Jul 03 2012

GSK Pays $3 Billion Fine

The pharmaceutical giant, GlaxoSmithKline, has agreed to pay three billion dollars in fines to settle three charges of fraud brought by the FDA. This is the largest health fraud settlement in US history. What are the implications of this settlement for how the pharmaceutical industry is regulated in the US and for the role that “Big Pharma” allegedly plays in US health care?

The three fraud charges admitted to by GSK include promoting the off-label use of two anti-depressant drugs – Paxil and Wellbutrin. In the US drugs are approved for specific indications, and they can only be marketed for those indications. So-called off-label use of drugs, however, is very common. Off-label does not necessarily equate to bad medicine, or to lack of scientific evidence or rationale. Often there is solid basic science and clinical evidence to support a specific use of a drug that is not approved by the FDA. That simply means the manufacturer did not apply to the FDA for that indication, which could simply be because they did not feel they would recoup the millions of dollars they would need to spend to get approval for the additional indication. In other words, FDA approval for secondary indications is as much about marketing and finance as it is about the science.

Regardless of whether or not a specific use is evidence-based, however, the rules regulating pharmaceutical companies are very clear – they cannot market a drug for a non-approved use. Doing so breaks the law. GSK broke the law.

The second charge was that GSK held back data and made unsupported claims regarding its diabetes drug Avandia. The third charge is that their sales force used inappropriate tactics to get doctors to prescribe their drugs, including various forms of “high-priced entertainment” and large speaking fees. This practice has come under heavy scrutiny in the last decade and rules regulating what pharmaceutical reps can give to physicians have been significantly tightened. According to the settlement GSK violated those rules, not to mention basic ethical behavior.

Mark Crislip summarizes the concerns well in an article for Science-Based Medicine. He concludes that pharmaceutical companies give misleading and biased information to physicians, who are influenced by their contact with pharmaceutical reps, and that the best policy is for practicing physicians to keep a healthy distance from reps (no free lunches, no sponsored lectures, no free gifts). This has become voluntary policy in many institutions, including Yale where I work. Access of pharmaceutical reps to physicians is strictly limited.

The debate continues, however, about whether or not there can be a healthy relationship between doctors and pharmaceutical companies, or whether we need an absolute wall of separation between the two. One recent article, for example, found that doctors who have no access to pharmaceutical reps were up to four times slower to adopt new medications than physicians with some access to reps. In addition, they were also four times slower to stop using a drug that has a new black box warning, meaning that negative information about safety has come to light. It seems, therefore, that pharmaceutical companies can be a useful conduit of information to physicians, but that also comes with a lot of baggage. It seems to me that we have two choices. Either we develop new ways of quickly spreading the word about new valuable drugs and new warnings about existing drugs (pushing critical information to physicians), and/or we need to carefully monitor and regulate the pharmaceutical company distribution of this information.

The GSK settlement, in my opinion, is just the most recent evidence that industry cannot be left to their own devices without proper monitoring and regulation. There is a certain efficiency and motivation for innovation in the private sector approach to drug development. That seems worth preserving. But companies are chiefly motivated by profit, and when billions of dollars are at stake there is a huge motivation to bend the rules. We take for granted that companies are going to distort information when marketing their products to the public. Experienced and savvy consumers view all commercial and marketing activity with a skeptical eye and we do need to take some personal responsibility for protecting ourselves (let the buyer beware).

At the same time the public largely expects that with health care issues the government will play some role in protecting the public from fraud, misinformation, unsafe and ineffective products and services. The stakes are just too high to make every consumer fend for themselves in a completely unregulated wild west of health care. In addition the science behind health care products and services is complex, and it is not reasonable to expect the average citizen to be able to sift through complex technical medical research. That is essentially the reason for the existence of the FDA.

I think that with careful, thoughtful, and evidence-based regulations we can have the best of both worlds. We can have a dynamic and innovative pharmaceutical industry that is also regulated to protect the public from misinformation and fraud and to ensure a minimum standard of scientific evidence for safety and effectiveness.

What this recent settlement indicates, in my opinion, is that companies will bend the rules to maximize their own profits, and that effective regulation can bring them into line and protect the public. I also think this settlement is a significant piece of evidence against the typical “Big Pharma” conspiracy theory that government is in the hands of industry. It’s hard to dismiss $3 billion dollars as a slap on the wrist. This was a clear statement.

