company.
So could we then apply the same characteristics of greedy, sociopathic, evil and callous to the people running GSK?
Perhaps, in some cases, justifiably we can..
Take for example (outgoing) GSK CEO Andrew Witty…
Before he was crowned CEO of GSK, Witty had worked in a number of roles in the company- many of them high level.
Witty once promoted the highly controversial Zyban (an anti-smoking drug)- (also known as Wellbutrin and promoted as an anti-depressant):
LONDON, UK — January 16, 2007
“Wellbutrin XR is an important new medicine for doctors and patients in Europe,” comments Andrew Witty, president, GSK Pharmaceuticals, Europe.
“Depression can be a crippling condition that is often difficult to treat.
With its unique mode of action, Wellbutrin XR offers a real alternative to the depressed patient.
We hope its profile will help patients stay on their therapy, which would address a significant unmet need in the area of antidepressants.”
“…It is even hard to say who is the leading candidate within the core pharmaceutical business. Is it Abbas Hussain, head of the division, or Patrick Vallance, head of research and development? And perhaps Emma Walmsley, boss of consumer healthcare, a bigger unit after being beefed via a shuffle of assets with Novartis, is a decent outside bet….”
So how much did JP Garnier and Andrew Witty know about GSK’s bad behavior over the years they spent crawling up the greasy ladder within the company?
I wonder what price you have to put on your soul to become CEO of a company like GSK?
“John Milton:..You sharpen the human appetite to the point where it can split atoms with its desire; you build egos the size of cathedrals; fiber-optically connect the world to every eager impulse; grease even the dullest dreams with these dollar-green, gold-plated fantasies, until every human becomes an aspiring emperor, becomes his own God… and where can you go from there? As we’re scrambling from one deal to the next, who’s got his eye on the planet? As the air thickens, the water sours, even bees’ honey takes on the metallic taste of radioactivity… and it just keeps coming, faster and faster. There’s no chance to think, to prepare; it’s buy futures, sell futures… when there is no future. We got a runaway train, boy. We got a billion Eddie Barzoons all jogging into the future. Every one of them is getting ready to fistfuck God’s ex-planet, lick their fingers clean, as they reach out toward their pristine, cybernetic keyboards to tote up their fucking billable hours. And then it hits home. You got to pay your own way”..
The London-based pharma exec runs the world’s leading over-the-counter pharma company—a $9.5 billion joint venture between GSK and its Swiss competitor Novartis, officially launched in March. Walmsley led the integration of the businesses, which resulted from a complex deal struck in April 2014. The company’s products are sold in 160 countries, with 42% of sales coming from emerging markets. In July, Walmsley, a lover of Italian red wine and Bikram yoga, was appointed to the board of Diageo. —Erika Fry
Regular readers of this blog, and followers of GSK news, would be aware of GSK’s Mark Reilly and his appalling role in GSK’s vast bribery network in China. Reilly got off with a suspended sentence, and was deported back to the UK. However, his behavior, was nothing short of sociopathic and criminal.
Considering Mark Reilly’s involvement in the biggest bribery scandal of recent times in China, and considering that he disgraced British business in general I found it quite disturbing to learn that GSK have kept him on as an employee…
His Linked in is still active also, and it seems he has been kept as a consultant or some such similar role perhaps…
“….GSK was ordered to pay the £297m fine – the largest the Chinese Government has ever handed out. It published an apology to “the Chinese government and the Chinese people” on its website, saying it had “reflected deeply and learned from its mistakes”.
GSK’s China boss, Mark Reilly was given a three-year suspended prison sentence with a four-year probation period. He is to be deported from the country, although the drug maker said he remained in the country as he waited to hear if he had to spend his probation period in China.
Mr Reilly and his Chinese girlfriend featured in a sex tape that was emailed to several senior executives of the drug maker last March. GSK then hired Peter Humphrey, a British investigator based in China, to look into the origin of the video. Mr Humphrey was jailed for two and a half years in August for illegally acquiring the personal information of citizens….’
