The Creepy Corporate Capture Of Our Culture …


Check out Russell Brand’s brilliant interview with journalist and broadcaster Jacques Peretti. Jacques Peretti discusses the macro and micro influence of corporate power in our world. Unbelievable stuff, and a great conversation from the two guys.

This is fascinating and essential viewing.

Check it out –

Under The Skin #36 Beyond Conspiracy – The Terrifying Truth Of Corporate Power


“.. Essentially Government has become a kind of a civil service for corporations…”

-Jacques Peretti

“…..The U.K. government has announced that former GlaxoSmithKline chief Sir Andrew Witty is to head up its new pathway that aims to get a handful of drugs and medical technologies to patients quicker than ever before.

The plans for the so-called Accelerated Access Review (AAR) will see Sir Andrew, once on the other side of the fence trying to get new drugs onto the market, decide which set of medications and devices can get through to U.K. patients at a much speedier rate.

This also comes two months after he was hired by venture capital firm Hatteras Venture Partners; the firm tells me he will be staying on there, but did not answer questions about any potential conflicts of interest. …”

“….Patrick Vallance, president of research and development at the pharmaceutical giant GlaxoSmithKline, has been appointed as the Government’s chief scientific advisor.

The Government announced on Wednesday that Dr Vallance would take up the role in April next year….”



Who is serving who?

Barely out the door of the pharmaceutical mega-beast of GlaxoSmithKline, and former GSK CEO Andrew Witty was whisked straight into a prime governmental position in the UK. Interestingly, Witty’s new job will entail heading a UK government drug fast-tracking process which is convenient for him considering his old employers -GSK (which he likely holds shares in)- are looking to fast track a new drug at the moment, and will likely need to fast track more in the future.

Does Witty’s connection with GSK concern you? is this a conflict of interest which we should be worried about? Considering GSK’s unethical track record of harming patients, fraud and bribery- should Witty really be bestowed this position of influence in the UK?

Should Witty be in this governmental position?

Remember Witty joined Glaxo in 1985, and worked his way up the ladder there throughout most of his adult life, therefore it would be safe to assume that he has a loyalty to GSK wouldn’t it?

GSK are also currently under investigation with the SFO (Serious Fraud Office) in the UK and the result of that investigation is expected next year. However- chillingly- none of this seems to bother those in the higher echelons of the British state. On the contrary it seems that despite GSK being voted as the worst in the Institute of Director’s ranking for good governance a few weeks ago, and despite GSK consistently in the news for bribe, fraud -and sometimes even corporate manslaughter- scandals (such as with its Paxil/Seroxat drug), the top executives get rewarded regardless.

Imagine being rewarded by the State for working for one of the most despicable corporations on the planet?

How warped is that?

Alongside the bad appointment of Witty, former GSK Executive – Pat Vallance – was also appointed by the UK government into the position of their main scientific advisor. Again, I think we should ask the question :should we be concerned about Pat Vallance’s UK government appointment, particularly given GSK’s unethical track record? And furthermore, if Pat Vallance still holds shares in GSK, does his position create issues around conflicts of interest too?

The press need to start asking these questions, but I won’t hold my breath. The UK press do not confront GSK, if they do it’s rare and they barely scratch the surface most of the time.

For a litany of GSK crimes- which resulted in untold harm to patients and consumers- please read GSK whistle-blower Greg Thorpe’s Department of Justice complaint (see here) from 2012, and remember folks Greg’s complaint led to GSK paying a 3 billion dollar fine for fraud. They were then caught 2 years later operating one the biggest bribery networks ever exposed in China and were fined 500 million there.

This is the tip of the ice-berg folks..

The tip of the iceberg..





Recap from 2012: America The BattleField: Big Pharma Criminality and Fraud No Longer a Conspiracy Theory