I hasten to add that everything I said above is also true of other private segments of the health care industry, including the supplement industry (which has large and increasing overlap with the pharmaceutical industry), and the alternative medicine industry. They like to promote this false dichotomy between the business end of medicine they decry and the “holistic” practitioners who just want to help people. This is a fiction. The people most loudly playing that card are also the ones making the most money off of selling their products, services, and information. Supplements and CAM are big business. They routinely misrepresent scientific information, make unsupported claims for their treatments, ignore data about lack of safety or effectiveness, and personally attack anyone who will dare disagree with them. And they are doing this to sell treatments that are scientifically dubious or even disproved, yet they have been remarkably successful in eliminating regulations designed to protect the public from their own fraud.

It is hypocritical to simultaneously call for more pharmaceutical company regulation and less supplement and alternative medicine regulation, but that is what they do. Rather, I think we need fair and consistent science-based regulation across the board. No double standards, no false dichotomies. I agree that GSK should be heavily fined for making unsupported claims for its products. And so should every company selling herbs, supplements, fanciful treatment, and dubious products with unsupported claims. Instead they are shielded by industry friendly and anti-consumer laws crafted by the industry itself.

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13 responses so far

13 Responses to “GSK Pays $3 Billion Fine”

  1. SARAon 03 Jul 2012 at 9:57 am

    One of my worries is the overlap in the pharma companies selling supplements. If alt meds become too prevalent and a larger portion of people replace a science based drug with supplements, why would big pharma invest their money developing science. It’s expensive and a gamble.

    A non regulated supplement is cheap and easy profit. A company must and will make choices to increase profit and minimize expense. Right now the big money is in science, but if the market for supplements gets big enough, it might not be.

    On the issue of conflict of interest, I think local doctor orgs should create an intermediary system between them and the drug companies. A physician sponsored party takes over the education of doctors on new drugs. This person could do office visits, to ensure the same level of proper information.

  2. elmer mccurdyon 03 Jul 2012 at 12:04 pm

    Just thought I’d head over to Alison Bass’s blog and find out what they were actually sued for, since this post is kind of vague…

    http://alison-bass.com/blog/2012/07/new-york-ags-office-should-take-a-bow-for-glaxosmithklines-record-breaking-fine/

    “p>It was Rose Firestein who unearthed the tactics that federal prosecutors now claim GlaxoSmithKline used to deceive American families about Paxil.  It was she who first noticed that an article, published in a prominent medical journal and used by Glaxo to market Paxil as safe and effective in children actually showed the opposite — that Paxil not only didn’t work in children but was more likely than a sugar pill to make them suicidal. As I and others have revealed (in books and blogs), that journal article actually misrepresented data from a clinical trial. Here’s what the Times today says about it:

    In the case of Paxil, prosecutors claim GlaxoSmithKline employed several tactics aimed at promoting the use of the drug in children, including helping to publish a medical journal article that misreported data from a clinical trial.

  3. Vinayon 03 Jul 2012 at 1:24 pm

    Steve,

    Good post. Just curious though, what specific changes would you implement (regulations or otherwise) to make the relationship between physician and rep better for patients? (if you were an all-powerful health czar). Also, what is your opinion on the level of influence pharmaceutical companies have on their regulating bodies (FDA), and would you change anything there (more power to FDA, more regulations, etc). If so, what?

    Thanks! Great chatting with you all in Vancouver.

  4. ConspicuousCarlon 03 Jul 2012 at 1:33 pm

    Is there not a simple newsletter or rss sort of thing for doctors to get timely updates on new drug approvals and warnings from the FDA? Talking to salesmen seems like the worst possible method.

  5. daedalus2uon 03 Jul 2012 at 5:24 pm

    Fining corporations isn’t going to deter illegal activity by employees. It isn’t their money, it is shareholder’s money. Putting employees who do illegal things in prison will deter illegal activity.

    Giving corporations who do illegal things the death penalty and wiping out shareholders’ equity would deter criminal activity, or at least it would prevent it from happening again.