Published: 23:38 GMT, 4 July 2014 | Updated: 23:57 GMT, 4 July 2014
At first sight, it looks like any other casual family portrait: a middle-aged man, with grey hair and a square jaw poses proudly next to his two grown-up daughters.
The fetching ‘selfie’ was uploaded to image-sharing website Instagram a fortnight ago by the girl standing at its centre, an 18-year-old student from Hertfordshire called Louise Reilly.
‘A bit late, but happy Father’s Day to my wonderful daddy,’ she wrote in the accompanying blurb. ‘I love and miss you every day.’
Daddy’s girls: Mark Reilly with daughters Louise (centre) and Jessica. Last summer he was cast into the epicentre of a scandal which would quickly and systematically destroy his picture-perfect existence
Louise took the picture at a cocktail party in December 2012, shortly after winning a place to study geography at Oxford University.
Her elder sister, Jessica, who is 21, and studies history at Cambridge University, is standing to her left. Yet, as the statement she chose to accompany it hints, an air of sadness now surrounds this seemingly happy photograph.
That’s because the middle-aged father so proudly showing off his high-achieving daughters is one Mark Reilly — a senior executive with British drugs giant GlaxoSmithKline (GSK).
Mr Reilly, 52, was until recently a high-flying businessman with the world at his feet. A glittering 25-year career at GSK had left him dividing time between the Far East — where he ran the £76 billion firm’s Chinese operations — and the exclusive commuter town of Sawbridgeworth in Hertfordshire, where he lived with his wife Jill in a £1.2 million Grade II-listed 17th-century house.
His daughters had been educated at Bishop’s Stortford College, a prestigious £25,000-a-year private school, where they excelled at sport, music, and drama, each achieving ten A* grades at GCSE, four A* grades at A-level and sailing into Oxbridge.
Last summer, however, Mr Reilly was cast into the epicentre of a scandal which would quickly and systematically destroy his picture-perfect existence.
It became public on June 27, when police in China organised a high-profile raid on GSK’s offices, amid claims that staff were illegally bribing doctors and healthcare officials to prescribe pharmaceutical products.
A few weeks afterwards, they called Mr Reilly in for questioning. He was promptly banned from leaving the country, and has since spent most of his time in various forms of detention.
Sadly, like anyone facing legal problems in autocratic China, Mr Reilly’s human rights have since been blithely disregarded by the authorities.
High-powered: Mark Reilly’s wife Jill, who also has a job at GSK. He faces 20 years inside a Chinese jail if found guilty
For months, he had only limited means to communicate with friends, family, and legal representatives, and was unable to see Louise, Jessica or Jill.
Then, in May, this already perilous situation took a turn for the worse. At a police press conference in Changsha, a 90-minute flight west of Shanghai, Mr Reilly was formally accused of presiding over a ‘massive bribery network’ in which doctors and health officials were illegally paid £320 million over several years.
In scenes reminiscent of a Soviet-era show trial, detectives aggressively dubbed him a criminal ‘Godfather’, who they claimed had greased palms with cash and free holidays, and arranged for associates to be given sexual favours from prostitutes.
They refused to take sceptical questions from assembled reporters, instead reading a pre-prepared statement recommending that this supposed ‘criminal’ be prosecuted on multiple counts of bribery and fraud.
The news conference deepened a scandal which had already knocked billions of pounds off shares in GSK, a leading FTSE-100 blue-chip firm held by many pension funds, and damaged Anglo-Chinese diplomatic relations in the process.
In the cold light of day, it also represented a serious affront to justice, compromising a universal principle of fairness: that Mr Reilly should be presumed innocent until proven guilty.
In China an astonishing 98 per cent of court proceedings end in conviction, and this father-of-two now faces the likelihood of a criminal trial.
