What Will Become Of The UK’s Serious Fraud Office Investigation Into GlaxoSmithKline?…

“…In March 2017, the SFO director David Green has stated that he would like to resolve the GSK investigation by the time he leaves the SFO in April 2018…”


Back in 2014, after GSK were fined almost half a billion pounds for bribery in China, the UK’s serious fraud office began an investigation into the company. Ever since GSK’s department of justice fine (of 3 Billion) in 2012 for fraud, the company has been under scrutiny for fraud in several other jurisdictions (the UK investigation is just one of several allegations across several countries).

GSK are never held to account in the UK, despite being a UK company. The closest they came to it was- briefly during- the former CEO, Andrew Witty’s interview with the BBC’s Evan Davis; but even Davis, it seems, couldn’t really rattle the cage of the GSK Goliath.

GSK are the UK’s pharma cash cow, they are worth tens of billions. There are elite British business interests at stake here (and very powerful people involved), therefore I would be very surprised, if we will see any prosecution (or serious charges against executives) in the UK, as an outcome of the SFO investigation. The rich and the powerful operate above the law in the UK (and elsewhere), that much is clear.

Nonetheless it’s interesting to document the sheer scale of fraud allegations leveled against the company the last few years. It’s staggering how they get away with it, but we have come to expect that kind of thing when it comes to GSK.


This- from Trace-Compendium-gives a good outline of what’s happening…


Pharmaceuticals /Medical Devices /Health

London, Brentford, United Kingdom


Nationality of Foreign Officials: China
Summary of Allegations:

Between 2010 to June 2013, employees and agents of GlaxoSmithKline (China) Investment Co Ltd (“GSKCI”), wholly-owned indirect subsidiary of GlaxoSmithKline plc (“GSK”), and Sino-American Tianjin Smith Kline & French Laboratories Ltd (“TSKF”), joint venture between GSK, Tianjin Zhong Xin Pharmaceutical Group Corporation Ltd and Tianjin Pharmaceutical Group Co Ltd., allegedly provided bribes to Chinese public officials in order to increase sales of its pharmaceutical products. As part of the bribery scheme, bribes were allegedly paid to influence individual Chinese healthcare professionals writing prescriptions and hospital administrative staff responsible for product selection or purchase. The bribes were allegedly in forms of gifts, improper travel and entertainment with no or little educational purpose, shopping excursions, family and home visits and cash payments.

GSKCI allegedly utilized several methods to fund these improper payments to healthcare professionals. During the relevant period, GSKCI allegedly spent nearly RMB 1.4 billion (USD 225 million) on planning and travel services provided through third party vendors.

Also, GSKCI allegedly provided approximately RMB 14 million (USD 2.2 million), out of RMB 106 million (USD 17 million) in total spent as speaker fees, to speakers whose qualification as healthcare professional could not be verified. In addition, GSKCI allegedly used marketing programs to provide healthcare professionals with gifts such as laptops, tablets, and other electronic programs. Although the marketing program was purportedly for the purpose of providing clinics with tools to facilitate the storage and administration of vaccines that required refrigeration, the clinics were allegedly selected based on the potential to market additional GSK products. GSKCI allegedly paid out RMB 14.6 million (approximately USD 2.3 million) over the life span of the project.

GSK regional and district managers were allegedly aware of such improper practices.

For example, a sales representative allegedly submitted a 2013 work plan to sales manager describing intent to pay and provide holiday gifts to a healthcare provider in exchange for guaranteed monthly prescription of more than 40 boxes of GSK product.
These payments were allegedly recorded in GSK’s books and records as legitimate expenses, such as medical association sponsorship, employee expenses, conferences, speaker fees, and marketing costs.

Approximate Alleged Payments to Foreign Officials: Unspecified amount of bribes in forms of gifts, improper travel and entertainment with no or little educational purpose, shopping excursions, family and home visits and cash payments. Business Advantage Allegedly Obtained: Increased sales in China through increased prescriptions of GSK pharmaceutical products

Nationality of Foreign Officials: Iraq
Summary of Allegations:

On 6 April 2014, a person familiar with GSK’s Mideast operations emailed the company saying, “I believe GSK practices in Iraq violate the FCPA and the U.K. Bribery Act.”

According to the Wall Street Journal, the person said that GSK hired 16 government-employed physicians and pharmacists in Iraq as paid sales representatives for the company while they continued to work for the government.

A government-employed Iraqi emergency room physician allegedly prescribed GSK products, even when they weren’t in the hospital’s pharmacy and a competitor’s brand was in stock. The e-mail went on to say that GSK hired government-employed Iraqi doctors as medical representatives and paid their expenses to attend international conferences. GSK also allegedly paid other doctors high fees to give lectures in exchange for promoting and prescribing its drugs.

After GSK won a contract with the Iraqi Ministry of Health in 2012 to supply the company’s Rotarix vaccine,

GSK paid for a workshop in Lebanon for Iraqi Ministry of Health officials, the email alleged. That included paying for a doctor’s family to travel to Lebanon “so it would be a family vacation for him at the hotel.” Approximate Alleged Payments to Foreign Officials: Employment, travel and fees to government-employed physicians Business Advantage Allegedly Obtained: Promotion and prescription of GSK pharmaceutical products

Nationality of Foreign Officials: Jordan

Summary of Allegations:

According to e-mails first sent to the company in December, GSK sales representatives allegedly bribed doctors in Jordan to prescribe GSK drugs by issuing free samples that the doctors were then allowed to sell. GSK representatives also allegedly permitted Jordanian doctors to bring their spouses on business trips that GSK paid
for, according to the emails.

According to the e-mails, doctors were issued with business-class tickets to attend conferences but would
exchange them at travel agencies for two economy-class tickets, allowing their spouses or other family members
to come along for free, a practice local GSK employees were aware of.

It is against  GSK policy to allow airplane tickets to be exchanged for tickets of a lower value or refunded. The emails alleged that GSK sales representatives gave doctors in Jordan up to 60 free samples of its vaccine Synflorix, which they then sold on at up to USD 70 a vial.

Approximate Alleged Payments to Foreign Officials: Free samples, tickets for spouses/family members to travel with healthcare professionals Business Advantage Allegedly Obtained: Unspecified

Nationality of Foreign Officials: Lebanon

Summary of Allegations:

In Lebanon, GSK employees allegedly gave doctors free Synflorix vials as part of an incentive scheme to get them to prescribe the vaccine and not its competitors, according to a whistleblower e-mail to company representatives. GSK allegedly made payments to “key opinion-leader” doctors?influential and leading practitioners in their field?for lectures and other speaking engagements that may not have taken place, the emails allege, in return for them prescribing more drugs produced by GSK. Approximate Alleged Payments to Foreign Officials: Free vials of a GSK vaccine Business Advantage Allegedly Obtained: Prescriptions of the GSK vaccine Nationality of Foreign Officials:


Summary of Allegations:

GSK is facing criminal investigation in Poland for allegedly bribing doctors to promote its lung drug Seretide. GSK said the allegations related to the way a respiratory disease program was conducted in the Lodz region. The 2010-12 program centered on GSK’s top drug Seretide, also known as Advair, which has worldwide sales of around USD 8 billion a year.

According to the BBC, one doctor has admitted guilt and has been fined and given a suspended sentence, after accepting 100 pounds (USD 170) for a lecture he never gave. The bribes allegedly involved 11 doctors and a GSK regional manager.

GSK said an internal investigation into the matter found evidence of inappropriate behavior by just one employee, whom it disciplined in 2011.

Approximate Alleged Payments to Foreign Officials: Unspecified
Business Advantage Allegedly Obtained: Sales of a GSK pharmaceutical product


Nationality of Foreign Officials: Romania

Summary of Allegations:


On 27 July 2015, a whistleblower sent a letter to company management alleging improper payments in Romania. GSK allegedly made improper payments of hundreds or thousands of euros to Romanian doctors to prescribe GSK’s products, including treatments for Parkinson’s and prostate issues. The improper payments allegedly consisted of payments for speaking engagements where the doctor did not actually speak, or spoke less times than the number of engagements paid for. Other alleged improper payments include payments for “participating” in advisory boards and for doctors to take international trips. Approximate Alleged Payments to Foreign Officials: Payments for speaking engagements, travel and participation in advisory boards
Business Advantage Allegedly Obtained: Prescriptions of GSK pharmaceitucal products

Nationality of Foreign Officials: Syrian Arab Republic

Summary of Allegations:

GSK announced it would be investigating a whistleblower report it received on 18 July 2014 addressed to Chief Executive Andrew Witty and Judy Lewent, chair of GSK’s audit committee. According to the e-mail, GSK employees paid incentives to doctors, dentists, pharmacists and government officials to win tenders and to
obtain improper business advantages. “GSK has been engaging in multiple corrupt and illegal practices in Syria and its internal controls for its Syrian operation are virtually non-existent,” the email said. In addition, the email said GSK had engaged in apparent Syrian export control violations, including an alleged smuggling scheme to ship the drug component pseudoephedrine to Iran from Syria via Iraq. Pseudoephedrine is
regulated as a precursor for making methamphetamine.

The whistleblower’s email alleged that GSK used its own employees and Syrian distributor Maatouk Group to make illicit payments. The email listed a range of alleged improper activities, including payments of USD 1,500 each to two doctors to promote Panadol. The document also highlighted bribes paid to pharmacists and payments for medics to visit a Mediterranean holiday resort.

Approximate Alleged Payments to Foreign Officials: Unspecified

Business Advantage Allegedly Obtained: Unspecified


Nationality of Foreign Officials: United Arab Emirates
Summary of Allegations:

On 7 October 2014, GSK began an investigation into allegations of corrupt payments in the United Arab Emirates following a whistleblower complaint. The company confirmed the investigation following the receipt of an email alleging improper payments, which was purportedly from a GSK sales manager in the United Arab Emirates.

Approximate Alleged Payments to Foreign Officials: Unspecified
Business Advantage Allegedly Obtained: Unspecified


Agencies: China: Ministry of Public Security
Results: Civil Penalty
Year Resolved: 2014
Compliance Monitor: N/A
Ongoing: No


On 22 July 2013, following a meeting with Chinese authorities, Abbas Hussain, GSK’s President International, Europe, Japan, Emerging Markets & Asia Pacific, said, “Certain senior executives of GSK China who know our systems well, appear to have acted outside of our processes and controls which breaches Chinese law. We have zero tolerance for any behaviour of this nature. I want to make it very clear that we share the desire of the Chinese authorities to root out corruption wherever it exists. We will continue to work together with the MPS and we will take allnecessary actions required as this investigation progresses. . . .”

