The Gary Null Blog

by Gary Null, Ph.D. and Nancy Ashley, VMD

Part I – GlaxoSmithKline

You would have thought the way the stock price rose on Monday, July 2, 2012, that good news had been reported about British company GlaxoSmithKline instead of the announcement that the company had agreed to plead guilty to misdemeanor charges and pay a $3 billion criminal settlement to settle the largest case of healthcare fraud in U.S. history. In fact, the settlement was previously disclosed by GSK to its shareholders and was at least $150 million lower than expected. Not only is this a relatively paltry sum for a company which brings in $45 billion a year in revenue, but it essentially allows Glaxo to be absolved of its many crimes, and the injuries and deaths resulting from its dangerous pharmaceuticals over the past decade. It used to be that in most cases, a fraud settlement of more than a billion dollars would destroy a company. But as we have repeatedly seen over the years, this is just a regular cost of doing business for the pharmaceutical industry. Ultimately, this $3 billion fine is just a line item on GSK’s balance sheet.

The settlement, which breaks the previous record of $2.3 billion set by Pfizer in 2009, is nothing new for GlaxoSmithKline. According to a 2010 report by Public Citizen, since 1991 – around the same time as the infamous Prescription Drug User Fee Act (PDUFA) allowed drug companies to buy approval from the FDA — GSK has had to pay more in fines and settlements to the federal and state governments than any other pharmaceutical company: a total of $4.5 billion not counting this week’s $3 billion.

So what misdemeanors did Glaxo agree to plead guilty to?

Avandia – Failing to disclose safety data: fine $243 million

Glaxo brought Avandia (rostiglitazone) to market in May 1999 amid great fanfare, and it quickly became the best-selling diabetes drug in the world. There were signs early on that Avandia caused a significant increase in heart attacks, however, which were ignored and denied by the company and the FDA. In the settlement, Glaxo was charged with failing to disclose the results of studies between 2001-2007 showing the increased risk of heart attack and death from Avandia. Additionally, Avandia has been linked to stroke, hepatotoxicity, bone fractures, and blindness. Nevertheless, because of aggressive marketing to medical professionals and clients alike, and despite the fact that reports of injury and death were hitting the mainstream media by 2007, sales of Avandia still topped $1.2 billion as late as 2009. The drug was completely taken off the market in Europe in 2010. Senators Grassley and Baucus tried to get the drug taken off the US market starting in 2008, but they were unsuccessful, despite the fact that the report they issued revealed that Avandia caused 500 unnecessary heart attacks a month in the US! The FDA held firm in their support of Avandia and GlaxoSmithKline even in the face of conflict of interest charges in the panel members who voted in favor of it. Currently the use of Avandia in the US is restricted to those already using the drug, and it remains available to them despite the risks and despite the fact that there are dozens of similar drugs available.

Paxil and Wellbutrin – Introducing Misbranded Drugs into Interstate Commerce (Marketing antidepressants for unapproved uses): Fine $757 million

Paxil, (paroxetine) a selective serotonin reuptake inhibitor (SSRI) made by Glaxo’s predecessor, SmithKline Beecham (SKB), was approved for adult depression in 1992. Shortly thereafter, SKB started a multi-site study of Paxil for use in adolescent major depression. Study 392, which ended in 1997, showed that there was no significant difference between Paxil and placebo on ANY of the eight pre-specified outcome measures.⁷ It showed further that Paxil caused increased risk of suicide, self-harming behavior, and harm to others in the adolescents who took it, even as much as one single dose in certain susceptible individuals. The company, instead of taking any steps to protect consumers, decided to manage the negative results by ignoring unfavorable data and presenting fabricated positive results instead through a ghostwritten article published in 2001 in the prestigious Journal of the American Academy of Child and Adolescent Psychiatry. SmithKlineBeecham decided that this was the best strategy to minimize any potential negative commercial impact, according to an internal document. On the strength of selectively reporting the evidence of study 329 in the JAACAP article, doctors began prescribing Paxil widely for adolescents, even though the FDA had never approved the drug for this purpose. It wasn’t long, however, before the drastic increase in suicides among adolescents taking Paxil became obvious. On June 10, 2003, the British medical authorities took decisive action and banned the use of Paxil in adolescents.¹³ Our own FDA, however, was less concerned, and added a black box warning advising of the risk of suicide in adolescents taking Paxil without banning the drug.¹⁴