  6. Thadiuson 03 Jul 2012 at 10:14 pm

    Employees do not operate in a vacuum, the institution sets rules of conduct and if you break those rules you are punished or terminated. The ultimate responsibility for employee’s actions rests with the executives. Fining the corporation is supposed to force those executives to fix the problem internally.

    I would also like executives to be held personally responsible, but the Corporation as Person interpretation of law creates amnesty for executives. This has the effect of passing the legal buck upward to an imaginary “entity”, the corporation. It’s like punishing the car and not the driver in a hit and run accident.

  7. Steven Novellaon 04 Jul 2012 at 8:01 am

    Carl – there are lots of independent sources of information. Information is distributed in two types of ways: pushing and pulling. Pulling is when a physician (or other practitioner) gets information they need. Pushing is when information is automatically given to a physician.

    The problem is physicians are busy, and there is an overwhelming amount of new information constantly being generated. What we lack, in my opinion, is a centralized mechanism to package critical updates and push them to every physician.

    Pharmaceutical reps, in one sense, push information to the physicians they encounter, both positive (hey, look at our new great drug) and negative (I have to tell you we now have a black box warning on this drug). It’s an additional source of pushed information.

  8. Kawarthajonon 04 Jul 2012 at 10:53 am

    Steve wrote:

    “What this recent settlement indicates, in my opinion, is that companies will bend the rules to maximize their own profits, and that effective regulation can bring them into line and protect the public. I also think this settlement is a significant piece of evidence against the typical “Big Pharma” conspiracy theory that government is in the hands of industry. It’s hard to dismiss $3 billion dollars as a slap on the wrist. This was a clear statement.”

    While I agree with this statement, I think the damage to the health care system has been done. Psychiatrists, paediatricians and family doctors are now routinely prescribing Paxil and Wellbutrin (even in Canada, where I live) for off label uses (i.e. depression in children/teens) and the $3 billion penalty, while a large fine, is nothing compared to the 10′s or 100′s billions of dollars in revenue that the company will get from the off label use of these drugs for years to come. It also provides good reasons to mistrust big pharma and gives insentive for people to pursue “alternative medicine”, regardless of the fact that many of the “alternatives” are also made by big pharmaceutical companies.

    I think that the private, for profit system of drug development is very, very broken. In order to pursue profits, big pharma pursues treatments for what I would consider to be minor health issues (i.e. male impotence), sometimes at the expense of other, much more important research (i.e. drugs to combat anti-biotic resistance, low cost drugs for HIV, etc.). They sometimes invent diseases in order to access additional, previously non-existant markets (i.e. childhood Bipolar Disorder). I have a friend who has worked for a few big pharma companies and she has candidly told me some of the horrible things that these companies have done in the name of profits, knowing that they are completely unethical and doing everything they can to cover up the truth. Having said this, I don’t know what the alternative drug system would be, although it likely involves monitoring and regulating the heck out of these companies, as well as criminal enforcement of the regulations. It would also likely involve lots of government funding for research into important drugs that are not being developed by big pharma due to the fact that they are not profitable.

  9. billysixstringon 04 Jul 2012 at 12:12 pm

    Steve wrote:

    “The problem is physicians are busy, and there is an overwhelming amount of new information constantly being generated. ”

    I’m sorry, but this sounds like an excuse. It seems to me that this is one of the most important duties of a physician, and if they can’t find proper channels to weed through this information then something is wrong with the medical industry.

    Also, there seems to be an assumption here that physicians are the noble scientist being taking advantage of by the greedy corporations. Are we really so sure that there aren’t plenty of physicians out there with dollar signs in their eyes and who love the attention they get from pharma reps? Maybe some of the existing rules were so easily violated because physicians themselves looked the other way.

    I think you jump too quickly to the regulation solution (especially since, as you clearly point out, GSK violated already existing regulations). Don’t the AMA and other medical organizations have some responsibility here? After all, it is their reputation and the reputation of their members that are at risk. I’m sure they already have some guidelines around these issues (I could be mistaken), but why aren’t they being pressed to police their members? Maybe they already do, but I don’t hear anyone clamoring for the AMA, et al to step up their enforcement.

    Steve wrote:

    “The GSK settlement, in my opinion, is just the most recent evidence that industry cannot be left to their own devices without proper monitoring and regulation.”