On 3 September 2013, Reuters reported that a Chinese police investigation claims the alleged bribery was coordinated by GSK, and not the work of a few individual employees. It reports that GSK implemented salary policies based on sales volumes and goals that could not be accomplished without “dubious corporate behavior.”

On 19 September 2014, GSK agreed to pay an unprecedented USD 491.5 million to Chinese authorities after the company’s Chinese subsidiary was found guilty of bribery. The ruling followed a one-day trial in Changsha, Hunan, and the penalty marks the largest corporate fine ever imposed in China. GSK published an apology in Chinese to the Chinese government and its people on its website. And previously, in 2013, a confession by GSK’s Vice President of China operations was broadcast on television.

Agencies: China: Ministry of Public Security
Results: Conviction, Prosecution of Individuals
Year Resolved: 2014
Compliance Monitor: N/A
Ongoing: No

In China, four GSK executives have been detained pursuant to the Ministry of Public Security’s investigation of potential economic crimes. According to a Bloomberg News report from 15 July 2013, the executives are:
Huang Hong (a GSK business development manager), Liang Hong (GSK’s vice president and operations manager in China), Zhang Guowei (a GSK human resources director), and Zhao Hongyan (a GSK legal affairs director). According to the same story, all four executives are Chinese nationals. Bloomberg News also reported that the head of GSK in China, Mark Reilly, “returned to the U.K. on a routine, planned business trip and has
been working from company headquarters on the response to the investigation.”
On 16 July 2013, the Telegraph cited a statement from the Ministry of Public Security as saying that “[a]fter initial questioning the suspects have admitted to the crimes, and the investigation is ongoing.” The Telegraph also reported that the vice president of operations in China, Liang Hong, who is one of the four detained executives, confessed to the crimes on a news broadcast on 15 July 2013.

The Guardian reported on 26 July 2013 that an additional group of eighteen or more GSK employees have been detained by the police in Zhengzhou. Additional details were unavailable. On 14 May 2014, Chinese prosecutors filed criminal charges against Mark Reilly. Reilly allegedly ordered his sales teams to bribe doctors and hospitals to achieve the company’s sales targets, according to police in Changsha, Hunan province. Two other GSK executives, allegedly helped execute the bribery scheme, which netted the company revenue worth billions of yuan. GSKs drugs in China cost more than those in other countries because the company allegedly inflated drug prices to recoup bribery funds, according to Chinese police. Reilly was sentenced to three years in prison after allegedly ordering his sales teams to bribe doctors and hospitals to achieve the company’s sales targets. Reilly received a three-year prison sentence that was suspended for four years; he will be expelled from China following the four-year suspended sentence.

Agencies: Internal Investigation
Year Resolved:
Compliance Monitor:
Ongoing: Yes

The Wall Street Journal reported on 7 July 2013 that GSK had begun investigating “allegations that sales personnel in China rewarded doctors with cash and perks for prescribing Botox, and allegedly tried to cover
their tracks by using private email, as part of a broader probe into allegations of bribery that date back several years.” According to the article, an anonymous tipster presented GSK with allegations that between 2004 and
2010 its China sales staff provided doctors with speaking fees, cash payments, dinners and all-expenses-paid trips in return for prescribing the drug company’s products.

On 15 July 2013, GSK released a statement indicating the GSK is reviewing all third party agency relationships and have put an immediate stop on the use of travel agencies that have been identified so far in the Chinese allegations/investigation. GSK is conducting a thorough review of all historic transactions related to travel agency use and intending to conduct a rigorous review of the company’s compliance procedures in China.

In April 2014, the Wall Street Journal reported that GSK terminated employees in China following increased monitoring of employees amidst bribery probes, but it is not known how many employees have been let go.

GSK previously said that it employed about 7,000 people in China. GSK confirmed that it fired staff in China for bribing officials in 2001 in a case that predates the wider allegations of corruption. About 30 staff in GSK’s vaccines business were dismissed for bribing Chinese officials after they were found to be involved in bribing Chinese officials and taking kickbacks, according to Reuters.

In addition, GSK is conducting an internal investigation into the alleged bribery in Poland, the United Arab
Emirates, Lebanon, Jordan, Syria, Iraq and Romania.

Agencies: Poland: Central Anticorruption Bureau
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Poland’s Central Anti-Corruption Bureau (“CAB”) opened a criminal investigation into GSK and announced on
14 April 2014 that 13 people had been charged in connection with the investigation.

Agencies: United Kingdom: Serious Fraud Office
Year Resolved:
Compliance Monitor:
Ongoing: Yes

According to the media reports, GSK met with the Serious Fraud Office (“SFO”) regarding the allegations in China on 21 July 2013. However, the SFO reportedly has not launched a formal investigation into the matter. On 27 May 2014, GSK disclosed that the UK’s Serious Fraud Office opened a formal criminal investigation of the company’s commercial practices. GSK has stated that it has responded to the investigation.

In March 2017, the SFO director David Green has stated that he would like to resolve the GSK investigation by the time he leaves the SFO in April 2018.

Agencies: United States: Department of Justice
Results: No Action
Year Resolved: 2016
Compliance Monitor:
Ongoing: No

The DOJ’s investigation of the pharmaceuticals industry in a variety of countries appears to be ongoing. On 30 September 2016, the DOJ reportedly told the FCPA Blog via email statement that they have concluded their investigation and will be taking no further action.

Agencies: United States: Securities and Exchange Commission
Results: Cease-and-Desist Order, Civil Penalty
Year Resolved: 2016
Compliance Monitor: N/A
Ongoing: No

On 30 September 2016, GSK, without admitting or denying the SEC’s findings, entered into cease-and-desist order to settle the charges that GSK violated the internal controls and books and records provisions of the FCPA. As part of the settlement, GSK agreed to pay a civil money penalty in the amount of USD 20,000,000 to the SEC. In addition, GSK agreed to provide report of the status of GSK’s remediation and implementation of compliance measures to the SEC for a period of two years at no less than nine-month intervals.

The SEC noted its consideration of GSK’s prompt remedial actions and full cooperation provided to the SEC in
coming to the settlement.


GlaxoSmithKline plc (“GSK”)
GlaxoSmithKline (China) Investment Co Ltd (“GSKCI”)
Sino-American Tianjin Smith Kline & French Laboratories Ltd (“TSKF”)
Tianjin Zhong Xin Pharmaceutical Group Corporation Ltd
Tianjin Pharmaceutical Group Co Ltd.
Shanghai Linjiang International Travel Agency (alleged intermediary of GSK in China)
Mark Reilly (head of GSK’s China operations)
Xi’an China Travel Service Co.
Maatouk Group, Syrian distributor
Huang Hong
Liang Hong
Zhang Guowei
Zhao Hongyan

Discovery Method: Whistleblower

A person familiar with GSK’s Mideast operations emailed the company and threatened to disclose to the DOJ
and SEC.

Country: Iraq

Discovery Method: Whistleblower

The whistleblower who disclosed bribe allegations in Syria said the information would be passed on to the DOJ
and SEC.

Country: Syrian Arab Republic
Discovery Method: Whistleblower
Whistleblower e-mail.

Country: Romania
Discovery Method: Whistleblower

In January 2013, an anonymous 5,200-word email describing a systemic fraud and bribery scheme at GSK was received by the GSK board. Over the next 17 months, the whistleblower sent nearly two dozen emails to Chinese authorities, GSK executives and auditor, PricewaterhouseCoopers (“PwC”). Despite the emails, GSK dismissed the whistleblower allegations as a “smear campaign” and neither properly
investigated the allegations, improve its internal controls nor change its marketing practices.

Country: China

Discovery Method: Whistleblower
Whistleblower e-mails.
Country: Jordan

Discovery Method: Whistleblower
Whistleblower e-mails.
Country: Lebanon

Discovery Method: Unspecified
Country: Poland



GlaxoSmithKline plc: Form 20-F (4 March 2011)
Wall Street Journal: “Glaxo Probes Tactics Used to Market Botox in China” (7 July 2013)

New York Times: “GlaxoSmithKline Accused of Corruption by China” (11 July 2013)
Bloomberg News: “Four Glaxo China Executives Held in Criminal Probe” (15 July 2013)
New York Times: “Glaxo Used Travel Firms for Bribery, China Says” (15 July 2013)

Telegraph: “GSK executive confesses to bribery on Chinese television” (16 July 2013)
Telegraph: “GlaxoSmithKline briefs Serious Fraud Office over China case” (20 July 2013)

Guardian: “GlaxoSmithKline contacts Serious Fraud Office over its China activities” (21 July 2013)
Press Release: “GSK statement regarding recent meeting with Chinese authorities” (GlaxoSmithKline plc) (22

July 2013)

International Business Times: “GlaxoSmithKline Bribery Scandal: 18 More People Arrested in China” (27 July
Reuters: “Bribery by GSK China was coordinated at company level: Xinhua” (3 September 2013)
Wall Street Journal: “GlaxoSmithKline Cuts Staff in China Amid Probe” (4 April 2014)
Wall Street Journal: “Glaxo Investigates Bribery Accusations in the Mideast” (6 April 2014)
Reuters: “GSK faces criminal bribery investigation in Poland” (14 April 2014)
Wall Street Journal: “Glaxo Investigating Bribery Claims in Jordan and Lebanon” (16 April 2014)
Wall Street Journal: “Glaxo Being Investigated by U.K. Serious Fraud Office” (28 May 2014)
GlobalPost: “Exclusive: Allegations of GSK corruption spread to Syria” (24 July 2014)
Reuters: “Exclusive: GSK faces new corruption allegations, this time in Romania” (29 July 2015)

SEC: Cease-and-Desist Order (GlaxoSmithKline plc) (30 September 2016)
FCPA Blog : “GSK pays SEC $20 million to settle China FCPA violations” (30 September 2016)

GlaxoSmithKline: Form 6-K (26 October 2017)
New York Times: “Drug Giant Faced a Reckoning as China Took Aim at Bribery” (1 November 2016)
The Wall Street Journal: “SFO Moving Into High Gear to Resolve Big Corruption Cases” (22 March 2017)

© 2017 TRACE International, Inc.