‘This is a politically charged case, and China’s politicians control the judiciary.
‘So regardless of the facts, Mark Reilly will be found guilty,’ says Professor Willy Lam, a leading expert on China’s justice system. ‘The question of whether he actually committed a crime will not really be considered. The government will also dictate how long the judges will imprison him for.’
The British Consulate in China says it is following Mr Reilly’s case. Yet despite this, Professor Lam, a scholar at the Chinese University of Hong Kong, says that he will be effectively tried in secret.
‘There will be no jury. Just a judge and his assistants who decide the verdict.
‘There will be no media allowed in court, and no scrutiny of evidence. He may be allowed a few relatives and close colleagues present, and perhaps a UK diplomat. That is all.’
As to his eventual fate, Professor Lam adds: ‘Given the amount of money involved, this is a very serious case, and Mr Reilly could easily be sentenced to life. I expect him to get around 20 years.’
In any normal country, that would be bad enough. But this is China, home to one of the world’s most punitive penal systems.
Indeed, the vast Tilanqiao Prison in Shanghai, where Reilly is likely to end up if convicted, is known locally as the ‘city of death’.
Former inmates at the facility have told how guards carry cattle prods and force errant inmates to submerge their heads in buckets full of excrement and urine.
In the notorious ‘punishment wing’, beatings are rife. Human rights groups have published lengthy critiques of torture methods practised there.
So far, so ugly. But last weekend, this father-of-two’s plight became darker still.
In an extraordinary development, it emerged that China’s police investigation into GSK had been triggered by the circulation of a covertly recorded sex tape, in which Mr Reilly featured.
The video was secretly shot at the British businessman’s Shanghai apartment during 2012 and appeared to show him having extra-marital sex with a young Chinese woman.
It was emailed to a range of senior figures at the drug company last January, as part of what appeared to be a bid to threaten or blackmail them.
In a dramatic twist, I can reveal that the woman it depicted was a secretary who worked at a travel agency accused of helping GSK execute its ‘bribery’ scheme.
Family man: Mark Reilly with daughter Louise. One legal expert said that, regardless of the facts, Mr Reilly will be found guilty because it is a ‘politically charged’ case
Even without that tricky fact, the addition of a sex tape to an already snowballing corporate scandal was hugely embarrassing for GSK (which says it is ‘co-operating fully’ with the Chinese investigation), and deeply upsetting for Mr Reilly and his family.
Yet its existence also, surely, suggests that someone, somewhere, is going to very great — not to mention underhand — lengths to bring him and the company down.
Mr Reilly’s nearest and dearest certainly suspect so. Louise and Jessica are (on the advice of the Foreign Office) maintaining a dignified silence, for fear of further provoking the Chinese authorities.
So too are Mark’s mother, brother and sister. However, close friends tell me they are increasingly convinced that Mr Reilly is the hapless victim of an organised sting. ‘Mark has certainly made mistakes,’ says a source with intimate knowledge of the case.
‘He has made bad decisions in his personal life, particularly this sexual indiscretion, and done the odd thing he regrets in business.
‘But is he some sort of master criminal? Of course he isn’t. Does he deserve to spend 20 years in jail? Absolutely not. It’s a terrible stitch-up.’
The source said Reilly has been ‘in and out of detention’ for the past year, sometimes in formal custody, more often in hotels with police officers stationed outside his room.
He remains an employee of GSK, but is able to have only ‘very limited conversations’ with either the firm, his lawyers, or even his daughters, who in an effort to lighten their mood have taken to calling themselves ‘Team Reilly’.
Dedicated: Mr Reilly was a company ‘lifer’ who joined the firm in 1989, shortly after leaving university. He and Jill had previously worked in the U.S. and Singapore before he was offered his role in China
‘The family’s first and only priority is to secure Mark’s safe return,’ the source said.
‘But this is China we are dealing with, so things don’t look good. For a man who had so much, it’s very, very sad.’
