Our settlement with the US Government

Read the press release issued on July 2, 2012.

In 2004, GlaxoSmithKline became aware that the US Department of Justice was investigating the company’s sales and promotional practices between January 1997 and 2004 related to nine products (Advair, Flovent, Imitrex, Lamictal, Lotronex, Paxil, Valtrex, Wellbutrin, and Zofran).  The investigation of Advair was later extended to June 2010.

Also in 2004, we were informed that the US Department of Justice was investigating certain nominal pricing and alleged bundled sale arrangements under the nominal price exception to the best price reporting requirements of the Medicaid Drug Rebate Program.  (GSK has not entered into any nominal price arrangements since December 2003.)

The Department of Justice also investigated the company’s marketing and regulatory submissions of Avandia, including our reporting of required information to the US Food and Drug Administration about post-marketing studies being performed by, or on behalf of, GSK, for Avandia

We cooperated with the Department of Justice in these investigations.   In November 2011, we announced that we had reached an agreement in principle with the United States Government to conclude these investigations.  The final settlement has now been completed.

The company reached this settlement with the government to avoid the delay, expense, inconvenience and uncertainty of protracted litigation of the government’s claims and to put behind us these long-standing investigations of what was, for the most part, very old conduct.   

As part of our final agreement, we will pay $3 billion to resolve civil and criminal liabilities resulting from these investigations, and we have also entered into a Corporate Integrity Agreement (CIA), with the US Government.  The CIA also covers obligations the company has agreed to relating to the settlement of the federal government’s investigation of its former Cidra, Puerto Rico, manufacturing facility, which was concluded in October 2010. 

Statement from GSK Leaders

Andrew Witty, CEO

Today brings to resolution difficult, long-standing matters for GSK. Whilst these originate in a different era for the company, they cannot and will not be ignored. On behalf of GSK, I want to express our regret and reiterate that we have learnt from the mistakes that were made.

We are deeply committed to doing everything we can to live up to and exceed the expectations of those we work with and serve. Since I became CEO, we have had a clear priority to ingrain a culture of putting patients first, acting transparently, respecting people inside and outside the organisation and displaying integrity in everything we do.

In the US, we have taken action at all levels in the company. We have fundamentally changed our procedures for compliance, marketing and selling. When necessary, we have removed employees who have engaged in misconduct. In the last two years, we have reformed the basis on which we pay our sales representatives and we have enhanced our ability to ‘claw back’ remuneration of our senior management.

We have a vital role to play in bringing innovative medicines to patients and we understand how important it is that our medicines are appropriately promoted to healthcare professionals and that we adhere to the standards rightly expected by the US Government.

Deirdre Connelly, President, North America Pharmaceuticals

Although the activities covered by this settlement largely occurred years ago, we must learn from the past.  And we have. 

Today GSK is a company with policies and procedures that are stricter than federal regulations.  The measures we’ve adopted illustrate our values of transparency, respect, integrity, and focus on the best interests of patients.  These values are at the center of everything we do—as a company and as individuals—to ensure that we are appropriately promoting our medicines and vaccines to the healthcare professionals we serve. 

We take pride in the fact that we provide quality medicines and vaccines that are based on sound science.  As we move forward, we remain committed to appropriately informing healthcare providers about our medicines—and the diseases they are approved to treat—so that patients receive the care they need to maintain and improve their health.

Evolving to Meet Society's Expectations

We are committed to sales, marketing, research and manufacturing practices that are responsible, principled and patient-centered.   Our policies meet or exceed the US PhRMA Code on Interactions with Healthcare Professionals and in some cases are stricter.

All GSK employees, including sales representatives, must also abide by the requirements of GSK’s comprehensive Corporate Ethics and Compliance Program, which is operated consistent with the Office of the Inspector General’s Compliance Program Guidance for Pharmaceutical Manufacturers.  The Guidance is available on the HHS OIG website (PDF will open in new window).

We have also instituted enhanced monitoring and auditing processes to help detect and investigate suspected breaches of our policies.  We take appropriate disciplinary action, including dismissal, as well as other actions, such as training, where warranted. We report our disciplinary actions in the Addressing Misconduct section of our Corporate Responsibility Report.

Other initiatives to drive change in commercial procedures have also been undertaken, which are described here:

GSK's Compliance Programs

GSK has significantly strengthened its compliance program and training for employees over the last several years to reinforce the importance of interacting ethically and lawfully with healthcare providers.

We now have eight deputy compliance officer positions in US Pharmaceuticals who sit on leadership teams of each of our business areas.  We also have 79 Integrity Champions in the business whose role is to be involved in the formulation and implementation of policy and to educate their colleagues.  The intention is that every employee in the sales and marketing staff reviews quarterly any new policy changes, environmental trends and internal trends.

We have an active Integrity Helpline, through which employees can ask questions to ensure they are handling particular issues or situations appropriately.  We receive 300-400 calls per month to the Helpline from staff, mostly to answer questions about how to appropriately interpret compliance obligations.

Employees are also encouraged to report suspected violations to their managers, to HR, Legal or Compliance, or to the Integrity Helpline.  Potential violations are investigated and handled as appropriate, up to and including dismissal from the company.  GSK self-reports any violations to the OIG as well as actions taken.

We conduct a thorough investigation to determine if actual wrongdoing occurred or if the allegation was unfounded.  We report our disciplinary actions in the Addressing Misconduct section of our Corporate Responsibility Report.