Interesting Take On Andrew Witty’s Tenure By Erika Kelton For Forbes..

It’s good to see at least one mainstream news outlet has the balls to publish the truth about CEO Andrew Witty’s tenure at the helm at GSK over the past decade- however I would like to see more discussion about the 3 Billion dollar fine for what it actually was: a whitewash and NOT justice for consumers or patients- or in the words of Whistle-Blower Greg Thorpe– a mere “gift to GSK“…

Also, Perhaps Erika Kelton (the author of this Forbes article) could further explain to the public, why so little of this Department of Justice complaint involved Paxil (Seroxat/Paroxetine)? Considering that Paxil (Seroxat) has been GSK’s most controversial drug, I would like to know why was the focus of the investigation on Advair (GSK’s least dangerous drug when compared to drugs like Paxil) and also why do the other whistle-blowers- recruited at the time- not speak out about the sham investigation and white-wash fine?

My e-mail is always open to information and discussion Erika (if you’re reading!). I have much more information about GSK than I have published on this blog- several whistle-blowers have contacted me over the years, and some of these stories haven’t even been covered in the news at all, or online even.

Anyhow, here’s her Forbes article…

(ps- most of the info in this article could be gleaned straight from my blog- as I have been documenting GSK for ten years now- and have often done deeper digging than most journalists)



Mar 24, 2016 @ 04:43 PM 3,930 views

With Andrew Witty’s Departure, Will GlaxoSmithKline Say Goodbye to Fraud?

Erika Kelton ,


I write about whistleblower matters involving fraud and other issues.

GSK has made headlines during Witty’s tenure, but for all the wrong reasons.

The company should scratch internal prospects off the list.

Glaxo SmithKline recently announced that its CEO, Andrew Witty, will be out the door as of March 31, 2017 – a development many were expecting.

GSK has made headlines during Witty’s tenure, but for all the wrong reasons.

Glaxo needs to make major changes after CEO Andrew Witty (on right) leaves the company next year.

Corruption, bribery, illegal marketing, contaminated drugs and collusion are some of the “highlights” of Glaxo’s business practices that were revealed during Witty’s nine years at the helm.

Witty oversaw Glaxo’s “Hall of Shame” when the following entries were added:

A $3 billion payment to the US to settle whistleblower allegations leading to civil and criminal charges that the company had marketed a number of its top-selling drugs for unapproved uses that in many cases endangered patients’ lives and health. It is the largest healthcare fraud settlement ever paid. (My firm represented the leading whistleblowers.)

A $750 million payment to settle whistleblower allegations that led to civil and criminal liability for manufacturing contaminated drugs at its facility in Puerto Rico and selling them.

A $489 million fine by a Chinese court for bribery and corruption charges based on allegations its China division paid doctors to prescribe Glaxo’s drugs. (A record penalty for China.)

Accusations of bribing doctors to prescribe Glaxo’s drugs in at least 11 other countries: Bahrain, Iraq, Jordan, Kuwait, Lebanon, Oman, Poland, Qatar, Romania, Syria and United

Arab Emirates.

A fine of roughly $54.5 million by Britain’s Competition & Markets Authority for allegedly paying generic drug makers illegally to delay the launch of cheaper versions of Glaxo’s Seroxat, an antidepressant.

A fine of about $9 million imposed by India’s Competition Commission for allegedly colluding with Sanofi India in bidding to supply a meningitis vaccine to the government for Haj pilgrims.

That’s a record that won’t be missed.

On the bright side, Witty’s announced resignation provides an opportunity for Glaxo to clean up its act.

Glaxo reportedly is considering external as well as internal candidates for the top spot. The company should scratch internal prospects off the list.

Witty came up through the ranks and landed in the CEO office after more than 20 years of slogging his way up from management trainee. Although Witty surely knows the business well, he was also part of a culture that was not healthy. Only an outsider with great resolve has a chance of reshaping the business to respect compliant and ethical practices.

Given Glaxo’s recent history, the board of directors should ensure that Witty’s replacement does more than drive up profits. A dramatic cultural shift at GSK is long past due.

A good place to start would be to listen to employees when they blow the whistle internally, particularly given the billions the company has paid to resolve significant problems whistleblowers have exposed. Glaxo will find that being open to whistleblower concerns could be very profitable in more ways than one.

Erika Kelton is a whistleblower attorney and partner at Phillips & Cohen LLP. http://www.phillipsandcohen.com. Follow @Fraudmatters.

Former Pharma Exec Heads To Trial On Kickback Allegations

Interesting to note that, despite leading to a 3 Billion dollar fine, and despite immense detail and its huge scope, Whistle-Blower Greg Thorpe’s 7th Amended Complaint resulted in no jail time for any GSK executives. In retrospect it seems that GSK’s 3 billion fine was a slap on the wrist for GSK (and perhaps the revolving door between GSK and the department of justice had something to do with that?) and then it was business as usual.  Until high level executives in these corrupt companies are held to account for their role in these scams, nothing will change…

Former Pharma Exec Heads To Trial On Kickback Allegations


By Ed Silverman @Pharmalot

May 17, 2016

Between 2009 and 2012, W. Carl Reichel allegedly orchestrated a campaign to give doctors money, free meals, and phony speaking fees in exchange for prescribing medicines sold by Warner-Chilcott, where he had been the president of the pharmaceutical division, according to federal prosecutors.

Next week, he goes on trial in what is expected to be a closely watched case in the pharmaceutical industry. That’s because the case marks one of the relatively few instances in which federal prosecutors have sought to hold a high-ranking executive from a drug maker accountable for such activities.

“To the extent the executive is convicted, it will impact the industry,” said Anne Walsh, a former associate chief counsel at the US Food and Drug Administration who is now a director at Hyman, Phelps & McNamara, a law firm that specializes in regulatory matters.

To be sure, other drug company executives have faced penalties for illegal activities. Notably, three former executives at Purdue Pharma pleaded guilty in 2007 to misleading the public about the risk of addiction posed by the OxyContin painkiller. They were also banned from any dealings with federal health care programs, notably, Medicare and Medicaid.

But such instances are relatively rare in the pharmaceutical industry, even as a parade of drug makers has paid large fines for civil and criminal violations. Moreover, the Reichel trial gets under way just eight months after the US Department of Justice issued a memo that serves as a blueprint for pursuing individuals who engage in corporate malfeasance.
Read More
Former sales rep for opioid drug maker pleads guilty to kickbacks

There is now a “more uniform, systematic, and sustained focus on individuals,” said Sally Yates, a US Deputy Attorney General at a New York City Bar Association meeting last week. She originally issued the DOJ memo.

“There is one system of justice — one in which wrongdoers can and must be held accountable based on facts and evidence, not on position or title, power or wealth,” she said.

The emphasis on individuals also emerges after a drop-off in the number of settlements that the Justice Department has reached with drug makers for illegal activities, such as paying kickbacks to physicians or illegally marketing medicines. From a high of 18 deals in 2013, which capped a rising trend, the number of settlements fell to 11 last year, according to data compiled by Public Citizen.

In the Reichel case, the feds allege that he developed and oversaw an illegal strategy to boost prescriptions for several drugs, including the Actonel osteoporosis treatment and the Doryx acne medicine. Among the charges: Reichel provided sales reps with unlimited expense accounts in order to wine and dine doctors, and he suggested targeting doctors who were already frequent prescribers, according to the indictment.

He faces no more than five years in prison, three years of supervised release, and a fine of $250,000. We asked his attorney for comment and will update you accordingly.

“I think the Justice Department needs and wants to send a signal,” said Patrick Burns of Taxpayers Against Fraud, a nonprofit that that advocates for tough penalties and is partially funded by attorneys. ”I hope this will become a larger effort to bring personal accountability to corporate suites, because if they bring pain to the executive, it will bring change to the corporation.”

At the time that Reichel was indicated last fall, Allergan, which now owns Warner-Chilcott, agreed to plead guilty to health care fraud and pay $125 million to resolve criminal and civil charges in connection with illegally promoting several drugs, according to the settlement.

Three former sales managers — Timothy Garcia, Landon Eckles, and Jeff Podolsky — also pleaded guilty for directing sales reps to access confidential patient data after insurers denied coverage for the drugs. The company sought the patient data in order to submit what are called prior authorization forms, which refer to specific requests made by doctors to insurers to provide coverage for a medicine.

They each face no more than 10 years in prison, three years of supervised release, and a fine of $250,000. Their respective sentencings will not occur until between July and September.

Ed Silverman can be reached at ed.silverman@statnews.com
Follow Ed on Twitter @Pharmalot

Irish Health Minister For Health (Leo Varadkar) Slams Greedy Drug Companies.. Plus.. Pharma CEO, Martin Schkreli Is Arrested For Fraud..

The Irish Health minister, Leo Varadkar, made some very damning comments about the pharmaceutical industry recently:


“…Minister for Health Leo Varadkar has condemned the “greed incorporated” in drug companies and said dealing with some of them brought out “whatever socialist instincts may be buried in me”.

His Dublin West constituency colleague and Socialist Party TD Ruth Coppinger had said ordinary people were held hostage by the “profiteering of these companies under our capitalist system. That is why I am a socialist and why I believe health should be a priority.”

She called on the Minister to negotiate a cut in the price of the new Orkambi drug for cystic fibrosis which the HSE estimates will cost €90 million a year. Ireland has the highest cystic fibrosis rate in the world .

Mr Varadkar agreed drug companies “overcharge and use patients as pawns” and in some countries hired PR companies to coach patients to advocate on their behalf. He said “these people also pay themselves massive salaries, draw down massive profits and pay massive dividends. They are people whose bonus every year is based on how much they can overcharge a small country.”

The Minister said they targeted small countries “and get the small country to set the high price and then offer bigger countries slight discounts”.

This, he said, “is a case of greed incorporated. While I am not a socialist, dealing with some of these companies would ring out whatever socialist instincts may be buried in me.”

In other (timely) news, greedy sociopath, and Turings Pharma CEO, Martin Shkreli, (apparently the most hated man in America) has been arrested for fraud..

