Home > Blog > Real Change Coming To Glaxosmithkline?

This year, pharmaceutical giant GlaxoSmithKline pled guilty to criminal charges and was fined $3 billion for promoting its anti-depressants for unapproved uses and failing to report safety data about a top diabetes drug.

Because these misdeeds sound almost void of any real wrongdoing, allow us to provide you with an example of GSK’s misbehavior so that you can judge the human impact of their actions for yourself:  The anti-depressant Paxil was not approved for patients under 18.  In addition, three separate trials revealed that the drug was not any more effective in treating depression than placebo.  The studies also revealed serious safety issues with the drug when used in children.  Another study revealed that teens who took the drug were more likely to attempt suicide.  Despite this, GSK misrepresented this data and published an article reporting that Paxil was an effective treatment for depression in children.

Time Magazine reported that GSK went above and beyond to convince doctors to prescribe it to children: “Sales reps invited prescribing psychiatrists to luxury resorts for “Paxil forum meetings” where they were treated to fancy dinners and free entertainment like sailing trips and balloon rides.”

A number of teens have committed suicide as a result of GSK’s greed and willingness to put profits over safety.

At a conference this week, GSK North America President Dierdre Connelly addressed these issues and discussed the ways that the drug giant is attempting to atone for its wrongdoing.  First, she acknowledged that the incentives for pharmaceutical reps were completely ill-placed.  Under the old system, bonuses depended on prescription volume.  This gave reps a major incentive to try and convince doctors to prescribe their drugs for any conceivable reason, whether approved or not.  With only one motivation in mind, drug reps could easily put any safety concerns out of their minds and focus only on numbers.

Now GSK has moved to a system in which yes, a representative’s ability to convince a doctor to prescribe is still important, but product knowledge and other basic selling skills are also taken into account.  She also pointed to the move towards making financial incentives to doctors’ public information.

But Connelly did not stop there.  She made it clear that she was offended by the notion that drug companies have now worked these fines and penalties into their business models, and will continue with business as usual.  While she might have every good intention to help bring about positive change, it isn’t hard to see where this cynicism comes from.  Consider this math: The $3 billion settlement encompassed 6 drugs over 10 years.  The amount of money these drugs brought in over this same time period was $27.9 billion.  GSK’s profits were still far outweighed by the fines they had to pay.

Also consider the fact that practically every major pharmaceutical company has been accused time and time again of such blatant wrongdoing, resulting in major harm to patients.  Merck, Johnson & Johnson, Pfizer, Boehringer Ingelheim, Abbott Laboratories: every one of these drug giants have been accused and fined for similar acts.  Is it any surprise that the public might need to see a change to believe it?

In Connelly’s words: “I reject that argument,” Connelly said. “Fines and settlements do matter. They reduce the funds our industry has available for investment into research for new medicines and vaccines to help patients. … Our settlement also wiped out an amount equal to one full quarter of profits. … It damaged our reputation and it hurt our morale.”

She goes on to say, “If we have leaders in our business who are only motivated to do the right thing by fear of punishment or prison, then we don’t have the right leaders…We are all responsible for making sure that people with the wrong values and motivations find another line of work.”

We couldn’t agree more, but it is going to take more than a self-righteous speech to convince us that real change is on the horizon.

Last point: we might be more likely to believe in Connelly’s intentions had all this positive change not been a part of a mandatory Corporate Integrity Agreement (CIA) that GSK had to sign in order to resolve its settlement.  According to the DOJ, “the plea agreement and CIA include novel provisions that require GSK implement and/or maintain major changes to the way it does business, including changing the way its sales force is compensated to remove compensation based on sales goals for territories, one of the driving forces behind much of the conduct at issue in this matter.”

So the very behavior that Connelly is touting as revolutionary and inspiring was mandated by the government.  Perhaps Connelly would label us cynics, but we still think the pharmaceutical industry has a long way to go.

Sources and Further Reading: