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Glaxo Settlement Pulls Back Curtain On Drug Marketing

Filed by KOSU News in Business.
July 3, 2012

As part of a landmark $3 billion settlement of health fraud charges by GlaxoSmithKline, the government released a slew of documents that serve as a one-stop guide to alleged sales practices that ran rampant for years.

The British drugmaker agreed to plead guilty to three misdemeanor charges. But the settlement of civil claims, Glaxo said in a statement, “does not constitute an admission of any liability or wrongdoing in the selling and marketing of Lamictal, Zofran, Imitrex, Lotronex, Flovent, Valtrex, Avandia or Advair products.”

Glaxo CEO Sir Andrew Witty said in a statement that the practices “originate in a different era for the company” and that it has turned over a new leaf.

Still, the old leaf, as described in the Justice Department’s complaint and other documents, has some alleged doozies. Here are a few.

Take, for instance, Glaxo’s alleged hiring of celebrity doctor Drew Pinsky through a PR firm to talk up the unproven use of the antidepressant Wellbutrin SR as a remedy for sexual dysfunction. The government’s complaint says the company indirectly paid him $275,000 in 1999 for that work, some of which is described in this memo and a transcript from a radio interview that year.

If you’ve never been to a pharmaceutical sales meeting, the documents offer you the next best thing. The government alleged that Glaxo promoted Advair, an asthma remedy combining two drugs, for use as a first-choice treatment for just about anybody with asthma. The Food and Drug Administration, concerned about risks, took a much narrower view and approved Advair only as a first-line therapy for patients with severe asthma.

That didn’t stop Glaxo, according to the complaint. The company’s CEO at the time, J.P. Garnier, allegedly told sales reps at a launch meeting held in Las Vegas in 2001 about a conversation he’d had with a doctor about Advair:

“[H]e said, and you can quote him everywhere you want in the [United States], ‘He said it would be criminal not to put an asthmatic patient on Advair’ It would be criminal.”

And later in the complaint, the government alleges that Glaxo paid kickbacks in the form of gifts, consulting and speaking fees, entertainment and a whole lot more. One exhibit to the complaint explains how drug reps in New England could get tickets to sporting events for meetings with doctors.

Some of these alleged activities wouldn’t pass muster with the drug industry’s voluntary code for company’s dealings with doctors. But the Glaxo settlement and other similar ones agreed to by large drugmakers suggest marketing excesses were pervasive.

Only last year, Deirdre Connelly, Glaxo’s U.S. president, said publicly that the drug industry had “lost its way.” She faulted a “competitive selling model” that is fine for cars or candy, but just isn’t appropriate for prescription medicines. Change is needed, she said, and a big one at Glaxo was to eliminate bonuses for sales reps based on increases in prescriptions for their territories. [Copyright 2012 National Public Radio]

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