It has been a busy week for Martin Shkreli, the flamboyant businessman at the center of the drug industry’s price-gouging scandals.

He said he would sharply increase the cost of a drug used to treat a potentially deadly parasitic infection. He called himself “the world’s most eligible bachelor” on Twitter and railed against critics in a live-streaming YouTube video. After reportedly paying $2 million for a rare Wu-Tang Clan album, he goaded a member of the hip-hop group to “show me some respect.”

Then, at 6 a.m. Thursday, F.B.I. agents arrested Mr. Shkreli, 32, at his Murray Hill apartment. He was arraigned in Federal District Court in Brooklyn on securities fraud and wire fraud charges.

Maybe one day the FBI will come for the Glaxo  pharmafia crooks?  (Garnier, Witty, Bob Ingram, Viehbacher… and the rest)

Here’s hoping…








UK Serious Fraud Office and the GSK 3

By Bob Fiddaman and The Truthman
(Because two heads are better than one)
In 2014 it was announced that the Serious Fraud Office (SFO) were going to be investigating GlaxoSmithKline with regard to their nefarious activities that have recently come to light in countries such as China, UK, USA, Iraq, Poland, Bahrain, Jordan, Kuwait, Syria, Lebanon, Oman, Qatar and the United Arab Emirates.

As with all investigations we rarely get to see what is going on, that’s why I found the following court document surprising, so surprising that I decided to invite long time friend and fellow blogger, the Truthman, on board to help me to some digging. Truthman’s excellent exposé on GSK can be found on his blog, the aptly titled, “GSK, Licence To Kill.”

The court document gives us three names, there may be more employees of GSK, past and present, that may have already been interviewed by the SFO or, as we suspect, many more who may be interviewed in the future.

The three GSK employees, two of them current and one a former employee, are, it appears, not cooperating with the SFO, each claiming that they have a right to be legally represented during those interviews.

According to court documents the three individuals were told by the investigating SFO that they could not have legal representation – the SFO later did a u-turn but told the three that they could not use the services of the same law firm representing GSK with respect to the investigation.

All three asked for a judicial review on the decision claiming that they had a right to use whoever they chose to represent them. The  High Court, after reviewing the original decision, found that the grounds were unarguable.

The three employees.

Whilst it’s important to note that the three individuals are not suspects into GSK’s alleged bribery and corruption, it’s interesting to see the positions they hold at GSK. It’s also interesting that these individuals, if they have nothing to hide, would hold up the process of the SFO investigation on the basis that they wanted their legal representation to come from the same law firm, Arnold & Porter UK LLP. If, the ‘GSK Three’ wished to help the SFO then surely it wouldn’t matter who they were represented by.

So, who are the three?

1. Jason Lord. (No photo available)

Research shows that Lord was, in 2006, GlaxoSmithKline (GSK) Security Adviser in the Corporate Security and Investigations Department.

In 2006, Lord attended and gave a presentation at the Jordan Intellectual Property Association (JIPA), a membership-based association that has organized several IP training events in Jordan. (Web Archive)

For those that don’t know, Jordan is another country currently under investigation. The claims are that GSK staff in Jordan have bribed doctors. The allegations relating to Jordan and also Lebanon were first reported in the Wall Street Journal, which cited emails from a person who first contacted GSK in December. The paper said the emails allege that GSK sales representatives bribed doctors to prescribe drugs and vaccines by issuing free samples to doctors that they were allowed to sell on.

Not much else is known about Jason Lord.

2. Paul Reynolds.

Paul Reynolds, GlaxoSmithKline

According to his LinkedIn page, Reynolds currently holds the position of GSK Head of Respiratory Marketing, UK.

Between July 2010 – March 2012 Reynolds was GSK’s Senior Marketing Director, Seretide (Europe, Asia Pacific, and Emerging Markets)

Seretide  is a product manufactured and marketed by GlaxoSmithKline, it is used to treat Asthma.

In 2014, BBC Panorama aired ‘Who’s Paying Your Doctor?‘ where it was alleged that GSK paid doctors to promote GSK’s asthma drug Seretide in Poland between 2010 and 2012.

Ironically, in 2012, Reynolds became Commercial Director, Retail for GlaxoSmithKline, a position which he held in Warsaw, Poland.

In 2011, Reynolds, wrote an article for the pmlive, a website about the pharmaceutical industry.

Some of his quotes, we feel, were misplaced. Maybe Reynolds was speaking from the heart when he said…

“Companies like GSK began taking action against the mistakes of the past many years ago. I feel that I operate in a company that  works tirelessly to do the right thing, not just to work within the  rules and to restore trust, but to act and operate transparently and  ethically, because it is the right and the only thing that a business  and an industry should do. Pushing at the boundaries against competitors or with customers, whether they are prescribers, payers or patients, is not good business. The industry was still learning to operate within a new space, having previously enjoyed much greater freedom. So, naturally the focus was on understanding how to operate within new rules, without contravening them.”

When I look back at this early part of my marketing career, I see the naivety of some of my actions and of those of people around me, as we tested how far we could go while staying within the remit of the Code. For me now, rules are to be bettered and not tested and this outlook is one I see as the norm today.

We find it interesting that Paul Reynolds mentions the ‘pushing of the boundaries’ early in his career. Was Reynolds suggesting the boundaries of what is ethical perhaps or what is legal? He also says that the industry previously enjoyed ‘greater freedom’, what exactly does he mean here? ‘Greater freedom to do what? Considering  this article was written in 2011 and GSK were yet to be fined for their $3 Billion US fraud felony in 2012, and their China bribe operation in 2014, perhaps Paul Reynolds was being a little premature in his assessment of GSK’s ethical compliance system?

As we mentioned, Reynolds currently holds the position of GSK Head of Respiratory Marketing, UK. Seretide is the UK brand name for Advair, as it is known in the US.

GSK’s Advair is used to prevent asthma attacks, and to treat chronic obstructive pulmonary disease [COPD] and the recent whistleblower suit, that GSK plead guilty to and paid a record $3 billion in fines, shows how they aggressively marketed it with promotional ‘get togethers’ as shown in the video  excerpts [below]

3. Justin Mayger

Justin Mayger, GlaxoSmithKline

Mayger currently holds the position of Director, Compliance and Control Integration at GSK. He was first employed by GSK in 2005 where he took on the position of Senior Business Risk Consultant. Five years later saw Mayger take up the position of Director, Anti-Bribery and Corruption Prevention  (ABAC) at GSK. (LinkedIn)

The role of the ABAC is to investigate allegations as soon as it becomes aware of them. Part of GSK’s policy on bribery and corruption in the business reads…

GSK has zero tolerance towards bribery and corruption. GSK employees shall not make, offer to make, or authorise payment to a third party (e.g. sales agent, distributor or intermediary) with knowledge that all or part of the payment will be offered or given to any individual to secure an improper advantage, obtain or retain business.

All three will now be interviewed by the UK Serious Fraud Office. It’s unknown why the SFO have picked these three individuals to help with their investigation.

Glaxo’s current CEO, Andrew Witty, was the Vice President and General Manager of Marketing of Glaxo Wellcome Inc. [GlaxoWellcome and SmithKline Beecham merged in 2000 to become GlaxoSmithKline.] Some of his responsibilities included, strategy development, marketing execution and new product positioning. Witty and his team were awarded a Medical Marketing Association [MMA] award [Medical Marketer of the Year] in 1998. He also worked in the Company’s International New Products groups, both in the Respiratory and HIV/Infectious disease fields.

Two words – Marketing and Respiratory. Alarm bells anyone?

GSK’s CEO, Andrew Witty, said in a statement about the record $3 billion payout that “Today brings to resolution difficult, long-standing matters for (Glaxo). Whilst these originate in a different era for the company, they cannot and will not be ignored. On behalf of (Glaxo), I want to express our regret and reiterate that we have learnt from the mistakes that were made,” 

We think the SFO need to look further afield if they wish to get to the bottom of the whole Seretide promotional activities of GSK, if indeed that is their intention here.

Collectively, myself and co-writer, Truthman, strongly urge the SFO to interview Andrew Witty if they wish to know more about the respiratory drug promotion from GlaxoSmithKline. Let’s face it, the guy must have a wealth of experience in all matters relating to the respiratory side of the business at the global pharmaceutical giant. Failing that, maybe the SFO should contact Peter Humphrey, he was hired by GSK China to investigate bribery claims, despite GSK denying that the claims were true – they later went on to plead guilty to the claims.

We would be extremely surprised if Andrew Witty ends up anywhere near a prosecution, given that lawyers representing GSK seem to be doing their very best to stall the investigation.

GSK have huge power and sway in the UK, they are a major cash cow, and one only has to look at  the board to see that there are many Knights of the realm (Sir’s) who  make most of the executive decisions at GSK. In fact, GSK have so many Knights stewarding the company we could be forgiven if we mistook it as some kind of pseudo-Camelot, except these Knights certainly aren’t as chivalrous.

Another Revolving Door

Trying to get a successful prosecution against GSK, or any individuals operating within GSK, may prove to be difficult given that Kathleen Harris, a former SFO lawyer, was recently hired as a partner at US-headquartered firm Arnold & Porter, the very same law firm who are defending Glaxo and who wished to represent the Glaxo three during their interviews. (Source) During her time at the SFO she supervised and provided strategic oversight to a number of high-level investigations and prosecutions. She also played a key role in developing seminal guidelines on critical issues, including plea negotiations, civil remedies, civil recovery and corporate prosecutions.

Upon leaving the SFO to join Arnold & Porter, Harris said, “Arnold & Porter has a prominent group of white collar defense lawyers with extensive criminal law experience on the prosecutorial side from the U.S. Justice Department and other regulatory agencies, as well as on the defense side. It’s great to be a part of this team.” (Source)

It wouldn’t surprise us if the current SFO investigation comes down to some sort of plea negotiation between both parties. Both the Truthman and I hope we are wrong. History, however, may repeat itself as this is not the first time we have seen a revolving door between prosecution and defence where GSK have been involved in litigation or investigation. (see US Attorney General Eric Holder and the Revolving Door)

Contrast the SFO investigation with the MHRA’s investigation into GSK and you will see such a huge difference. The SFO wish to seek the truth by actually investigating claims, where the MHRA carried out a near five-year investigation into GlaxoSmithKline, commencing in 2003 and ending in 2008, and, well, really didn’t do much to find the whole truth.