Mr Reilly’s ill-fated Chinese adventure began in 2009, when he was offered a promotion to become general manager of GSK’s pharmaceuticals division there.
A company ‘lifer’ who joined the firm in 1989, shortly after leaving university, he and Jill (who also has a high-powered executive job at GSK) had previously worked in the U.S, where Louise was born, and Singapore.
With their then-teenage girls in secondary school, Reilly was reluctant once more to uproot his family, however. So he decided to move alone to Shanghai, where Jill and the children would join him in school holidays. On paper, the move represented a fantastic career opportunity.
Though GSK is one of the world’s largest drug companies, its footprint in China is relatively tiny. Indeed, although the country boasts more than 1.3 billion citizens, and is growing dramatically wealthier, it still represents just 3.5 per cent of the firm’s global sales.
Reilly duly set about dramatically increasing the firm’s revenues, setting ambitious sales targets for his mostly Chinese staff. But his eagerness to pursue those goals sparked friction with local authorities.
‘Like most companies in its field, Glaxo has a highly aggressive sales culture,’ says a Shanghai-based source with knowledge of the company’s operations.
‘Sometimes, that has got it in trouble with regulators.’
‘In China, it doesn’t work like that. Get caught, and you’ll go to prison’ – A Shanghai-based source
A few years ago, for example, the firm was ordered to pay a record $3 billion (£1.7 billion) fine in the U.S. after being caught illegally paying doctors to prescribe dangerous drugs. ‘Mark was steeped in this culture, where you push the rules to the limit in order to succeed.
‘Sometimes, you overstep the mark, and the company has to row back, apologise, or even pay a fine,’ adds the source.
‘In China, it doesn’t work like that. Get caught, and you’ll go to prison.’
Trouble began in 2012, when an anonymous whistleblower, thought to be a disgruntled GSK employee, began sending emails to China’s healthcare regulator, making wild allegations about sales practices.
A total of 23 messages were sent, alleging that GSK staff were routinely bribing doctors and healthcare professionals with the authorisation of senior managers. However they were short on details. In January last year, the stakes were raised, significantly.
An 11-page email was dispatched from the address ‘email@example.com’. In its subject line it claimed to contain a ‘notification of bribery by GSK in China’.
The email — a copy of which has been passed to the Daily Mail — alleged that the firm ‘has engaged in illegal marketing and large-scale bribery to sell its products to Chinese hospitals and doctors’.
It claimed, among other things, that sales staff were wired £1,000 each month from a Citibank account to wine, dine, buy prostitutes for, and pay cash bribes to ‘key decision-makers’ in the purchasing departments of hospitals.
The email named names and gave dates. It told how attempts were made to conceal payments, and accused the firm of doing little to prevent endemic bribery.
It would later end up in the hands of the police, who appeared to quote it (at times verbatim) in May this year, while outlining potential charges against not just Mr Reilly, but 45 of his Chinese colleagues.
‘Is what the email alleges true? I have no idea,’ says the Shanghai source. ‘Even if it is, Mark didn’t know every detail of what went on. He hardly spoke Chinese, for starters.
How could he have known? Shanghai is a very fast city. It’s easy to get caught up in the idea that everyone’s a bit dodgy and you have to do dodgy things to get along. If the allegations are true, I could see how it could have happened. But he’s no crook.’
Unfortunately, for Reilly, his case nonetheless struck a potent political chord. The Beijing government is attempting to crack down on a ‘backhander culture’ traditional in Chinese business circles, and GSK, as a wealthy multinational, makes an ideal target.
‘By coming down hard on someone like Reilly,’ says Prof Lam, ‘the authorities can show people that bribery is something they are taking seriously.’
If that was indeed their aim, they were handed a further gift in March last year, when a second email was sent, from the same address, to a separate group of senior staff.