Wednesday, July 11, 2012

Big Pharma Criminality and Fraud No Longer a Conspiracy Theory

This is for everyone who has been saying that I don’t know what I’m talking about and don’t have the facts regarding the healthcare, pharmaceutical, and vaccine industries. GlaxoSmithKline, one of the largest multinational pharmaceutical, biologics, and vaccine corporations in the world, has plead guilty to criminal fraud charges, and has been ordered to pay $3 billion in fines, the largest healthcare fraud settlement in U.S. history.
This is just one example of the decades-long conspiracy of criminal activity and deep collusion between government, big pharma, and the media. They have been lying, and the media has been supporting and covering for the illegal chemical and biological warfare of these drug companies.
Glaxo made $27.9 billion from the sale of Paxil, Wellbutrin, and Avandia. The fine was incurred due to hiding the dangers and inducing doctors to prescribe these drugs for off-label uses.
However, Glaxo had already set aside the $3 billion from their war chest of $27.9 billion, to pay the government fine. Glaxo said in a statement to the BBC that they will pay the fine out of existing cash resources. Some of the criminal charges GlaxoSmithKline plead guilty to:

  • Bribing doctors
  • Lying to the FDA
  • Fabricating drug safety data
  • Defrauding Medicare and Medicaid out of billions
  • Deceiving regulators about the effectiveness of its drugs
Among the many doctors bribed by GlaxoSmithKline was Dr. Drew Pinsky, who received $275,000.00 to promote Glaxo’s anti-depressant drug, Wellbutrin. Also, sales reps in the U.S. were encouraged to mis-sell Glaxo’s antidepressants. Where is the accountability?

“On behalf of (Glaxo), I want to express our regret and reiterate that we have learnt from the mistakes that were made. When necessary, we have removed employees who have engaged in misconduct.” – Andrew Witty, CEO of GlaxoSmithKline “What we’re learning is that money doesn’t deter corporate malfeasance.” – Eliot Spitzer, former attorney general of New York “It is simply no longer possible to believe much of the clinical research that is published, or to rely on the judgment of trusted physicians or authoritative medical guidelines. I take no pleasure in this conclusion, which I reached slowly and reluctantly over my two decades as an editor of The New England Journal of Medicine.” – Marcia Angell, MD Similarly,

Bayer was caught shipping out Factor VIII hemophilia blood products that were knowingly infected with HIV and hepatitis C, to patients all over the country for over a decade. It is estimated that the resulting deaths from just those blood products number in the hundreds of thousands.

Government regulators are themselves corrupted from within. For instance, the former director of the CDC from 2002 through 2009, Dr. Julie Gerberding, landed a very lucrative job as president of the $5 billion vaccine division at Merck, one of the largest drug companies in the world. She was very likely cultivating a relationship with Merck all those years. The pharmaceutical industry has a giant “revolving door” through which corporations and government agencies frequently exchange key employees. And the bought-and-paid-for state run media is standing by to propagandize the masses about how great it is. “If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.” – Joseph Goebbels, Reich Minister of Propaganda, Nazi Germany Relevant news articles:

300 years of Andrew Witty? What to buy with $3 billion

04 July 2012
John Hodgson

GlaxoSmithKline, part of what used to be called ‘the ethical pharmaceutical industry’ back in the days when Boy Scouts wore short pants, was docked a record $3 billion in state and federal fines and in liabilities in the US for misdemeanours violations concerning the marketing of antidepressants and its diabetes drug, Avandia (, 3 July 2012).

GSK’s stock price rise in London of 22 pence on the day was a collective investor sigh of relief that the dmage was as low as $3 billion. This was half the amount GSK had predicted (£4 billion – $6 billion).

But the company surely would have much rather determined itself how the money was spent.

So, on the day the Higgs boson first poked its mass-defining nosy signal above the parapet of subatomic noise, Scrip would like to take you on a trip to some alternative universes, universes in which an innocent (or undetected) GSK gets, Sinatra-like, to spend $3 billion its way.

What then, in the words of the Finance Director, is the opportunity cost of being naughty and getting caught?

Without the fine, for instance, GSK might have paid out an extra 60 cents a share in dividends to shareholders.

Or it could have spent the money on R&D, adding 50% again to its annual innovation budget.

Ot it could cornerstone a hundred regional venture capital funds around the globe (but probably still mainly in New England and California) and really stoke up early stage life science companies.

It could have bought more or its own shares. In 2011, GSK spent £2.2 billion ($3.45 billion) on auto-cannibalism, buying its own shares. It will probably make similarly narcissistic purchases in 2012. With a market capitalisation of around $110 billion, each $1 billion in stock repurchase by GSK increases its earnings-per-share by nearly 1% without the company having to do anything to change its business in any tangible way. A $3 billion bonus would have boosted GSK EPS 2.7%.