GSK had failed to report in a timely manner adverse event data from clinical trials in children of its antidepressant, Seroxat (Paxil). (See Restoring Study 329) After nearly five long years the MHRA decided not to prosecute, not only that, it emerged that the MHRA did not even bother to interview any employees from GSK.

At the time, I, Bob Fiddaman, asked the MHRA, under the terms of the Freedom of Information Act, the following question…

“Why were MHRA enforcement investigators unable to question GSK staff?”

The MHRA replied…

Under UK criminal law suspects in criminal investigations can not be compelled to answer questions, they have a right to remain silent. Lengthy negotiations were conducted with solicitors acting for individual members of GSK staff and for GSK itself with a view to persuading them to attend interviews under caution. The conclusion of the correspondence was that all the potential interviewees indicated that they would not attend an interview under caution.

The individual suspects (as opposed to the corporate entity GSK) could have been arrested and required to attend an interview under caution. However they could still not be compelled to answer questions and, given that their solicitors had clearly indicated that they would not answer questions, the investigation team concluded that there was nothing to gain by carrying out arrests.

The near five-year investigation resulted in the MHRA sending GSK a “You’ve been naughty, but it’s okay” type of letter, a letter that, the then current GSK CEO, JP Garnier, responded to by stating, that ‘Glaxo had done nothing wrong.’

Talk about arrogance!

Maybe the MHRA should take a lesson from the Serious Fraud Office or, maybe the MHRA need to get better counsel?

Those in-the-know know why the MHRA did not prosecute GSK and it had nothing to do with their official explanation.

Let’s hope that Messrs Lord, Reynolds and Mayger can provide the SFO with information they need to find the ringleader involved in the fraud and bribery, let’s hope they (SFO) can show the British drug regulator how investigations should be carried out. Let’s hope the SFO’s investigation leads to criminal prosecutions and, hopefully, some custodial sentences.

With a former SFO employee now working for Arnold & Porter, our hopes may be dashed.

I hope I can make it across the border. I hope to see my friend and shake his hand. I hope the pacific is as blue as it has been in my dreams. I hope.Red, Shawshank Redemption

Bob Fiddaman & The Truthman.

Whistleblower Greg Thorpe’s 7th Amended Complaint..

GREGt“..When you look at the detail and accuracy of Greg Thorpe‘s written complaints distributed to the highest levels of Glaxo (See ‘Document Links’ Below) it’s almost surreal that the company took no corrective action. Now more than a decade later, GSK is essentially admitting that Thorpe had been right in 2001″.. Kenney said

“…As a Colorado Springs sales representative for GlaxoSmithKline, Greg Thorpe tried to put a stop to the practice. His manager wrote him up for not being a “team player” after he objected to the free spa treatments and pedicures, hunting trips, tickets to sports games and skiing junkets that his supervisors expected him to give out to doctors and others..”

“The sky was the limit,” said Thorpe, whose whistle-blower lawsuit against his former employer ended with a $3 billion settlement with the federal government. “Those who spent more money got rewarded because they were positioning the company for more business. And it did pay off.”

“How many kids died from Paxil (and WellButrin) being pushed illegally off label?”

When GSK were fined 3 Billion dollars by the US department of Justice in 2012 (for various criminal/fraudulent activities spanning over more than a decade- which resulted in some cases- in deaths of patients/consumers) the media concentrated mainly on the headline grabbing “3 Billion dollar fine” and very little of the exhibits (and the content of the actual legal complaint) were highlighted. This is understandable, considering this was the biggest health care fine in US history, but the fine itself is only a very small part of the overall story. These exhibits reveal a sinister and sociopathic corporate culture at GSK; a culture which indicate (and considering GSK’s recent China bribe scandal– arguably- still display) an utterly callous disregard for patient health, and an insatiable appetite for fraud and corruption in the pursuit of profits.

The main whistle-blower behind this record breaking fine was a previous employee of GSK- Greg Thorpe. Greg spent 23 years with the company, but when they expected him to get involved in prescribing medications such as the anti-depressant Wellbutrin to kids, Greg felt the need to speak out. Typically, GSK responded by vilifying Greg, and making his life hell. Greg’s original mails (to the GSK upper management -about his absolute unwillingness to participate in these nefarious activities) make for sobering reading. I applaud Greg for his actions, he deserves much praise and respect for doing the right thing. He is a hero (in the true meaning of the word), and he is truly brave and courageous; however I wish I could say the same for the media coverage of the fine itself. Very little of these exhibits were printed online or in broadsheets. The coverage of the finer details was paltry. I always wondered though, why did the department of Justice not go back further than 2000 with the Wellbutrin (off label allegations)? It couldn’t be anything to do with the fact that Andrew Witty was head of marketing around 1997/98 and involved in promoting Wellbutrin also could it? surely not…

Aside from that, I was also disappointed to see that there was very little in this legal complaint about Paxil (Seroxat). However, I have since learned (from my source) that this part of the complaint should have been much longer. Again, I wonder why it was cut short? Another aspect of all this that is interesting is- the fact that there were other whistle-blowers: what was their contribution? What did they know about Paxil (Seroxat) withdrawal/suicides/birth defects etc, or other GSK crimes, where are their complaints and exhibits? Why do we see mostly stuff from Greg in the complaint? (with some input from Blair Hamrick), what did the other whistle-blowers reveal? (if anything at all?) Why do the other four whistle-blowers not speak out at all?

If either whistle-blowers Michael Lafauci, Lois Graydon, Thomas Geraghty, or Matthew Burke are reading this and they would like to contact me about anything in this post, please e-mail : truthman30@gmail.com.


Furthermore, it seems to me that this 3 Billion dollar fine was merely a gift to GSK from Eric Holder, he did say, after all- that some companies were ‘too big to fall’ (he later countered this with a remark that ‘there is no such thing as too big to jail’ but it seems in Glaxo’s case, this wasn’t to be). GSK provide massive employment, investment, research to US states as well as donations to US institutions, academia etc, therefore perhaps Holder was correct, shoot down the beast, and the greater good is affected- however does this make it ethically sound to slap them on the wrist for corporate manslaughter of children? Or how about the birth defects from Paxil? what amount of fines can atone that crime?

The full 7th amended complaint can be found here

Personally, I believe, these several hundred pages of exhibits were the tip of the iceberg, who knows how much more could have been unearthed?

There were thousands of reps with access to these kinds of documents, and thousands more in the company would have been aware, to some degree..

If any of them have a conscience, and are reading this, contact me (anonymously if you like) on: truthman30@gmail.com

The following are examples of exhibits (from Greg’s Complaint) detailing how GSK marketed their various products off-label illegally to doctors in the US.




Glaxo’s settlement agreement and the government’s charges against Glaxo

The settlement agreement signed by GlaxoSmithKline, the federal government and the whistleblowers describes not only the terms of the settlement of the whistleblower cases but also the whistleblower claims the government supported based on its investigation.

The claims the government stated in the settlement agreement describing Glaxo’s off-label marketing of Wellbutrin, Advair, Lamictal, Zofran, Imitrex and Valtrex and the financial inducements Glaxo gave to doctors to convince them to prescribe those drugs were based largely on the qui tam lawsuit brought by Phillips & Cohen’s whistleblower clients.

For more information about the government’s claims and the settlement amount allocated to each drug, see the Glaxo settlement agreement for the whistleblower cases and the Justice Department fact sheet about Glaxo’s $3 billion settlement.

Below are the claims the government made in the settlement agreement about Glaxo’s off-label marketing of Wellbutrin, Advair, Lamictal, Zofran, Imitrex and Valtrex and financial inducements offered to doctors to prescribe those drugs. The settlement agreement also contains allegations involving Paxil, which were based on a separate whistleblower lawsuit.

  1. Wellbutrin: During the period January 1, 1999 through December 31, 2003, GSK knowingly: (a) promoted the sale and use of Wellbutrin for conditions (including weight loss, the treatment of obesity, sexual dysfunction and in combination with other antidepressants) and at dosages other than those for which its use was approved as safe and effective by the FDA, and some of which were not medically-accepted indications as defined by 42 U.S.C. §1396r-8(k)(6) for which the United States and state Medicaid programs provided coverage for Wellbutrin; (b) made and/or disseminated unsubstantiated and/or false and/or misleading representations or statements about the safety and efficacy of Wellbutrin; and (c) offered and paid illegal remuneration to healthcare professionals to induce them to promote and prescribe Wellbutrin, in violation of the Federal Anti-Kickback Statute, 42 U.S.C. ‘ 1320a-7b(b). As a result of the foregoing conduct, GSK knowingly caused false or fraudulent claims for Wellbutrin to be submitted to, or caused purchases by Medicaid and the other Federal Health Care Programs.
  2. Advair: During the period January 1, 2001 through June 30, 2010, GSK knowingly: (a) promoted the sale and use of Advair for conditions and dosing regimens other than those for which its use was approved as safe and effective by the FDA (including first line use for mild or all asthma, and for asthma previously treated by short-acting inhalers alone), and some of which were not medically-accepted indications as defined by 42 U.S.C. § 1396r-8(k)(6) for which the United States and state Medicaid programs provided coverage for Advair (b) made and/or disseminated unsubstantiated and/or false and/or misleading representations or statements about the safety and efficacy of Advair (including that Advair was superior to the single component, inhaled corticosteroid alone, for patients previously treated by short-acting inhalers alone); and (c) offered and paid illegal remuneration to health care professionals to induce them to promote and prescribe Advair, in violation of the Federal Anti-Kickback Statute, 42 U.S.C. § 1320-7b(b). As a result of the foregoing conduct, GSK knowingly caused false or fraudulent claims for Advair to be submitted to, or caused purchases by Medicaid, Medicare and the other Federal Health Care Programs.
  3. Lamictal: During the period January 1, 1999 through December 31, 2003, GSK knowingly (a) promoted the sale and use of Lamictal for a variety of conditions other than those for which its use was approved as safe and effective by the FDA (including bi-polar depression, neuropathic pain, and various other mental diseases), and some of which were not medically-accepted indications as defined by 42 U.S.C. § 1396r-8(k)(6) for which the United States and state Medicaid programs provided coverage for Lamictal; (b) made and/or disseminated unsubstantiated and/or false and/or misleading representations or statements about the safety and efficacy of Lamictal concerning the uses described in section (a) of this sub–paragraph; and (c) offered and paid illegal remuneration to health care professionals to induce them to promote and prescribe Lamictal, in violation of the Federal Anti-Kickback Statute, 42 U.S.C. §1320-7b(b). As a result of the foregoing conduct, GSK knowingly caused false or fraudulent claims for Lamictal to be submitted to, or caused purchases by Medicaid and the other Federal Health Care Programs.
  4. Zofran: During the period January 1, 2002 through December 31, 2004, GSK knowingly (a) promoted the sale and use of Zofran for a variety of conditions other than those for which its use was approved as safe and effective by the FDA (including hyperemesis or pregnancy-related nausea), and some of which were not medically-accepted indications as defined by 42 U.S.C.  § 1396r-8(k)(6) for which the United States and state Medicaid programs provided coverage for Zofran; (b) made and/or disseminated unsubstantiated and/or false representations or statements about the safety and efficacy of Zofran concerning the uses described in section (a) of this sub-paragraph; and (c) offered and paid illegal remuneration to health care professionals to induce them to promote and prescribe Zofran, in violation of the Federal Anti-Kickback Statute, 42 U.S.C. § 1320-7b(b). As a result of the foregoing conduct, GSK knowingly caused false or fraudulent claims for Zofran to be submitted to, or caused purchases by Medicaid and the other Federal Health Care Programs.
  5. Imitrex, Lotronex, Flovent and Valtrex: From January 1999 through December 2004, GSK paid illegal remuneration for speaker programs, mentorships, preceptorships, journal clubs, advisory boards (including Local and Regional Advisory Boards and Special Issues Boards), Reprint Mastery Trainings, and provided gifts (including entertainment, cash, travel and meals) to health care professionals to induce them to promote and prescribe the drugs Imitrex, Lotronex, Flovent and Valtrex, in violation of the Federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b). As a result of the foregoing conduct, GSK caused false claims to be submitted to Medicaid and certain other Federal Healthcare Programs.


