Glaxo chief executive angry over NYS AG lawsuit – Telegraph

Glaxo chief executive angry over NYS AG lawsuit – Telegraph

Tue, 8 Jun 2004

The significance of the lawsuit filed by NYS Attorney General, Eliot Spitzer, has infuriated Jean-Pierre Garnier, GlaxoSmithKline’s CEO. As Money.Telegraph (UK) reports (below), the AG suit carries a significance beyond the money sought.

“Reputationally, however, the lawsuit carries much greater risk, something that Spitzer’s previous targets, including some of Wall Street’s finest investment banks, are acutely aware of. And with big pharma already in the firing line for its supposedly expensive medicines ahead of this autumn’s election in the US, the stage is set for battle.”

Jean-Pierre Garnier made my day with his appeal for “a fair chance:” “I think this is very unfortunate because our reputation is attacked and we are not getting a fair chance to rebut because this is the almighty District Attorney office from mid-Manhattan. This is a heavyweight and I hope our voice will be heard and I hope people will not judge us on this press release from Mr Spitzer’s office. It’s unfair,” he says.

Perhaps Mr. Garnier doesn’t realize that Attorney General Spitzer (not District Attorney) is providing him, and the other GSK executives who run the company, precisely such “a fair chance.” They will be afforded an opportunity to explain the company’s marketing tactics– in open court. See the company’s 1998 CMAT-Neuroscience memo spelling out company policy on concealment of data: http://www.ahrp.org/risks/SSRI0204/GSKpaxil/pg5.html

Contact: Vera Hassner Sharav
Tel: 212-595-8974

http://money.telegraph.co.uk/money/main.jhtml?xml=/money/2004/06/06/ccglax06.xml
Garnier comes out fighting
(Filed: 06/06/2004)

GSK’s chief executive tells Sylvia Pfeifer and Robert Peston why the lawsuit filed by the New York attorney general has made him very angry

Jean-Pierre Garnier knows all about having to defend his reputation. The 57-year-old chief executive of GlaxoSmithKline, Europe’s largest pharmaceutical group, has spent much time over the past year fending off accusations of being an excessively remunerated “fat cat”.

But today Garnier and GSK face a more serious charge, having been accused of indulging in “repeated and persistent fraud” by concealing information about the company’s best-selling product, the anti-depressant Paxil.

In a lawsuit filed on Wednesday, Eliot Spitzer, the attorney-general of New York state, claims that GSK withheld information from doctors about the negative results of clinical trials it conducted into the use by children of Paxil.

Spitzer wants GSK to be fined the profits it made from under-18s using Paxil, a group he estimates accounted for sales of $55m (£30m) in the US in 2002. Were GSK to lose the case, analysts estimate the fine could amount to $150m – not much compared with GSK’s earnings last year of £4.5bn.

Reputationally, however, the lawsuit carries much greater risk, something that Spitzer’s previous targets, including some of Wall Street’s finest investment banks, are acutely aware of. And with big pharma already in the firing line for its supposedly expensive medicines ahead of this autumn’s election in the US, the stage is set for battle.

Characteristically, Garnier has come out fighting. He vigorously defends GSK’s record and reveals that the company had no advance warning the lawsuit was coming.

“I think this is very unfortunate because our reputation is attacked and we are not getting a fair chance to rebut because this is the almighty District Attorney office from mid-Manhattan. This is a heavyweight and I hope our voice will be heard and I hope people will not judge us on this press release from Mr Spitzer’s office. It’s unfair,” he says.

The lawsuit alleges that GSK published and disseminated only one of five studies it conducted on the impact of the drug on children, and suppressed the negative results of the other studies “which failed to demonstrate that Paxil is effective and which suggested a possible increased risk of suicidal thinking and acts”, according to Spitzer. GSK is also alleged to have failed to disclose this information in “Medical Information Letters” sent to physicians.

Is there anything GSK could have done differently? No, says Garnier, noting that people may have become confused about testing procedures. He says that results of trials to test the safety of potential new medicines are notified immediately to the Food and Drug Administration, the US regulator, if new “indications” are found. To test efficacy, companies have a series of studies done and only when all the conclusions are in are they presented to the regulator.

“Our bad luck, in a way, is that the first study came in positive and we informed medical congresses because there was a lot of interest in it. The subsequent studies were negative, so once we had all the studies we told the FDA,” says Garnier.

Did GSK do everything perfectly? “I’m not sure,” Garnier concedes, “but you know, overall the pattern is very clear, that we did what we were supposed to do . . . Mr Spitzer makes the case that we advertised the positive studies more. That is absolutely incorrect. What happens is that if there is a positive effect, that’s news. When there is a negative effect, there is no news.”

But how does he explain an internal memo from 1998, first published in Britain last year, which says that GSK intended “to manage the dissemination of [the] data in order to minimise any potential negative commercial impact”?

“Here’s an interesting case in point,” Garnier says. “Can a company control the millions, and I mean millions, of memoranda written by, in our case, 110,000 people? What are the odds that stupid memos were written? What are the odds that memos asking the company to do things against company policy will be written? The odds are 100 per cent!

“Of course we didn’t follow this advice. Of course we didn’t selectively publicise the data. This is not a smoking gun. It’s a stupid memo and there are lots of stupid memos in every company’s file and it is really unfair to look at the company’s action through the small hole of one memo written among thousands and thousands in 1998. I do regret that those memos exist but I’m not going to lose sleep over the fact.”

Garnier is adamant too that commercially it would simply have made no sense to break the rules. “Some people say this is a commercial pressure. This is 3 per cent of the depression market. Do you think you are going to put your reputation at stake to gain something there?” he thunders.

So what happens next? Analysts are not ruling out other states jumping on the bandwagon, nor the possibility of class action lawsuits being filed in the US. So far, says Garnier, there are no signs of that but the industry as a whole is becoming too easy a target.

“It’s becoming too easy for many people to attack the pharma industry and hold the pharma industry to standards that are higher than anywhere else. I don’t have a problem with the standards but I do have a problem with extortion.”

Perhaps the redoubtable Spitzer has met his match in this combative Frenchman.

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