The long road back for GlaxoSmithKline

Last week brought closure to another chapter in the GlaxoSmithKline case. Without admitting wrongdoing, the British drug manufacturer agreed to pay the state of West Virginia $22 million to settle a lawsuit accusing the company of illegally promoting its Avandia (Rosiglitazone) diabetes medicine.

This case made headlines in 2012 when the global healthcare titan pleaded guilty to three criminal counts and agreed to repay $3 billion to resolve liability stemming from illegal promotion of prescription drugs, failure to report safety data and alleged false pricing, according to the U.S. Department of Justice. The settlement included a criminal fine of more than $900,000 and a $2 billion payment to resolve civil claims under the False Claims Act. This was one of the largest healthcare fraud settlements in American history.

Avandia was an epic success for GSK. Once the world's bestselling diabetes drug, it produced $3 billion in sales, The Charleston Gazette noted.

GSK marketed Avandia as a medicine that would lower patients' blood sugar and decrease risk of cardiac problems even though using the drug was linked to increased risks of congestive heart failure and heart attacks. The company suppressed safety concerns voiced by doctors about the drug, as FierceHealthcare reported. And GSK promoted Avandia with misleading statements about its safety profile, prosecutors alleged.

The government also accused GSK of omitting safety data on Avandia in its reports to the U.S. Food and Drug Administration that would help the agency determine if the drug was still safe for its approved uses.

Avandia was pulled off the market in Europe, and its sale is now restricted in the United States, The Gazette reported. A black box warning on Avandia's label discloses potential drug risks.

Besides the West Virginia settlement, GSK paid more than $700 million as a result of patients' lawsuits.

The GSK case shows that when telling the complete truth in the interests of public safety takes a back seat to profits or speed-to-market, the fallout is huge. That's not news. From lawsuits against businesses as diverse as automobile and medical device manufacturers, this message sounds: Companies can't hide the downsides of their products forever. When will organizations learn that?

I'm also struck by terms of GSK's corporate integrity agreement with the government. Specifically, the company must recover bonuses and other incentives from executives if they (or people in their down lines) "engage in significant misconduct," the announcement stated. And GSK must "implement and maintain transparency in its research practices and publication policies and follow specified policies in its contracts with various health payers." These are basic ethics and compliance practices GSK should have followed all along. It's telling that they didn't.

GSK CEO Sir Andrew Witty said in a statement that the organization's mistakes "originated in a different era for the company." Here's hoping the tone at the top has changed, that employees receive new messages about what is and isn't acceptable conduct in GSK's corporate culture.

But besides watching their own houses, pharmaceutical manufacturers also must navigate an imperfect healthcare system. GSK's case is a chilling commentary on that. When large players with big bankrolls decide to break the rules and take what penalties may come as an acceptable cost of doing business, then the healthcare system has the wrong incentives in place. - Jane (@HealthPayer)

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