Why so little on Paxil (Seroxat)?

Paxil1 Paxil2 Paxil3


GlaxoSmithKline: former chairman denies knowledge of $3bn US deal
Richard Sykes says pharmacy firm’s issues ‘complicated’, as FairPensions urges pursuit of executive malpractice
Sir Richard Sykes, ex-chairman GlaxoSmithKline
Sir Richard Sykes, former chair of GlaxoSmithKline, which has been criticised for ‘putting profits above ethics’. Photograph: Richard Saker

Terry Macalister

Wednesday 4 July 2012 19.54 BST
Last modified on Wednesday 1 October 2014 12.41 BST

Sir Richard Sykes, the former chairman of GlaxoSmithKline, has refused to criticise actions at the large pharmaceutical company, saying he had “not a clue” about the details of a $3bn settlement with US authorities.

But critics said the case, involving issues dating to 1997, underlined the need for tougher action, which could include certain executives being jailed.

FairPensions, the campaign for responsible investment, linked the GSK scandal to the firestorm that has engulfed Barclays bank in the past week, and said the controversies were costing the City much more than tougher regulation ever could.

Sykes, now chairman of the Royal Institution, and the UK’s largest NHS healthcare trust, said the issues concerning the pharmaceutical group, where he had been chairman, were “complicated” and he was still digesting the case, despite a corporate statement from GSK more than 36 hours earlier.

“I have not had a chance to read the newspapers and have not a clue as to what is going on,” he said, from his home in London. “It is a complicated situation with two different companies [SmithKline Beecham and Glaxo Wellcome] and they did not really start coming together till 2001.”

Sykes was chief executive of Glaxo before the £100bn merger in 2000 but then stood down as chairman of the combined GSK in the middle of 2002.

A whistleblower, Greg Thorpe, first alerted the company to the entertainment offered doctors and the culture that allegedly put profits above ethics in 2001.

Sykes suggested that the problems could have related mainly to SmithKline, prior to its merger with Glaxo.

But GSK insisted that the problem was in the US and in the past: “Since Andrew Witty became chief executive in 2008, GSK has made significant changes at all levels within the company to ensure we act with integrity in everything we do, and these matters do not reflect the company that we are today.”

The company admitted in its settlement with various American authorities that it had been offering lavish holidays and hospitality to targeted doctors and encouraged the prescription of unsuitable anti-depressants to children.

GSK also paid for articles to appear in medical journals lauding its products, and hired “independent” doctors to promote the treatments.

Thorpe raised his concerns with David Stout, who was then head of the US business, and Bob Ingram, GSK’s chief operating officer. When he was forced out of the company he took his case to the regulators, who spent almost 10 years investigating the issues.

Stout became a non-executive director of another London-listed pharmaceutical company, Shire plc, and Ingram is chairman of the biotech firm Elan Corporation.

Louise Rouse, director of engagement at FairPensions, said shareholders should be asking searching questions to ensure there is sufficient oversight of people and practices at the new companies the executives had joined.

“Even though the management has moved on, shareholders at GSK need to ensure that the root and branch reform promised on paper has in fact been carried out,” she said.

Sidney Wolfe, director of the Health Research Group at the Washington-based campaign group Public Citizen, noted that the latest fine on GSK was just the latest in a series dating back to 1991.

He said: “Until more meaningful penalties and the prospect of jail time for company heads who are responsible for such activity become commonplace, companies will continue defrauding the government and putting patients lives in danger.”


GSK Fined US$3 BILLION – largest health fraud settlement in U.S. history

So hot on the heals of more fraud by Merck [Merck Vaccine Fraud – 2nd US Court Case Over MMR Vaccine] we now have more fraud by GlaxoSmithKline.  You can read the Associated Press breaking story here:

GlaxoSmithKline to pay $3 billion in fines, the largest health care fraud settlement in U.S. history – THE ASSOCIATED PRESS – Tuesday, July 3, 2012

The Justice Department said that British drugmaker will plead guilty to promoting popular antidepressants Paxil and Wellbutrin for unapproved uses. The company also will plead guilty to failing to report to the government for seven years some safety problems with diabetes drug Avandia, which was restricted in the U.S. and banned in Europe after it was found in 2007 to sharply increase the risks of heart attacks and congestive heart failure.

Instead of repeating the story we are going to set out the names of GSK’s Board and ask what they have done about this and also ask what is the next fraud to come out of the company? This is not the first time GSK has been mired in fraud.  We list below the Board of Directors of GlaxoSmithKline today – so check out who was on the board, read the following facts and then ask yourself “should they still be on GSK’s Board?” 

And don’t forget – what are we supposed to think of people like the GSK Board who hired James Murdoch of News International onto their Board of Directors to protect their reputation and then had to dump him because of all the corruption associated directly with James Murdoch at News Corporation and News International which is being examined publicly in the Leveson Inquiry.

And should British first ministers like Prime Minister David Cameron and Chancellor George Osborne cosy up to a company like GSK?  Should we as the public cross the street to avoid GSK and all who have anything to do with it?

And let us be clear about the dates – PA report:

The case against Glaxo was originally brought in January 2003 by two whistleblowers, former Glaxo sales representatives Greg Thorpe and Blair Hamrick. In January 2011, the federal government joined in the case.

BUT PA also report:

The company also will plead guilty to failing to report to the government for seven years some safety problems with diabetes drug Avandia, which was restricted in the U.S. and banned in Europe after it was found in 2007 to sharply increase the risks of heart attacks and congestive heart failure.

If 2008 is the cut-off date then is it the case that any current GSK Director on the Board prior to 2008 is one of those ultimately responsible for overseeing fraud – yes that’s right – fraud?

We can also justifiably ask, is 2008 the appropriate cut-off date or should it be October 2010 when the European Medicines Agency withdrew the licence for Avandia?  In other words the GSK Board of Directors as it was constituted up to and including October 2010 are all implicated as GSK was still marketing Avandia: European Medicines Agency experts have said Avandia, a leading diabetes drug, should be suspended from the market. BBC Health News 23 September 2010 Last updated at 17:13

As you can see of the 16 current GSK Board members, 10 were on the Board during and/or prior to 2008 and 11 up to October 2010.   So should these people be on the Board of any company?  And if not, what are they still doing there?  These are fair questions to ask.  After all, if they can let their companies get away with fraud then everyone might as well do the same.  And what did they know of these frauds?  And if they claim they knew nothing – then why are they on the Board of the Company in the first place.

PA reports: “Sir Andrew Witty, Glaxo’s CEO, expressed regret Monday and said the company has learned “from the mistakes that were made.”

It needs to learn more – like most of the Board of Directors should go and right now.  Here they are:

Sir Christopher Gent – joined the Board as Deputy Chairman in June 2004.

Sir Andrew Witty – Chief Executive Officer – joined the Board in January 2008.

Professor Sir Roy Anderson – joined the Board in February 2007

Dr Stephanie Burns – Non-Executive Director – joined the Board in February 2007.

Stacey Cartwright – Non-Executive Director joined the Board in April 2011.

Larry Culp – Non-Executive Director joined the Board in July 2003.

Sir Crispin Davis – Non-Executive Director joined the Board in July 2003.

Simon Dingemans – Chief Financial Officer joined the Board in January 2011.

Lynn Elsenhans – Chief Financial Officer joined the Board in July 2012.

Judy Lewent – Non-Executive Director joined the Board in April 2011. BUT She is the former Executive Vice President and Chief Financial Officer of Merck & Co., Inc. which is a corporation which has previously been found guilty of fraud.

Sir Deryck Maughan – Non-Executive Director joined the Board in June 2004.

Dr Daniel Podolsky – Non-Executive Director joined the Board in July 2006.

Dr Moncef Slaoui – Chairman, Research & Development joined the Board in May 2006.

Tom de Swaan – Non-Executive Director joined the Board in January 2006.

Jing Ulrich – Non-Executive Director joined the Board in July 2012.