This added details to corruption claims, claiming that doctors and their families were given free holidays in India, Brazil and Japan by GSK, under the guise of attending conference. Agencies were hired to organise luxury travel, and hand them thousands of dollars in cash as ‘speaking fees’, it said.
Attached to the email was large computer file. It contained the tape of Reilly and his mistress. The video was shown to Reilly soon afterwards, during a visit to GSK’s headquarters in London.
He promptly returned to Shanghai and hired a fellow British national, private investigator Peter Humphrey, to establish who had leaked it.
That investigation was still ongoing in late June last year when police carried out their high-profile raid on GSK’s offices. Mr Reilly promptly flew to the UK, on a scheduled holiday.
However several weeks later, he bizarrely decided to return to China to (as GSK put it) ‘help police with their inquiries’.
That move, which of course led to his detention, has until now been shrouded in mystery, since it seems inconceivable a right-thinking British citizen facing any prospect of prosecution in a country such as China should freely travel there.
However, I understand that Reilly was at least partly motivated to return in an ill-fated effort to suppress the sex tape.
‘At the time, you have to remember that Mark was a married man,’ says a close friend. ‘His wife did not know that he had committed any indiscretion.
A covert sex tape involving a senior executive and his Chinese lover was the trigger for a major investigation into corruption at British drugs giant GlaxoSmith-Kline, it was revealed yesterday. The video of married Mark Reilly and his girlfriend was filmed by secret camera and emailed anonymously to board members of the pharmaceutical firm. It led to an investigation that has rocked the £76billion company – which stands accused of bribing doctors and other health officials in China with £320million of gifts, including sexual favours from prostitutes, to persuade them to prescribe its drugs.
Mr Reilly, who ran the company’s Chinese business, was charged six weeks ago with running a ‘massive bribery network’ involving £90million of illegal sales and banned from leaving the country. It was the culmination of a year-long corruption investigation into the FTSE 100 firm. But yesterday, it was revealed the scandal first erupted after the sex tape was emailed by ‘GSK whistleblower’ to board members, including chief executive Andrew Witty, in March 2013, in what was believed to be a threat or blackmail attempt. The footage showed father-of-two Mr Reilly, who is separated from his wife, having sex with his Chinese girlfriend.
He was given permission to hire investigator Peter Humphrey, 58, to find out who had hidden the camera in his Shanghai flat and who had sent two separate emails making serious fraud allegations. The £20,000 probe, codenamed Project Scorpion, focused on disgruntled former employee Vivien Shi, 49, a prominent businesswoman whose family is part of Shanghai’s communist elite. But a few months after starting to investigate Miss Shi, Mr Humphrey was arrested along with his wife Yu Yingzeng, a US citizen and daughter of one of China’s most eminent atomic weapons scientists. According to the Sunday Times, Mr Humphrey’s arrest and detention in July was at around the same time that China began a police probe into GSK’s alleged bribery.
Mr Reilly, 52, of Sawbridgeworth, Hertfordshire, stepped down from his post as China manager soon after Mr Humphrey’s arrest but remains a GSK employee. He returned to Britain around the same time but voluntarily went back to China within days to assist police with their inquiries. He was charged in May this year and accused by police of presiding over a web of corruption and pressing his sales teams to bribe health officials to meet targets…
It feels odd reporting a story that seems like it belongs in a check-out line tabloid rather than a medical blog, but that’s where you end up if you follow the pharmaceutical industry. I reckon Reilly’s sex life is actually his business, but hundreds of millions in bribes is everybody’s business. And in this case, the charge is directed against an actual person:
If found guilty, Mr Reilly, who has a PhD in pharmacology and neurosciences from University College London, could face life in prison. Mr Reilly joined GSK in 1989 and has worked in Singapore, Hong Kong and China. He is separated from Jill, 49, with whom he has two teenage daughters, and has moved out of their £1.2million home. It is understood he met Mrs Reilly at university, where she was studying psychology. Like her husband, she took up a post at GSK, working as a director of capital planning…
Two things. First, it has long been the opinion of people watching the misbehavior of the pharmaceutical industry that until the executives in charge start heading off to jail, the corruption will continue under the cost of doing business rule. And so far, Reilly seems to be pretty vulnerable to Chinese justice and jail. Second, it’s inconceivable to me that payoffs of this magnitude could be made without being known all the way up the chain of command. These companies roll through money as if they’re small countries, but the numbers involved here are a good deal more than petty cash.