Employees who raise good faith concerns are safeguarded, supported in the workplace, and recognized, as appropriate.  They are guaranteed confidentiality to the greatest extent possible.  They are guaranteed protection from retaliation, retribution and any form of harassment for raising the concern. 

Appropriate Marketing and Sales of our Medicines

We market and sell quality medicines based on sound science, and we are committed to educating physicians about our products and the disease states they are approved to treat because we believe that these efforts can lead to better patient compliance and improved health outcomes. 

Pharmaceutical sales representatives’ interactions with health care providers are extensively regulated by the government.  For instance, our promotional materials are submitted to FDA when published and they regulate all information and promotional materials distributed by our sales representatives or disseminated through other channels.  

Our professional sales representatives can only provide information on approved uses for a medicine, may not discuss information that is not contained in a product’s FDA-approved labeling or promotional materials and must refer all prescriber requests for additional information back to GSK scientists for a response.  The information they provide must be based on valid scientific evidence and must be accurate, balanced, fair, objective, unambiguous and up to date.

  • Field representatives may not answer unsolicited, off-label questions.
  • Field representatives are not provided articles on unapproved uses.
  • Medical Information Scientists or Regional Medical Scientists may answer unsolicited questions on unapproved uses of GSK products.

In addition to these regulations and policies, which generally govern our interaction with healthcare professionals, we have policies in place that cover specific areas of engagement.

Sales Incentive Compensation We implemented a new system for evaluating and compensating our sales force in 2011.  This new compensation plan is unlike any other pharmaceutical company pay plan that we know.  It is another signal to society and to our customers that we want to be a different type of company.

Under the new program, sales representatives continue to be compensated with a mix of competitive salary and bonus.  The new system eliminates individual sales targets for sales representatives who work directly with healthcare providers as a basis for bonuses, and instead bases incentive compensation for these representatives primarily on sales competency, customer evaluations, and the overall performance of the business unit.

The changes we made to our incentive compensation program were made to ensure that the goals of our sales representatives were aligned with the healthcare professionals they call on and put the interests of patients first.

We have developed new tools to evaluate the performance of our sales professionals.  We will also continue to hold our sales professionals accountable for performing in a way that is consistent our values of transparency, integrity, respect, with focus on what’s best for patients.

No Entertainment Policy Our US Pharmaceuticals personnel are prohibited from providing recreation and/or entertainment to healthcare professionals, healthcare professional consultants or non-healthcare customers in conjunction with any meeting or program (e.g., Speaker Program, Speaker Training, Advisory Board, etc.).

Meals Policy      Our employees cannot host meetings at venues that could reasonably be perceived as lavish or extravagant for a business meeting.   Our policy is that it must be the program, not the venue or hospitality that attracts delegates to attend.  We do not invite delegates’ guests to accompany them nor do we pay for the costs of guests.

Our field sales representatives and their immediate managers may only provide an occasional, modest meal/snack (food or beverage) to healthcare professionals under the following circumstances:

  • In the office, hospital or clinic setting
  • Outside of the office / hospital /clinic setting at a GSK-sponsored speaker program conducted by an external speaker or GSK Regional Medical Scientist and where permitted by state law.

We do not permit meals to be provided by our sales representatives at locations other than those described above.

Any meals or snacks we provide to healthcare professionals must be modest as judged by local standards.  The following limits apply when providing food or beverages to a healthcare professional:

  •  Out-of-office meal—up to $100 per person for most areas of the country, up to $135 per person for certain, defined areas.
  • In-office, in-hospital or in-clinic meal/snack (in-service or speaker program)—up to $25 per customer who may be reasonably expected to gain from the discussion based on the educational topic/ content and their involvement with patient care.
  • Administrative or office support personnel are not considered healthcare professionals.

Limits on Gifts Our policy is that items for healthcare professionals must be educational or assist patients in the administration of their treatment or management of their condition.  Our policy prohibits providing items as an inducement to prescribe any of our medicines or to medical professionals in the context of any “fee for service” work they do for us.

Our policy does allow items designed primarily for the education of healthcare professionals to be given occasionally to healthcare professionals, provided the value of the item is $100 or less and the item does not have value to the healthcare professional outside of his or her professional responsibilities.  (Cost are based on healthcare professional acquisition cost and not cost to GSK.)

We also prohibit giving practice related or non-educational items (e.g., stethoscopes, blood pressure cuffs, pens, pads, calendars, tape dispensers, tote bags, etc.) to healthcare professionals or members of their staff regardless of their value, and even if they are accompanied by patient or physician educational materials.

Samples Samples play an important role in US health care by helping prescribers identify the best medicines for patients, which helps them comply with the prescribed treatment and to give a patient and a physician an opportunity to try a medicine before filling a prescription.  Samples also allow patients to start their regimen prior to getting the prescription filled at the pharmacy.  For these reasons, we believe samples play an important role in our efforts to help facilitate improved patient health outcomes.

To ensure that the samples we provide are used to advance patient care our policies require that samples only are distributed to licensed prescribers.  In addition, samples, coupons or vouchers cannot be provided to healthcare professionals who would not reasonably be expected to write a significant number of prescriptions for an approved use of the GSK product consistent with the approved package insert.

Our policy also requires that our personnel be trained on a medicine before they can speak with healthcare providers about it or provide samples to a physician.  We prohibit the distribution of samples from a commercial booth at medical conventions.