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.