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Delayed justice? Buried news? GlaxoSmithKline’s $3 billion fraud settlement

In high tech, I served many pharmaceutical customers.

Some were far more ethical than others.

Sometimes, a story comes along that reminds me of George Carlin‘s statement that “business ethics” is an oxymoron.

Tonight, I went looking for a story that I had seen on CNN today about GlaxoSmithKline being slapped (gently, on the wrist, given the sales of the drugs involved in the U.S. ALONE!) with a $3 billion fine by the U.S. Department of Justice after failing to report safety data on some of the company’s most popular drugs. This is the largest payment EVER by a drug company. The first $1 billion went to settle CRIMINAL wrongdoings, and the other $2 billion went to cover CIVIL liabilities. GlaxoSmithKline said that the settlement will be funded through existing cash resources.

Nice to have that kind of cash just sitting around…. Just a small cost of doing business….

SURELY, I would find this story prominently on the CNN site of the U.S. edition, after all these elapsed hours. Nope! What about buried in the “business” or “health” columns? Nope! What in the heck is going on?

Finally, I did a search and found the article.

So, what did GlaxoSmithKline do that was so particularly evil? According to the aricle:

GlaxoSmithKline (GSK) will plead guilty to two counts of introducing misbranded drugs, Paxil and Wellbutrin, into interstate commerce.

Specifically, the government alleged that the drugs were marketed as a treatment for conditions for which they had not been approved. It said Paxil, which treats depressive and anxiety disorders in adults, was marketed to children and adolescents, and Wellbutrin, an antidepressant, was marketed as a weight-loss aid. <emphasis mine>

A third count involves a failure to report safety data about the drug Avandia, a diabetes drug, to the Food and Drug Administration between 2001 and 2007.

Besides selling adult antidepressants to give to kids, GlaxoSmithKline allegedly kicked back money, trips, and concert tickets to doctors who prescribed their drugs. CNN’s TV commentators noted that investigators charged that GlaxoSmithKline’s abuses were not “spotty” but systemic in the corporation – fraud as a means of doing business.  I found this paragraph in the buried CNN article particularly “funny” ( in a “dark-humor-sort-of-way”):

In addition to the criminal and civil resolutions, GlaxoSmithKline has reached a 5-year compliance agreement with the Department of Health and Human Services. Under terms of the deal, according to department Inspector General Daniel R. Levinson, company executives could forfeit annual bonuses if they or their subordinates engage in significant misconduct, and sales agents are now being paid based on quality of service rather than sales targets. <emphasis mine>

OK, those of you who have worked for a “for-profit” company – when was the last time that you heard of sales agents NOT being paid on the basis of sales targets? Who in the heck do they think that they are fooling? Quality of service is for Service people. Sales is about hitting and exceeding targets.

“On behalf of GSK, I want to express our regret and reiterate that we have learnt from the mistakes that were made,” CEO Andrew Witty said in a statement, adding that the company has changed its procedures for compliance, marketing and selling since the incidents.

But likely not the personality types of its staff… :-)

The history of GlaxoSmithKline shows the coalescence so common in pharmaceutical companies, banks, and telecommunications companies. In 2000, Glaxo Wellcome and SmithKline Beecham merged to form GlaxoSmithKline. I remember SmithKline Beecham scientists as nice folks whom its Information Systems people were trying to deprive of their Macintoshes. Scientists responded by bringing in their PERSONAL Macintoshes from home and “localtalking” (look it up! :-) ) them together in the days before widespread fast ethernet and TCP/IP. Scientists are creative professionals and, frankly, a lot (but not all) of systems people are not. (When I worked for VeriSign [hacked repeatedly in 2010 after I left in 2007], all of the people in my group used Windows XP at work [not by choice], but had Macintoshes at home, except for the manager. :-) Intelligence SINKS in most corporations.)

The Glaxo people were a different breed, even before they merged with Burroughs Wellcome in 1995 to become GlaxoWellcome. Glaxo people always had that bullying demeanor and irritating whine indicative of a company that had cloned too many Myers-Briggs _NTJ (1, 2) personality types. :-) They were the kind of folks who you hoped would try to push around the wrong person in a country bar. 😉 The company that I worked for at the time had made the same “cloning error,” as confirmed by actual Myer-Briggs testing of management.

Personally, I am happy to see that even an anemic Karma operates with drug companies.

As for CNN, I hope that it develops the cahones to splash the article on its front Web page. Evil has to be recognized to be combated, and journalists have that responsibility.

(Note added July 3, 2010: Well it looks like CNN did not grow the cahones today – maybe it plans to wait until the storm blows over. After all, human beings have pretty limited memories and attention spans.)

(Note added July4, 2010: A link in the Health section of the CNN U.S. Edition main page today says “Drug company paying $3 billion” and links to a video. A pretty anemic and vague description, two days after the story broke…. I am not sure why.)

-Bill at

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