Sir Robert Wilson – Non-Executive Director joined the Board in November 2003

Former GSK Senior Exec, Chris Viehbacher, Embroiled In Scandal At Sanofi (2014)


Bad medicine: Suit claims ‘kickback’ scheme at Sanofi

Wednesday, 3 Dec 2014 | 3:27 PM ET


COMMENTSJoin the Discussion

A new lawsuit claims the recently ousted CEO of Sanofi and other executives at the huge drugmaker conducted a scheme in violation of federal law to funnel tens of millions of dollars in kickbacks and other incentives to get the company’s diabetes drugs prescribed and sold.

The whistleblower lawsuit also claims Sanofi CEO Christopher Viehbacher was fired by the company’s board in October “in part, because Defendant Viehbacher was involved in the aforesaid illegal and/or fraudulent activity,” which allegedly went on “over the course of many years.”

Ousted Sanofi CEO Christopher Viehbacher

Eric Piermont | Getty Images
Ousted Sanofi CEO Christopher Viehbacher

The suit filed Wednesday says that Sanofi used contracts that appeared to be for legitimate purposes to direct money to hospitals, doctors and retail pharmacy chains to induce them to purchase and prescribe Sanofi’s diabetes medication. It also claims that “approximately $1 billion is missing from Defendant Sanofi which has not been accounted for.”

Sanofi itself in October cited poor relations between Viehbacher and the board as the reason he was sacked.

Read MoreSanofi ousts CEO after warning on diabetes business

The bombshell new kickback allegations by a Sanofi paralegal named DianePonte—who herself was fired in September after allegedly suffering retaliation for bringing the scheme to light—come two years after the drug company reached an agreement with the Justice Department and several states to pay $109 million to settle claims that it engaged in kickbacks by giving doctors free samples of an arthritis drug as a way to encourage them to buy and prescribe that medication.

Such kickbacks are illegal because they can encourage the prescription of drugs that are covered by federal Medicare and Medicaid insurance programs, and thus have taxpayers foot the bills for medication that might otherwise not have been prescribed.

After that 2012 settlement, Sanofi also had a corporate integrity agreement with the Health and Human Services Department requiring the company to abide by federal health-care laws and to report illegal activities by the company and its employees, Ponte’s suit said. However, a check of HHS’ database of such integrity agreements indicated that pact had not been executed as of yet.

Sanofi on Wednesday indicated it had not yet been served with Ponte’s lawsuit, but in a statement said, “Sanofi does not comment on litigation.”

On Thursday, after reviewing the suit, Sanofi issued a new statement, which said: “Diane Ponte is a disgruntled former employee who is opportunistically attacking our company. Ponte filed for violations of New Jersey state employment law, specifically the New Jersey Conscientious Employee Protection Act (‘CEPA’).”

“The employment law allegations are without merit, and Sanofi will vigorously defend the suit. We take this matter very seriously and will protect our company and our reputation,” Sanofi said.

Ponte’s suit, filed in New Jersey Superior Court in Newark, names as defendants Sanofi, Viehbacher, Sanofi General Counsel Robert DeBerardine and other executives, including Sanofi’s former vice president of its U.S. diabetes business, Dennis Urbaniak, and the ex-assistant vice president of special projects, Raymond Godleski.

“It’s shocking that these people got away with this for so long and then fired this woman for uncovering their wrongdoing,” said Rosemarie Arnold, lawyer for the 53-year-old Ponte. “She was blatantly fired as a result of her whistleblowing activity.”

Hostile work environment alleged

The suit says Sanofi and its managers created a hostile work environment for Ponte after she made her allegations of wrongdoing and created a pretext for her dismissal in September.

The suit said Ponte became aware of the alleged diabetes drug scheme in March 2013, when she received electronic requests for her approval of nine Sanofi contracts worth a total of $34 million—seven contracts with the consulting firm Accenture, and two with the professional services firm Deloitte. Ponte, a 13-year Sanofi veteran, at the time was working in the company’s U.S.headquarters in Bridgewater, New Jersey, in the contracts group, where she was responsible for reviewing contracts.

Views from the cafe-pharma GSK board below:


GlaxoSmithKline Anonymous board for GlaxoSmithKline

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Old 12-04-2014, 10:44 PM

Posts: n/a
Default Viehbacher may not be GSK’s White Knight
If there is any truth to these allegations, Viehbacher may not be as available as he seems:

“A new lawsuit claims the recently ousted CEO of Sanofi and other executives at the huge drugmaker conducted a scheme in violation of federal law to funnel tens of millions of dollars in kickbacks and other incentives to get the company’s diabetes drugs prescribed and sold.”

Old 12-05-2014, 06:53 AM

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Default Re: Viehbacher may not be GSK’s White Knight
Interesting post. If true, CV is yet another executive fraudster among a growing list.
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Old 12-05-2014, 06:58 AM

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Default Re: Viehbacher may not be GSK’s White Knight
[quote=Anonymous;5289428]If there is any truth to these allegations, Viehbacher may not be as available as he seems:

“A new lawsuit claims the recently ousted CEO of Sanofi and other executives at the huge drugmaker conducted a scheme in violation of federal law to funnel tens of millions of dollars in kickbacks and other incentives to get the company’s diabetes drugs prescribed and sold.”

This is from one disgruntled employee. Go back to re posting something useful
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Old 12-05-2014, 08:51 AM

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Default Re: Viehbacher may not be GSK’s White Knight
Disgruntled does not necessarily mean wrong. The 2 guys from GSK who were whistleblowers were disgruntled as well, but they weren’t wrong.

Let the courts decide.
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Old 12-05-2014, 08:17 PM

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Default Re: Viehbacher may not be GSK’s White Knight
She also claims about $1 billion is missing! That part should be proved/disproved fairly quickly. This isn’t the Pentagon, Sanofi’s accountants must have records somewhere.
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Old 12-11-2014, 08:12 PM

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Default Re: Viehbacher may not be GSK’s White Knight
We could use the $ 1b
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Old 12-12-2014, 05:26 PM

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Default Re: Viehbacher may not be GSK’s White Knight
“White Knight?!” You racist
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Old 12-13-2014, 05:26 AM

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Default Re: Viehbacher may not be GSK’s White Knight
Vie archer is impressive his lack of a morale code have now started a path of destruction at 2 companies.
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Old 12-13-2014, 09:24 AM

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Default Re: Viehbacher may not be GSK’s White Knight
Transparency. Respect for People. Integrity. Patient Focused. Maybe not.
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Old 12-13-2014, 01:54 PM

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Default Re: Viehbacher may not be GSK’s White Knight
Originally Posted by Anonymous View Post
Transparency. Respect for People. Integrity. Patient Focused. Maybe not.
This guy was hip deep in the fraud at GSK TOO. Just look at the Lauren Stevens trial transcripts and you will know. He belongs in Prison.

Old 12-13-2014, 02:04 PM

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Default Re: Viehbacher may not be GSK’s White Knight
Ultimately he is as responsible for PF as anyone else.
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Old 12-14-2014, 08:39 AM

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Default Re: Viehbacher may not be GSK’s White Knight
Just keeps getting better
Sanofi Is Accused of Using Kickbacks to Encourage Prescribing Diabetes Drugs

According to the complaint, on October 29, 2014, shares of Sanofi fell $2.85 or almost 6% to close at $45.22 on the news of the termination of Chief Executive Officer, Christopher A. Viehbacher. On December 3, 2014, it was reported by various media outlets that a whistleblower lawsuit had been filed by a former Sanofi paralegal. This suit alleges that Viehbacher, along with other executives, violated federal law by funneling tens of millions of dollars in kickbacks and incentives to get the company’s diabetes drugs prescribed and sold. This lawsuit also alleges that Viehbacher was dismissed due to his involvement in the illegal activities, such as kickbacks and incentives, which went on for many years.

The complaint also alleges that Sanofi: (i) was making improper payments to healthcare professionals in connection with the sale of pharmaceutical products in violation of federal law; (ii) lacked adequate internal controls over financial reporting; and (iii) as a result, the company’s public statements were materially false and misleading at all relevant times.
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Old 12-15-2014, 11:46 AM

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Default Re: Viehbacher may not be GSK’s White Knight
Originally Posted by Anonymous View Post
Just keeps getting better
Sanofi Is Accused of Using Kickbacks to Encourage Prescribing Diabetes Drugs

According to the complaint, on October 29, 2014, shares of Sanofi fell $2.85 or almost 6% to close at $45.22 on the news of the termination of Chief Executive Officer, Christopher A. Viehbacher. On December 3, 2014, it was reported by various media outlets that a whistleblower lawsuit had been filed by a former Sanofi paralegal. This suit alleges that Viehbacher, along with other executives, violated federal law by funneling tens of millions of dollars in kickbacks and incentives to get the company’s diabetes drugs prescribed and sold. This lawsuit also alleges that Viehbacher was dismissed due to his involvement in the illegal activities, such as kickbacks and incentives, which went on for many years.

The complaint also alleges that Sanofi: (i) was making improper payments to healthcare professionals in connection with the sale of pharmaceutical products in violation of federal law; (ii) lacked adequate internal controls over financial reporting; and (iii) as a result, the company’s public statements were materially false and misleading at all relevant times.
who cares, go to the Sanofi thread. we have enough problems with our own leadership

Revisiting The GSK Chinese Corruption Scandal…

Taken From:

GAB | The Global Anticorruption Blog

Law, Social Science, and Policy


Prosecuting GSK: How to Deal with Being Second in Line

As followers of the anticorruption blogosphere know, China recently fined British pharmaceutical giant GlaxoSmithKline (“GSK”) $490 million for bribing Chinese doctors and hospital administrators. There is no need rehash here what many others have already said: this case is likely a watershed moment marking China’s emergence as a force in the global fight against corruption.

But there is another aspect of the story that has gone unnoticed: With rare exceptions, the U.S. Government’s corporate FCPA settlements have either preceded any foreign enforcement action (e.g., Total) or been announced as part of a coordinated global settlement (e.g., Siemens). But China’s prosecution of GSK has put U.S. regulators in a relatively unfamiliar position: that of the second mover. And in doing so, China has forced the Department of Justice to confront a difficult question: Should it care that China has already fined GSK for the same conduct that DOJ is investigating.

Because the United States does not recognize international double jeopardy, China’s action poses no legal obstacle to an FCPA prosecution. In fact, the only legal obligation imposed on U.S. authorities as a result of China’s prosecution derives not from domestic law but from the UN Convention Against Corruption (UNCAC) art. 42(5) and OECD Anti-Bribery Convention art. 4.3. But these sections only require the United States to consult with China regarding the two nations’ overlapping investigations, and even then, only “as appropriate.”

