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The company may have broken US and UK laws on bribery, says Shelley Jofre
GlaxoSmithKline (GSK) recently announced that by 2016 it will end direct payments to doctors for promotional talks and stop setting individual targets for its sales reps.1 The announcement by GSK, which last year made profits of £6.6bn (€7.9bn; $11.0bn), was broadly welcomed in an industry that has long been tarnished by accusations of corruption and aggressive marketing.
But just as Britain’s largest drug company attempts to rebuild its image, it has emerged that the company is now facing new allegations of bribery in Poland and Iraq.2 A BBC Panorama report, entitled “Who’s paying your doctor?,” has found that GSK is under investigation in Poland for allegedly bribing doctors there.
It’s alleged that GSK sales reps in the region of Lodz, Poland’s third largest city, paid doctors as recently as 2012 to boost prescriptions of some of the company’s best known drugs.
A spokesman for the Lodz public prosecutor’s office, Krzysztof Kopania, toldPanorama that one GSK regional manager and 11 doctors have been charged in connection with corruption allegations for offences committed in 2010-12.
One doctor has already admitted guilt, been fined, and given a suspended sentence. He told Panorama he took money but only under pressure from a GSK drug rep. The investigation is ongoing.
A former sales rep for GSK in Lodz, Jarek Wiśniewski, told Panorama that money from the company’s £1m annual marketing programme for GSK’s blockbuster asthma drug, fluticasone (which it markets as Seretide), was used to bribe doctors to boost sales of the drug.
“There is a simple equation,” Wiśniewski told Panorama. “We pay doctors, they give us prescriptions. We don’t pay doctors, we don’t see prescriptions for our drugs.”
The whistleblower explained that the bribes were disguised as fees for “educational services.”
“We cannot go to doctors and say to them, ‘I need 20 more prescriptions’,” said Wiśniewski. “So we prepare an agreement for them to give a talk to patients—we pay one hundred pounds, but we expect more than a hundred prescriptions for this drug.”
Wiśniewski confirmed that the doctors understood clearly that they must produce a certain number of prescriptions in return for the money. It’s a bribe, he said.
The Polish investigation has established, independently of former employees, that contracts were signed and payments made to doctors in at least a dozen different health centres across the region of Lodz where there was no evidence that “patient education” had taken place.
The payments were often small by UK standards—according to the prosecutor most were for several hundred zloty, but some were for several thousands (100 zloty = £20 (€24; $33)). But for Polish doctors, who earn around £700 a month, the sums are considerable.
Another former GSK rep in Poland, who spoke to Panorama on condition of anonymity, confirmed the payments influenced doctors’ prescribing:
“This worked on the principle of a kind of obligation. The doctor feels obliged and he tries to a greater or lesser degree to fulfil that obligation. I think that—as with many colleagues—my feelings were very negative and unpleasant but such was the working culture. It is not easy to find a job.”
In response to Panorama’s questions about the case, GSK confirmed that it ran a programme in Poland in 2010-12 to help improve diagnostic standards and medical training for the benefit of patients with respiratory disease.
“[Some] sessions were delivered by specialist healthcare professionals who, based on contracts signed with GSK, received payments appropriate to the scope of work as well as their level of knowledge and experience. The provision of sessions under this programme was agreed with the Polish healthcare centres.
“Following receipt of allegations regarding the conduct of the programme in the Lodz region, GSK has investigated the matter, using resources from both inside and outside the company,” the company added. “The investigation found evidence of inappropriate communication in contravention of GSK policy by a single employee. The employee concerned was reprimanded and disciplined as a result. We continue to investigate these matters and are co-operating fully with the CBA [the anti-corruption bureau in Poland].”
GSK said it agreed that “there is a need to modernise interactions between the pharmaceutical industry and healthcare professionals to ensure patients’ interests are always put first and to eliminate even a perception of a conflict of interest. This is why we have made, and will continue to make, fundamental changes to our business such as opening up access to our clinical trial data, changing how we pay our sales representatives and stopping payments to healthcare professionals for speaking engagements and for attendance at medical conferences.”
Meanwhile, in Poland, doctors face jail sentences of six months to eight years if they are found guilty of giving or accepting bribes, and GKS’s Lodz manager faces one to 10 years if found guilty of bribery.
Wiśniewski first raised his concerns with his bosses at GSK in Poland in May 2011. He says they carried out an investigation, then he was moved to another department. In September 2012 he was eventually fired for “poor performance” even though he says he had been singled out as a high flier in previous years. He is now unemployed.
GSK did not respond to questions about how the Polish whistleblower was treated.
Cases in US and China
The details of the case emerge as GSK attempts to rebuild its image after pleading guilty in 2012 to criminal charges in the United States and paying $3bn (£1.8bn) in fines for promoting some of its best selling antidepressants for unapproved uses, bribing doctors, and failing to report safety data about its drug for the treatment of diabetes.3 The allegations dated to the mid-2000s, and Andrew Witty, who took over as chief executive in 2008, claimed the behaviour dated from a different era.
Similar allegations emerged last year in China, where authorities have accused GSK of funnelling substantial sums in expenses to doctors and officials in 2007-10 to encourage them to use its drugs. GSK’s funding for all advertising, promotional, and training activity in China during the relevant period was around ¥3bn (£288m; €350m; $483m). The extent to which this funding was used fraudulently remains under investigation. The company again said such behaviour was not sanctioned at a corporate level and that claimed senior executives of GSK China had “acted outside of our processes and controls.”4 GSK has said it is “cooperating fully with the investigation in China.”
