GlaxoSmithKline Plc has agreed to plead guilty to misdemeanor criminal charges and pay $3 billion to settle the largest case of healthcare fraud in U.S. history.
The settlement includes $1 billion in criminal fines and $2 billion in civil fines in connection with the sale of the drug company’s Paxil, Wellbutrin and Avandia products, according to filings in federal court on Monday.
Lauren Stevens, the Glaxo associate general counsel, who is charged with one count of obstructing an official proceeding, one count of falsifying documents before a federal agency and four counts of making false statements to the FDA, has heard evidence given to a jury by James Millar, GSK vice president of strategic pricing, contracting and marketing. Millar had originally refused to testify but prosecutors persuaded the US District Judge [Roger W. Titus] to order him to give his testimony.
When Daniel Carlat, a psychiatrist in Massachusetts, was flown to New York with his wife by Wyeth, the “training” weekend he attended in a luxury hotel was topped off with a Broadway show. It was early 2001 and he had just agreed to the US pharmaceuticals company’s proposal that he give talks to doctors about its antidepressant Effexor. During the following year, he was regularly paid fees of $750 a time to drive to “lunch and learn” sessions where he would speak for 10 minutes to emphasise the drug’s advantages to fellow doctors, using slides prepared by the company. “It seemed like a win-win,” he recalls. “I was prescribing it, educating doctors and making some money.” But within a few months, he became disillusioned with his co-option as a marketing representative. He was selectively presenting clinical data that put the drug in a positive light to physicians who had been targeted by the company through “data mining” techniques that identified their individual prescription patterns.Dr Carlat has spoken out as part of a growing backlash against such aggressive marketing tactics, which are leading to significant changes in the relationship between doctors and drug companies. But even as pharmaceuticals executives argue that such problems belong to the past and were always exaggerated, they are bracing for both intensifying penalties and calls for further reform.
Former GSK counsel is the first target in government’s executive-liability crackdown. Could J&J be next? The US Department of Justice filed criminal charges last week against Lauren Stevens, a former VP and assistant general counsel at GlaxoSmithKline. Going after pharma execs marks a seismic shift in the government’s efforts to stem the tide of fraud and other illegal pharma marketing practices, which a raft of billion-dollar settlements have so far failed to end. Stevens is charged with obstruction of an investigation, concealment and falsification of documents, and making false statements to the FDA in its 2002 investigation of off-label promotion of the antidepressant Wellbutrin for weight loss, an indication for which it has never been approved but has shown some clinical benefit. The DoJ says that it has evidence, in the vast paper and electronic documentation turned over by GSK, showing that Stevens hid and otherwise misled the agency about some 1,000 instances of GSK-paid doctors promoting Wellbutrin for weight loss to other doctors.
The American Psychiatric Association, in its 240 page guide to its May annual meeting, “forgot” to mention the conflicts of interest of its own president Alan Schatzberg, MD. It had to print them on the newsletter circulated the third day of the meeting. Nor were names even alphabetized for easy information retrieval. (Schatzberg is financially linked to Eli Lilly, GSK, Merck, Pfizer, Forest, Takeda, Sanofi-Aventis and eight other companies.)