Nevertheless, it’s a safe bet that when it comes time to resolve the GSK matter, DOJ will (1) consider the impact of the prior Chinese penalty and (2) soften its settlement terms as a result. How do we know that? Well, to start, the U.S. Attorney’s Manual — in two relevant provisions (here and here) — advises federal prosecutors to consider the effect of another jurisdiction’s (realized or potential) prosecution when deciding whether it is necessary to charge a particular target. More importantly, though, whether we are speaking of the rare FCPA case where DOJ was the second mover (e.g., Statoil or Alcatel-Lucent) or the many instances where DOJ resolved an investigation as part of a global settlement (e.g., Siemens), on several occasions DOJ seems to have adjusted its settlement demands in order to accommodate penalties exacted by foreign enforcers.

But even if DOJ has done this sort of thing in the past, it’s worth considering why it makes sense to do it again here. After all, the GSK case is a world apart from the Statoil or Alcatel-Lucent resolutions, which followed foreign settlements totaling only a few million dollars. And unlike massive global settlements like Siemens, there was — perhaps unsurprisingly — no coordination here between U.S. and Chinese enforcers.

Stepping back, there are a few reasons to believe DOJ both will and should stick to its past practice and lower its settlement demands even in a case like GSK:

  1. Doing so may encourage additional demand-side prosecutions:  For years, the anticorruption world has decried the lack of demand-side enforcement. (This blog being no exception.) The good news is that a policy of accommodating foreign penalties may help address the problem, even if only marginally and only in the long term. This practice shows respect for a demand-side nation’s sovereignty and its interest in redressing harm caused to it by the defendant’s bribery. Furthermore, a regular and open practice of deference to foreign actions will encourage goodwill between demand- and supply-side authorities, possibly leading to greater coordination of future investigations. (If demand-side officials believe they’ll be afforded their due at the bargaining table, they may be more willing to cooperate with foreign authorities in the future.) Lastly, companies are more likely to cooperative with demand-side investigations when they know that any associated penalty will be taken into account in future supply-side settlement negotiations.
  2. Such reductions may be necessary to avoid overdeterrence:  While many of us would like to stamp out transnational bribery, there is a theoretical point at which enforcement penalties become so high as to pressure companies into taking inefficient precautions (or avoiding certain high-risk markets altogether). To the extent we care about cost-effective responses to corruption, the prospect of overdeterrence is worrisome. Keeping that concern in mind, one could argue that over the past few decades — an era in which U.S. enforcement was the only big game in town — FCPA penalties were inflated to account for harm done to both supply- and demand-side countries. If that’s true, then it makes sense to reduce penalties in FCPA cases that follow (e.g., GSK) or foreseeably precede (e.g., Akzo Nobel) demand-side prosecutions in order to avoid cumulative penalties disproportionate to the underlying conduct.
  3. In some cases, DOJ won’t have a choice:  At the end of the day, there are going to be some companies (e.g., Innospec) who would fold under the financial pressure of successive penalties for the same underlying bribery conduct. It’s not a stretch to say that in a post-Arthur Andersen world, that is an outcome rarely desired by prosecutors. Sure, there are closely-held corporations who will not survive FCPA prosecutions (e.g., Nexus), but more often DOJ officials will treat the policy requirement that they weigh the collateral consequences of initiating a corporate prosecution as reason not to push the boundaries of the defendant’s financial well-being. And even with a company as large as GSK, half of a billion dollars may be a penalty large enough to make DOJ officials worry about not pushing the business too far towards the financial breaking point.

At the end of the day, I wouldn’t be surprised if DOJ’s FCPA prosecutors never quite adjust to the prospect of being second-in-line. But for the health of the global effort to combat transnational bribery — and the reasons given above — it might be best for DOJ to get used to that position. I’ve got my fingers crossed, after all, that GSK is just the latest sign of a growing phenomenon: that of demand-side countries charging forward with their own enforcement actions, even before supply-side countries can do the same.

  • Interesting arguments. Is the Chinese subsidiary of GSK actually registered and trading on the US stock exchange, or is it the parent company; and is this or should it be relevant to the possibility of the same action being taken in multiple jurisdictions? In the case of this British company, what, if anything, would inhibit the UK from filing against this company for the same events pursuant to the UK Antibribery law? In this same line of thought, we have not only the risk of multinational companies being fined in two, but three or as many countries as may have similar antibribery laws and registered stock, which may or may not take such multiple fines into consideration depending upon their particular laws, jurisprudence and customs. Perhaps the time is coming near for a review of the reach of the FCPA.

    • I believe the US is asserting FCPA jurisdiction over GSK on the basis of its status as an issuer on a US exchange. I also believe that you are correct that, under the UK Bribery Act, the UK would also have jurisdiction, though the UK (unlike the US) recognizes the principle of international double jeopardy (ne bis in idem), and so wouldn’t be able to bring a prosecution after a US settlement, and is probably already barred from doing so by the Chinese settlement. (It’s possible I’m wrong, as I’m not an expert in this feature of British law, but I think that’s the case.)

      Your more general observation seems to me to be correct: We’re moving into a world in which multiple sovereigns may have jurisdiction to bring corruption charges against the same entities for the same underlying conduct: If a Korean subsidiary of a British company listed on the New York Stock Exchange pays bribes in China, then four country’s laws have been simultaneously violated, and in principle any of the four, or some combination, might be able to pursue criminal enforcement actions.

      I’m not sure I agree with your last sentence, though. I think it would be a mistake to narrow the reach of the FCPA, both because it remains by far the most robust and effective law against transnational bribery, and because if a foreign company avails itself of US securities markets or territory, than the US has every right to impose and enforce legal restrictions on that firm’s conduct. Rather than narrowing the scope of the law, I’d be more inclined to deal with the problem — as Jordan suggests — through formal or informal agreements between the DOJ/SEC and other countries’ law enforcement agencies about which country or countries should take the lead in which prosecutions, and how they should coordinate.

  • Great analysis (and comment). I’m going beyond the scope of your post here but, to pick up on something you touched upon briefly, one way for DOJ prosecutors to avoid being second-in-line is to coordinate investigations. There are obvious benefits to global coordination on actions against cross-border crime like bribery and a number of law firms have flagged the huge growth potential for such cooperation. In the GSK case, for instance, the SFO worked closely with Chinese authorities for the first time.

    For a variety of reasons, collaborating with demand-side jurisdictions seems markedly different from working alongside other supply-side authorities (although, if the Chinese government is serious about its anti-corruption campaign, maybe not as different as it first appears). At any rate, I don’t see Chinese and U.S. prosecutors cozying up to each other anytime soon.

    But, particularly given the likelihood that Chinese enforcement is on the rise, what do you think of the prospects for increased investigation and settlement coordination between the U.S. and China?

    • Absolutely, coordinated enforcement is the way to go in most of these cases. The cooperation between the US and German authorities in the Siemens case is a great example.

      The problem, as I understand it, in the GSK case is precisely the lack of coordination — due in part to lack of familiarity and lack of trust — between the Chinese and US authorities. (I don’t have a public source for this, but I’ve had informal conversations with lawyers on both the US and Chinese side about this, and they all made more or less that claim.) That’s not to say that this issue is unique to China, but I think it’s likely to be especially acute in that case. But your note about the degree of cooperation between the Chinese authorities and the SFO — which is something I wasn’t aware of — is perhaps encouraging.

  • This is a pretty basic question–just informational–but in relation to your first point and your references to fostering good will and demonstrating respect, is there a sense among demand-side countries that they would prefer the U.S. NOT prosecute for conduct for which the demand-side country has already secured a conviction? Assuming they’ve already received the fine they’ve assessed/been able to enact the punishment they’ve decided on, do they care what the U.S. does? If so, why? From their perspective, is it a matter of being afraid that the U.S. will (as you allude to in your third point) assess a penalty that causes the company to fold and not be able to pay the demand-side country? Just a philosophical matter of it seeming that the U.S. doesn’t view their legal decision as “real” enough to prevent further prosecution (i.e., basically objecting to the U.S. choice not to recognize international double jeopardy)?

GSK Now Investigating Corruption In United Arab Emirates (UAE)


(Reuters) – Drugmaker GlaxoSmithKline, which was slapped with a record $489 million fine for corruption in China last month, said on Tuesday it was looking into allegations of corruption in the United Arab Emirates.

Britain’s biggest pharmaceuticals group confirmed the investigation following allegations of improper payments set out in a whistleblower’s email sent to its top management on Monday. The email, purporting to be from a GSK sales manager in the Gulf state, was seen by Reuters.

The company is already investigating alleged bribery in a number of Middle East countries, including Lebanon, Jordan, Syria and Iraq, as well as Poland.

“As we have already said, we are undertaking an investigation into our operations in the Middle East following complaints made previously. This investigation continues and these specific claims were already being investigated as part of this process,” a GSK spokesman said.

GSK and other major drugmakers are under increased scrutiny in the wake of the high-profile Chinese case and law enforcement agencies in both the United States and Britain are clamping down on overseas corruption by multinational companies.

The China scandal has hit GSK’s drug sales in the country and tarnished the reputation of Chief Executive Andrew Witty.

Other pharmaceutical companies, too, are in the firing line for alleged improper sales behavior.

France’s Sanofi said on Monday it had informed U.S. authorities of allegations of improper payments by its employees to healthcare professionals in East Africa and the Middle East.

Novartis, meanwhile, has been ordered to face a U.S. government lawsuit accusing the Swiss drugmaker of paying multimillion-dollar kickbacks.

And two women in Poland have pleaded guilty to bribery in another case involving an unnamed company.

In the case involving GSK’s practices in the UAE, the anonymous author of the email claimed that the British company made direct payments to healthcare professionals, hospitals, clinics and pharmacies to secure business.

This included payments for educational meetings — regardless of whether or not they took place — as well as schemes to pay customers for taking prescription drugs by giving them bonus over-the-counter products, the author said.

“We have zero tolerance for unethical behavior and we welcome people speaking up if they have concerns about alleged misconduct. We are committed to taking any disciplinary actions resulting from the findings,” the GSK spokesman said.