In with no echo…, I was hypothesizing that by settling out of civil and criminal suits, the pharmaceutical companies avoid any verdict, and invariably quickly say “we admit to no wrongdoing” implying that they settled for who-knows-what reason [like admitting to the least ignoble of the charges]. In doing that, they dampen the incriminating story which then fades quickly – the anechoic effect [see echo echoechoechoechoecho…]. The most obscene version was GSK settling a $3B suit and signing this agreement – then writing a response in a letter to the Chronicle of Higher Education that denies admission of guilt [see the only enduring contract…]. The way this China-gate story is going, it doesn’t at this point look like that’s going to be an option. This is just plain old crime, and one that has the Chinese up in arms [as it should].
And there’s more:
Last month, Britain’s Serious Fraud Office announced it is to investigate the company’s ‘commercial practices’.
Two scientists working at GlaxoSmithKline (GSK) in Pennsylvania, US, have been indicted for conspiracy to commit fraud and allegedly stealing confidential information related to its biopharmaceutical products. The indictment names five people, including scientists Yu Xue and Lucy Xi. If convicted of all charges, each defendant faces a range of punishments, including fines and possible prison terms.
The indictment claims that Xue and Xi used e-mail and USB drives to transmit information about GSK’s procedures for researching, developing, and manufacturing biopharmaceutical products designed to treat cancer or other diseases. Xue and two of the other defendants had formed a company in China called Renopharma in July 2012, allegedly to market and sell the stolen trade secret information.
“There have been warnings about paroxetine for a long time,” including a 2007 Food and Drug Administration advisory on the risk of increased suicidality when anti-depressants like paroxetine or imipramine are used to treat people age 18 to 24, according to Dr Jon Jureidini of the University of Adelaide in Australia. The authors of the 2001 study did not report this side effect, although the evidence was there, said Dr Jureidini, a co-author of the re-analysis.
“A broad community of people around the world have raised concerns,” he told Reuters news agency.
I’m going to open it to the floor in a second, because we do want to leave half the session for the audience to ask questions. I’ll just finish with kind of a general reflection, because it is interesting, and it’s nice when you talk about the drugs and what they cure, what the treatments are. Don’t you find it very interesting that the pharmaceutical industry has a bad reputation? We read about the China corruption, we read about profits, we read about profiteering. It is an industry that saves lives, no one can dispute that. It’s an industry that produces pills that are completely transforming for people’s welfare. Yet, it’s actually not a terribly popular industry. I just wonder if you can explain that paradox. Is it that you’ve done bad things and that’s been recognized, or is there somehow something the public don’t understand about the industry that makes them feel negative about it? Or am I wrong in thinking there’s a slight [indiscernible] around it?