On the other hand, GSK could have made an irresistible offer for HGS, $5.6 billion rather the paltry $2.6 billion it currently has on the table now, gathering dust (scripintelligence, com, 11 June 2012).

[Mind you, with no other bidders in sight, no rumours of bidders from any investments banks, and no statistically significant evidence that icicles are forming in Hades, GSK probably doesn’t have to rush that one.]

It could have bought 60% of the BioMarin Pharmaceuticals rare disease business, for which GSK is rumoured to be offering $5 billion (, 13 June 2012).

Or the company could keep Andrew Witty on his 2011 salary for close to 300 years, although that seems an excessive period without a raise, even for a man who seems happy enough with a mere $10.6 million compensation, well below the 2011 Big Pharma average of $16.3 million (, 30 March 2012).

Alternatively, in order to flatten the GSK organisational structure still further, and to extend the R&D analogy of ‘shots on goal’ to management circles, $3 billion would buy the company ten years with an expanded management team of 30 CEOs with salary-linked egos. Then GSK really would run like a collection of biotechs.

Of course, there are lots of alternative universes outside GSK. Spent on a global initiative to tackle neglected tropical diseases, for instance, $3 billion might stretch further. At the launch of just such an initiative in January (, 31 January 2012) into which the Gates Foundation had committed $383 million, Andrew Witty, speaking for 13 pharma firms involved said: “Many companies and organisations have worked for decades to fight these horrific diseases. But no one company or organisation can do it alone.”

Hmmn, Andrew. Hate to be picky, but $3000 million probably might just cover it. Oh, no! Forgot! You don’t have it any more. Silly tropical diseases will just have stay neglected a bit longer.

$3 billion is a lot of money in India, too. There it buys three years worth of government-procured drugs (, 25 June 2012).

Part of case against GSK involved allegations that the company promoted paediatric use of its Paxil and Wellbutrin antidepressants despite studies that had failed to show efficacy. $3 billion worth of hindsight later, what is clear is that the company had rightly identified an unmet medical need but then addressed it in the wrong way.

Depressed juveniles? Yufaxil? Nothanksil! Get a Playstation 3 bundle from Amazon costing $299,99. Need extended release? Try the top of the range Microsoft Xbox 360 250 Gb consoles with Kinect at around $380.$3 billion gets around 10 million of them.

This is just the sort of imaginative social comparator that health technology agencies need to think about.

Or, if you want to keep any preventative solution within the care sector, GSK’s fine equals around 200 year’s running the UK suicide prevention charity, the Samaritans (at £10 million a year) or, by extrapolation, 2 years pro rata support for suicide prevention across the entire 7 billion human population.

But wait. There’s another way. A better way! Spend some of money (not all of it, obviously, just most) on better lawyers, smarter certainly than the ones who lost this case.

There’s a lot of billable hours in $3 billion!

GSK: Seroxat: Insight into how pharma manipulates research evidence: a case study

5 April 2012, 6.41am AEST
Insight into how pharma manipulates research evidence: a case study


Jon Jureidini
Professor of Psychiatry at University of Adelaide

Jon Jureidini receives funding from the ARC. He is affiliated with Healthy Skepticism.

The Conversation
The Conversation is an independent source of information, analysis and commentary from the university and research sector—written by acknowledged experts, curated by professional editors and delivered direct to the public. read more

2 February 2012
Time to go back to the drawing board on mental health reform
12 May 2011
You can work it out: shrinks aren’t always the best option

SKB knew eight adolescents self-harmed or reported emergent suicidal ideas compared to only one in the placebo group but hid this. Michael Valli
TRANSPARENCY AND MEDICINE – A series examining issues from ethics to the evidence in evidence-based medicine, the influence of medical journals to the role of Big Pharma in our present and future health.

Here Jon Jureidini explains what he encountered while examining internal documents as an expert witness in a case against a pharmaceutical company.

It’s well known that academic literature on medication in psychiatry is distorted by selective publication – failing to publish studies with negative results or selectively publishing only positive results from studies with mixed outcomes.

I had the unusual opportunity to see inside the process of how the marketing department of a pharmaceutical company controls and distorts information in the medical literature. This chance arose when I was provided with access to a huge number of internal documents because I acted as an expert witness for a US law firm.