The head of GSK China was replaced in 2013, and GSK has reportedly just sacked more of its Chinese staff.5
GSK confirmed recently that it is also investigating bribery accusations in Iraq.
Views from Public Citizen
But Sydney Wolfe, founder of US campaign group Public Citizen, is sceptical of GSK’s recent pledge to change its ways. He recently analysed all the fines paid out by the drug industry in the US over the past 21 years and says that GSK is a repeat offender that tops the list.6
“Glaxo was the number one with $7.6bn in these penalties and the number one company in the world in terms of total criminal and civil penalties. The penalties are not large enough to deter these illegal activities. They keep doing it over and over again, and in one year Glaxo makes more money in terms of profits than all the penalties they’ve paid over the 21 years.”
GSK challenged Public Citizen’s calculations, however, telling Panorama that they included $3.4bn, which was “not a penalty or a fine and did not relate to sales and marketing practises.” GSK said the sum was “from a resolution we reached in 2006 with the US Internal Revenue Service (IRS) to pay tax related to transfer pricing.”
If the new allegations are shown to be true, then GSK might have violated both the UK’s Bribery Act and the US’s Foreign Corrupt Practices Act (FCPA). In both countries it is illegal for companies based there to bribe government employees abroad. In the US, some drug companies have already paid out settlements after allegations they contravened the FCPA.
The Bribery Act came into force in the UK only in 2010, and there have not yet been any drug company prosecutions.
The US has taken a tough stance in recent years on drug industry corruption at home and abroad, making extensive use of whistleblowing legislation, which rewards employees who come forward with information about law breaking.
It was evidence from some of GSK’s former employees in the US that resulted in the $3bn payout in 2012. Blair Hamrick, a GSK sales rep in Colorado for seven years until 2002, told Panorama he often made large payments to doctors for “educational” talks that were, in reality, purely promotional:
“We would have these Continuing Medical Education programmes that would get CME credit for the doctors, and they were nothing but a commercial,” he said.
“There was what’s called an ROI analysis [return on investment] about six months after a specific speaker programme. So if we spent $5000 on a speaker and we spent $20 000 on tickets and food, that’s $25 000 invested. They would take all those physicians and they would track their prescription volume, and they would want to see an increase in prescriptions greater than $25 000 worth of business.”
Hamrick adds, “The abhorrent behaviour that was going on, it was not only condoned, but we were compensated heavily for doing it.”
GSK announced in December that it is going to scrap the link between its reps’ pay and drug sales targets globally by 2016.
A Washington lawyer who represented two other GSK whistleblowers, however, points out that this was something the company had already agreed to do in the US, as part of a Corporate Integrity Agreement drawn up during negotiations for the $3bn settlement.
Erika Kelton of law firm Philips and Cohen told Panorama: “There were prospective requirements for ongoing compliance that were imposed on Glaxo. In the past, GlaxoSmithKline had compensated sales representatives by paying them bonuses based on the amount of revenue that they generated. That kind of incentive compensation that’s geared to how much revenue you’re bringing in encourages off-label marketing, encourages borderline or over the line practices to get more sales.”
The latest allegations against GSK are likely to prompt further debate over how little is known about industry payments made to doctors in the UK, even if they are not breaking the law.
In the US, GSK was forced to detail exactly how much it pays individual named doctors, and the company’s payments to US physicians have since plummeted by 75%, from $56.7m in 2010 to $14.6m in 2013. A similar effect has been seen with many other drug companies that have been forced to publish such details in the US.
Since 1 April 2014, when the Sunshine Act came into effect, all pharmaceutical companies must now detail their payments to named physicians in the US. By contrast, drug companies in the UK have been obliged only since last year to supply an aggregate total. There is no way of finding out which individual doctors are being paid or how much.
The latest UK figures published by the ABPI (Association of the British Pharmaceutical Industry) on 3 April show that payments from the pharmaceutical industry to healthcare professionals last year totalled around £38.5m, roughly level with the previous year.
Stephen Whitehead, ABPI’s chief executive, told Panorama: “You need to work with healthcare professionals to get understanding of the new science coming through, and that is a legitimate relationship. What you need to have to maintain confidence in these relationships is absolute crystal clear transparency about the money that changes hands. Then let people make their own judgment as to whether they think that’s appropriate.”
Whitehead says the ABPI is committed to full disclosure of payments in the UK by 2016 and is currently developing a searchable, centrally hosted register for payments in collaboration with the medical community.
July 2012—GSK pleads guilty to criminal charges over its business in the US in the early 2000s and pays $3bn (£1.8bn; €2.16) in fines, the largest settlement ever involving a pharmaceutical company
January 2013—First reports emerge that GSK faces allegations of widespread corruption in its Chinese workforce in 2007-10
December 2013—GSK becomes first major drug company to agree to full disclosure of all its trial data.
2014—Allegations of bribery by GSK in Iraq (as recently as 2012) and Poland (in 2010-12) reported
2016—GSK to end direct payments to doctors for promotional talks and attending conferences and stop setting individual targets for its sales reps
Cite this as:BMJ 2014;348:g2768
The Panorama programme “Who’s Paying Your Doctor?” it to be broadcast at 8.30 pm on Monday 14 April on BBC 1.