No, clearly – first of all, I think we are, slightly alongside any big industry, or any big institution, there is a bit of that. We are big companies, we’re global. Again, like any big organization, you’re vulnerable to your weakest link in the organization. So if something goes wrong, particularly in today’s social media world – I often think about what it must have been like to run a global company in the 1970s, where you had to wait for the ship to arrive to find out what happened on the other side of the world. Today, the Wall Street Journal calls you before you’ve even heard about something inside your own company. So I do think there is a certain phenomena where – and you see that across many, you look at it in politics, you look at it in newspapers. The hacking stories, all things like that. So I think it’s a bit of that. I do think – let’s be honest, nobody wakes up in the morning hoping that they’re going to need a drug from GSK. You don’t wake up in the morning thinking, actually, if it’s a really good day, I might be diagnosed to be ill and I might need a drug. So we’re not aspirational in that sense. So you start by saying, actually, I’ve got some bad news, because I’ve been told I’m not very well. They then said: we might have some good news, because there’s something we can help you with. Then in some countries, I have to pay for it. Or in Britain, you might go to the doctor and they say: actually, I’d like to give you this, but NICE have said I can’t. So then there’s a whole series of reasonably negative concepts around pricing. So there’s a bit of that. Then you’ve got – actually, we do occasionally make mistakes. Things go wrong. We have inevitably – of course, we go through all the processes with the regulators to get a drug to be as safe and effective as it can possibly be. But the reality is, every time a human takes a drug, it’s like a clinical trial. You don’t really know what’s going to happen. Everybody can react a different way. So on the one hand, what is the story of the drug industry? The story of the drug industry is wonder drugs. On the other hand, it’s danger drugs. Those are the two extremes that we have. It’s kind of unavoidable.
But you’re saying there are bad apples, and it goes wrong. Is that right, or is it – for example, in the China case. Was it that there was a bad apple and it went wrong, or was it that that was normal behaviour in certain markets, and it just got called out in that particular case?
For obvious reasons, I’m not going to get into all the details of that.
Was that behaviour actually something, or was it just a slight extension of behaviour that is normal?
I think the bigger question is, where do you want to go forward?
No, but just answer that one.
There’s no doubt, if you ask the more general question – so there have been concerns over the years of, is the drug industry transparent enough? What’s the relationship of the drug industry with doctors? All of those are kind of concerns – let’s call them concerns or reasons for anxiety, whatever they are. Sometimes they’ve spiked up into real issues. What we’ve really tried to do, and we’re beginning to see some other companies, I think, following a similar direction, is we’ve said: you know what? We get that. We get that transparency is a cause of concern. People are worried that something is being hidden. We didn’t think there was but people – perception is everything, right? So what did we do? We came out and said: we will publish every single bit of clinical data we have in the company. We are the only company to do that at this point. Every single thing. If a researcher wants to know exactly what the data was on patient number – all anonymized, but on Patient 1002, in Clinical Trial 87, from 2002, we will give them that information. All the way through, we’ll do that. We’ve said we will stop all payments to physicians to speak on behalf of the company. It’s a perfectly legal practice, everything the company has done – but we stopped it all.
But this is a recognition – there is a lot you’ve done to present these things differently. But it is a recognition that it was pretty dysfunctional before, isn’t it? Because publishing data, to me, honestly, doesn’t seem like a great achievement. It just seems to me that that’s what you should be doing with data. Not bribing doctors seems like a thing you would do.
I wouldn’t say it’s bribing doctors – it’s perfectly legal to pay. If you went to a physician and said, would you expect to be paid for speaking on behalf of somebody, they will probably say yes. Actually, in most countries in the world, it’s perfectly legal. However, there are risks it can be abused. People can make mistakes. And there are risks that there is a misperception. Just to your point on publication, do you think academics are mandated to publish their data? Do you think universities publish all their failed studies? They don’t, but we do.
One box of chocolates for the first person to tell me how many times Witty deflects the questions put to him.
GSK were forced to be transparent, they didn’t just decide one day that they were going to be the first pharmaceutical company to “open it’s doors” (Halfway)
“Among other things, the CIA also requires GSK to implement and maintain transparency in its research practices and publication policies and to follow specified policies in its contracts with various health care payors.”
“Moving forward, GSK will be subject to stringent requirements under its corporate integrity agreement with HHS-OIG; this agreement is designed to increase accountability and transparency and prevent future fraud and abuse.”
I think the bigger question is why did Witty fail to mention that his company were forced to be more transparent.
I’ll leave the last words to Witty…
“It’s a perfectly legal practice, everything the company has done…”