Between 1993 and 1998, SmithKline Beecham (SKB, subsequently GlaxoSmithKline) provided $5 million to various academic institutions to fund research into paroxetine (also known as Aropax, Paxil (GSK) or Seroxat), led by Martin Keller. Keller was from Brown University and received $800,000 for participation in the project.

The results were published in 2001 by Keller et al. in the journal article, “Efficacy of paroxetine in the treatment of adolescent major depression: a randomized, controlled trial”, in the Journal of the American Academy of Child & Adolescent Psychiatry (JAACAP). The article concluded that “paroxetine is generally well tolerated and effective for major depression in adolescents”.

This was a serious misrepresentation of both the effectiveness and safety of the drug. In fact, when SKB set out their methodology for their proposed study protocol, they had specified two primary and six secondary outcome measures. All eight proved negative, that is, on none of those measures did children on paroxetine do better than those on placebo.

HmanJp/ Wikimedia Commons

The published article misrepresented one of the primary outcomes so that it appeared positive, and deleted all six pre-specified secondary outcomes, replacing them with more favourable measures.

SKB papers also revealed that at least eight adolescents in the paroxetine group had self-harmed or reported emergent suicidal ideas compared to only one in the placebo group. But these adverse events were not properly reported in the published paper. Instead, some were described as “emotional liability” while others were left out altogether.

Although published in Keller’s name, the article was ghostwritten by agents of SKB, and the company maintained tight control of the article’s content throughout its development.

GlaxoSmithKline’s internal documents, disclosed in litigation, show that company staff were aware that the study didn’t support the claim of efficacy but decided it would be “unacceptable commercially” to reveal that.

According to a company position paper, the data were selectively reported in Keller et al.’s article, in order to “effectively manage the dissemination of these data in order to minimise any potential negative commercial impact”.

Ano Lobb/Flickr

As it turns out, the Keller et al. article was used by GlaxoSmithKline to ward off potential damage to the profile of paroxetine and to promote off-label prescribing to children and adolescents.

While problems with the study and the Keller et al paper have been thoroughly exposed in legal actions, the bioethical and medical literature, a book, and a BBC Panorama documentary, the paper continues to be cited uncritically as evidence of the efficacy of paroxetine for treatment of adolescent depression.

Repeated attempts to get JAACAP to retract the offending paper have been unsuccessful.

For paroxetine, the concern is that adolescents are being harmed because well-intentioned physicians have been misled about its safety and effectiveness.

But more broadly, the case raises questions about how widespread such dubious practice is in the academic community, and in the editorial practices of “scientific” journals.

This is the ninth part of Transparency and Medicine. You can read the previous instalment by clicking the link below


GSK : Corporate Psychopath ?

“it’s your job to be willing to step across the line … to take action… to say…
… this is wrong…”

“the problem… the organizations themselves, the systems are sociopathic… you can’t expect them to have a conscience , you cant expect them to have a heart…”

” somebody at the very top of the organization is making obscene amounts of money… It becomes a situation where money and the desire for money becomes limitless…it’a primitive state of human desire and appetite…”

Lack of empathy..
Without a conscience….
Lack of concern for other people…
Ability to look at people as mere objects…

Does that sound like psychiatry or pharmaceutical companies to you?…

Scroll up to around 31 mins for the segment on anti-depressants…

Why (Some) Psychopaths Make Great CEOs

British journalist Jon Ronson immersed himself in the world of mental health diagnosis and criminal profiling to understand what makes some people psychopaths — dangerous predators who lack the behavioral controls and tender feelings the rest of us take for granted. Among the things he learned while researching his new book, “The Psychopath Test: A Journey Through the Madness Industry”: the incidence of psychopathy among CEOs is about 4 percent, four times what it is in the population at large. I spoke with him recently about what that means and its implications for the business world and wider society.

Are we really to understand that there’s some connection between what makes people psychopaths and what makes them CEO material?

At first I was really skeptical because it seemed like an easy thing to say, almost like a conspiracy theorist’s type of thing to say. I remember years and years ago a conspiracy theorist telling me the world was ruled by blood-drinking, baby-sacrificing lizards. These psychologists were essentially saying the same thing. Basically, when you get them talking, these people [ie. psychopaths] are different than human beings. They lack the things that make you human: empathy, remorse, loving kindness.