    This may be true, but in some of the violations mentioned above there were two parties involved – GSK and the physicians receiving the information/perks. Some of those physicians may have been dupes, but I can’t believe they all were. The industry doesn’t have to be “left to their own devices” – those that rely on the industry may need to step up.

    I am not trying to defend pharma companies at the expense of physicians. I agree with Steve about the important relationship between the two and the information that needs to be shared. All I am trying to say is that centralized regulation by a third-party is not some panacea (think of the Public Choice considerations). Physicians and their organizations should be looking to step up their enforcement.

  10. elmer mccurdyon 04 Jul 2012 at 12:55 pm

    The fact that a company occasionally gets caught doesn’t mean that the pharmaceutical industry doesn’t have an incredible amount of power in the government. Not to mention the health insurance industry…

  11. ccbowerson 04 Jul 2012 at 1:44 pm

    “One recent article, for example, found that doctors who have no access to pharmaceutical reps were up to four times slower to adopt new medications than physicians with some access to reps. In addition, they were also four times slower to stop using a drug that has a new black box warning, meaning that negative information about safety has come to light.”

    The black box warning thing is clearly one positive (and I’m sure that some of it is mentioning the black box warnings of competing drugs), but it is not clear to me that being more likely to prescribe a new medication is a good thing. Since this is a relative comparison I wonder which group is closer to an ideal rate of adopting new medications- I tend to think that it would be somewhere in between. Though personally, I would prefer to be the later adopter… in many cases the best evidence is with the medications that have been around a while and we know more about them- good and bad.

    In total, though this information looks at only potential positives, which are countered by the misleading and sometimes misinformation provided to physicians by people in sales. Their objective is more sales, not better medicine, and to think of that that as an overall positive “push” of information is hard to defend

  12. MarylandMDon 06 Jul 2012 at 12:05 am

    Dr Novella,

    I am concerned about the following statements in your article:

    “One recent article, for example, found that doctors who have no access to pharmaceutical reps were up to four times slower to adopt new medications than physicians with some access to reps. In addition, they were also four times slower to stop using a drug that has a new black box warning, meaning that negative information about safety has come to light. It seems, therefore, that pharmaceutical companies can be a useful conduit of information to physicians, but that also comes with a lot of baggage.”

    The article you link to is an industry-sponsored study that I find to be thin on useful information. Why do you refer to it without question as if it is a valuable study? Have you looked at it in detail? As a proponent of science-based medicine, why are you just quoting relative differences instead of absolute differences? Regarding one of the measures used in the study: is being more or less likely to prescribe Januvia when it was first put on the market a direct measure of quality care? Is NOT using Januvia a sign of an uninformed physician or just good sense? I have always been and I am still reluctant to use Januvia for my diabetic patients–it is expensive and does not do much to improve the A1c.

    I feel using the study to draw even the limited conclusion “that pharmaceutical companies can be a useful conduit of information to physicians” is a big stretch. I am concerned that this is a weak study being overblown by the pharmaceutical industry to counter some of the restrictions imposed by med schools and hospitals on the activities on drug reps. Is this really a good study, or did you fall for little more than drug company propaganda posing as science? I was hoping to see someone from Science-Based Medicine to take a long hard look at this very study, especially the statistical analysis, but instead you are treating it as accepted science. I am a bit disappointed.

    [this question was also posted on this article in Science-Based Medicine--sorry for the duplication, but I wasn't sure which forum you would prefer to respond in]

  13. elmer mccurdyon 06 Jul 2012 at 11:56 pm

    More blog posts…

    Seems not all physicians are as sanguine about this as Dr. Novella:
    http://www.billyrubinsblog.org/2012/07/health-news-belongs-in-health-section.html

    Perhaps the article’s most important point is that, while seemingly a huge fine, it may be regarded as no more than a parking ticket to company executives. For starters, no individual will face any charges. “What we’re learning is that money doesn’t deter corporate malfeasance,” former NY attorney general Eliot Spitzer is quoted as saying. Stifle the laughter: Spitzer, before his own fall from grace, sued GSK on behalf of New York back in 2004 for similar issues, so he’s an appropriate sound bite for the article.

    He even refers to “Big Pharma” as if such a thing actually existed! As does a former Secretary of Labor:
    http://robertreich.org/post/26568286162

    Both card-carrying NCCAM members, no doubt.

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