So at first I thought this might just be psychologists feeling full of themselves with their big ideological notions. But then I met Al Dunlap. [That would be “Chainsaw” Al Dunlap, former CEO of Sunbeam and notorious downsizer.] He effortlessly turns the psychopath checklist into “Who Moved My Cheese?” Many items on the checklist he redefines into a manual of how to do well in capitalism.

There was his reputation that he was a man who seemed to enjoy firing people, not to mention the stories from his first marriage — telling his first wife he wanted to know what human flesh tastes like, not going to his parents’ funerals. Then you realize that because of this dysfunctional capitalistic society we live in those things were positives. He was hailed and given high-powered jobs, and the more ruthlessly his administration behaved, the more his share price shot up.

So you can just go down the list of Fortune 500 CEOs and say, “psychopath, psychopath, psychopath…”

Well, no. Dunlap was an exceptional figure, wasn’t he? An extreme figure.

I think my book offers really good evidence that the way that capitalism is structured really is a physical manifestation of the brain anomaly known as psychopathy. However, I woudn’t say every Fortune 500 chief is a psychopath. That would turn me into an ideologue and I abhor ideologues.

Is it an either/or thing? It seems to me, thinking about it, that a lot of the traits on the checklist would be be useful in a corporate ladder-climbing situation. So maybe there are a lot of CEOs who simply have some psychopathic tendencies.

It is a spectrum, but there’s a cutoff point. If you’re going by the Hare checklist [the standard inventory used in law enforcement, devised by leading researcher Robert Hare], where the top score is 40, the average anxiety-ridden business failure like me — although the fact that my book just made the Times best sellers list makes it difficult to call myself that — would score a 4 or 5. Somebody you have to be wary of would be in early 20s and a really hard core damaged person, a really dangerous psychopath, would score around a 30. In law the cutoff is 29.

There are absolutes in psychopathy and the main absolute is a literal absence of empathy. It’s just not there. In higher-scoring psychopaths, what grows in the vacant field where that empathy should be is a joy in manipulating people, a lack of remorse, a lack of guilt. If you’ve got a little bit of empathy, you’re kind of not a psychopath.

GSK: Corporate manslaughter, fraud, corruption, defective drugs, damaging consumers, breeching ethics, intimidation of critics and general skullduggery… Why do they get away with it?

Perhaps it’s because they have an undue influence within the heart of the UK governmental system?…


Did Osborne tip off GlaxoSmithKline about his plans?

Less than 24 hours after George Osborne confirmed in the Budget that the Government would bring in new tax measures to encourage investment in research and development in the UK, the pharmaceuticals giant GlaxoSmithKline announced it would be building its first new manufacturing facility in the UK for almost 40 years and investing £500m to create 1,000 UK jobs.

Yesterday, Glaxo said its plans had been in the pipeline for some time and pointed out the tax changes had first been mooted back in 2009


But others pointed out that Glaxo’s CEO, Sir Andrew Witty, is in David Cameron’s Business Advisory Group – and has regular meetings with the Government. The move, they suggested, was very well choreographed with comments from Sir Andrew, Mr Cameron and Scottish Secretary Michael Moore all approved to go on Glaxo’s press release yesterday morning

GSK seeks to span digital divide with social/digital dragnet…


I wonder, would this new social media driven initiative on behalf of GSK have anything to do with staggering amount of web hits, key word searches and general popularity of blogs such as the “Seroxat Secrets” blog or Bob Fiddaman’s advocacy blog “Seroxat Sufferers” …

Seroxat Secrets just went over the half a million mark (500,000)..

That means it’s been majorly indexed by google web spiders and other web bots for search engines looking for keywords such as ‘Seroxat’ and ‘GSK’…

My own blog receives much of its direct traffic in this way..
It is difficult to counter act this kind of digital web trawling, particularly since blogs such as the ones mentioned, and my own, are firmly established and well connected..

We are webbed, inter-netted, multi-digitally connected, indexed and firmly rooted..

But I have a feeling, that contrary to what the article states.. GSK is doing this more for “web consumer monitoring’ and ‘damage control’ as opposed to authentic engagement with their consumers…

I could be proved wrong..

But I doubt it.. .

For GSK’s latest social media efforts..
See the link:

GlaxoSmithKline is souping up its social media monitoring with a digital strategy it says will create processes that are standard enough to streamline communications, but flexible enough to meet local requirements.

The company has hired digital agency Fabric Worldwide and IT and consulting firm Infosys to implement their Global Digital Platform. According to the partners, the strategy is one of agility: Infosys says the Global Digital Platform will “allow GSK to quickly build digital assets and listen to consumers across an array of digital platforms.” GSK noted that efficiency is part of the core business strategies the company identified in its 2011 annual report. Meanwhile, WPP techie shop Fabric Worldwide says the partnership will help GSK “consistently understand consumer signals from digital channels, across all brands and all markets.”

However, marketers say it is an attempt at something else: to break out of the industry’s traditional isolation.

“GSK’s decision of taking a more holistic, global, and strategic view of digital is extremely smart and, in my opinion, will yield them a terrific edge in the marketplace,” Fabio Gratton, founder and chief experience officer of Ignite Health told MM&M.

Jim Dayton, senior director of emerging media at the digital marketing agency Intouch Solutions, said he applauds GSK for having the “foresight to have integrated marketing systems that include social monitoring and engagement tools.”

The industry has struggled with balancing the desire to engage consumers without tripping over sketchily-defined regulatory boundaries, but companies can scarcely afford to shun social media altogether.

Gratton added that the move reinforces that digital isn’t about marketing, but about business as a whole, and that the GSK venture deserves credit, regardless of the results.

“Even if they fail, they will be failing forward sooner and faster than anyone else, and that itself is a competitive advantage,” he added.

Reuters : A Special Report: Prescription for Corruption

    See Link for the full reuters article on pharmaceutical corruption in developing countries.

Over the past year eight of the world’s top 10 drugmakers – Pfizer Inc, Novartis AG, Merck & Co Inc, Sanofi, AstraZeneca, GlaxoSmithKline Plc, Johnson & Johnson and Eli Lilly & Co – have all warned that they may face liabilities related to charges of corruption in numerous overseas markets.

Investigations into potential wrongdoing by pharmaceutical firms cover activities in countries including Argentina, Brazil, Canada, China, Germany, Italy, Poland, Russia and Saudi Arabia, according to company filings. They also involve possible improper conduct of clinical trials, which are increasingly being run in lower-cost Asian or East European countries.

Are GSK really as loyal to Britain as they would like us to believe?….

GlaxoSmithKline criticised over tax as job loss rumours surface
Feb 4 2009 By Lucy Proctor

Brentford-based drugs giant GlaxoSmithKline has been accused of denying UK tax coffers a fair proportion of its profits by listing lucrative brands in foreign countries.

GSK has been named in a Guardian newspaper investigation as an example of a UK-based company listing intellectual property – which generates profits on royalties and trademarks – in tax-friendly countries to get around the full force of the UK’s 28 per cent rate of corporation tax on UK profits.

The firm, which employs 18,000 people in Britain and has the Brentford base listed as its global headquarters, faces questions on why it uses branches of the company in countries like Puerto Rico – which have lower tax rates – to list its more profitable assets such as big brands of drugs.
Twickenham MP and Liberal Democrat shadow chancellor Vince Cable backed the newspapers’ campaign to shed light on the way big business protects profits from the UK tax system, writing: “Companies should pay the government of their host country for the infrastructure and other tax-financed services they receive: education, health, transport systems, policing.”
However, GSK is also listed in America where around 50 per cent of its operations are carried out and claims to only conduct around five per cent of its business in Britain.
A GSK spokesman said: “Given that we are a global company with over 100,000 workers employed all over the world in many different countries we feel it’s perfectly appropriate to list our intellectual property in different places.
“We feel it is the nature of global business and routine to do that.
“What I would whole-heartedly deny is that it is some kind of tax avoidance. We meet all the UK standards which are detailed in our annual report and I would emphasis that we do pay the corporate tax rates.”
He added that GSK also contributes taxes through employees’ PAYE.
It has been reported that the group would announce 6,000 to 10,000 job losses, but a Glaxo spokesperson refused to confirm or deny the rumours, only saying the company is implementing an ongoing restructuring programme and are due to announce their fourth-quarter results today.

GSK’s Alleged $1.9 Billion Tax Dodge Went Against Its Own Ethics Code
By Jim Edwards | May 22, 2009

If you thought GlaxoSmithKline was a British company with a British corporate headquarters whose American Depositary Receipts traded on the New York Stock Exchange, you’re wrong! Turns out GSK is a Swiss company, and its U.S. unit is just a device to dodge taxes, according to the WSJ.

The U.S. government has taken GSK to court, demanding $1.9 billion in taxes owed. It alleges that in the merger of Glaxo-Wellcome and SmithKline Beecham, Glaxo became the U.S. unit of a Swiss-based parent. The newly merged U.S. GlaxoSmithKline then paid tax deductible compensation payments to its Swiss parent, thus reducing its tax bill.

The IRS — unsurprisingly — doesn’t quite understand how paying money to yourself makes it non-taxable. This battle comes after GSK lost a 2006 tax war and ended up paying $3.4 billion in unpaid taxes.

Andrew Witty, chief executive of GlaxoSmithKline, rejects the idea of being a company that ‘floats around in Bermuda’. Photograph: Linda Nylind for the Guardian
The head of Britain’s biggest drugs manufacturer, GlaxoSmithKline, has delivered a stinging attack on companies that shift their headquarters abroad in search of lower taxes, declaring that it is “completely wrong” for businesses to view themselves as “mid-Atlantic floating entities” with no connection to society.

Speaking before the budget, in which George Osborne will be under pressure to create a growth agenda for business, GSK’s chief executive, Andrew Witty, said that banks, hedge funds and industrial companies that look only for lower tax regimes are contributing to a damaging destruction of trust between the public and the corporate world.

“One of the reasons why we’ve seen an erosion of trust broadly in big companies is they’ve allowed themselves to be seen as being detached from society and they will float in and out of societies according to what the tax regime is,” said Witty. “I think that’s completely wrong.”

GSK, based in Brentford, west London, employs 16,000 people in Britain out of a global workforce of 98,000. The company produces treatments for asthma, cancer and HIV, as well as brands including Horlicks, Aquafresh, Lucozade and Ribena.

In an interview with the Observer, Witty said: “While the chief executive of the company could move, maybe the top 20 directors could move, what about the 16,000 people who work for us? It’s completely wrong, I think, to play fast and loose with your connections with society in that way.”

HSBC, Diageo, Unilever and Reckitt Benckiser have all mooted the possibility of leaving Britain in search of lower rates of tax.

Witty scorned the possibility of being a company that “floats around in Bermuda”, saying that businesses should stick with their home country through bad times as well as good. “We could go, in theory, anywhere for a low tax rate. But first of all, how do you know that country isn’t going to change its tax rate in 10 minutes?

“Secondly, isn’t it better to be in a country and say: ‘Let’s try to work through the difficult times and get to the good times?'”

GSK paid £1.3bn of tax on profits of £4.5bn last year, although virtually all of this was levied on its operations overseas. The previous year, it paid £417m in corporation tax.

GlaxoSmithKline In The Dock Again!…

Old Corporate Bad Habits Die Hard …

Former Glaxo Lawyer Goes To Trial In February
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By Ed Silverman // December 2nd, 2010 // 8:23 am

Lauren Stevens, the former GlaxoSmithKline attorney, appeared in federal court yesterday and pleaded not guilty to a bunch of charges that generated enormous publicity last month. That’s because her indictment marked a rare moment when the federal government decided to hold a relatively high-ranking pharma employee accountable for an alleged off-label marketing infraction. She now faces an estimated three-week trial beginning on Feb. 1 (see this).
Specifically, Stevens was charged with one count of obstructing an official proceeding, one count of concealing and falsifying documents to influence a federal agency, and five counts of making false statements to the FDA (read the indictment). The indictment states that in October 2002, the FDA asked for info about promotion of Wellbutrin XR, as part of an inquiry into off-label marketing (back story here).
The trial, which will be held in US District Court in Maryland, should be fascinating. You may recall that her attorney, Brien O’Connor of Ropes & Gray, declared last month that “everything she did in this case was consistent with ethical lawyering and the advice provided her by a nationally prominent law firm retained by her employer specifically because of its experience in working with FDA.”
What might this mean? The trial may offer up the spectacle of a former Glaxo attorney – who is now officially retired, by the way – pointing fingers at one or more attorneys who billed Glaxo and, most likely, other large drugmakers on a regular basis. And perhaps Stevens and O’Connor will also look to pin some blame on other Glaxo personnel in the general counsel’s office and elsewhere. But imagine a courtroom filled with pharma lawyers also shouting ‘J’accuse!’ at one another for three weeks? This has the makings of high drama, yes?