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.
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.
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.
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 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.
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.).
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 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.
We work with healthcare professionals because they provide valuable knowledge, insight and experience in disease and therapy areas that are important to the company and its customers. Their knowledge and experience also helps GSK understand trends in the delivery of healthcare and the evolving needs of patients and providers for more effective medicines and vaccines.
In the case of speaker programs, we contract with some healthcare professionals to share their expertise in therapeutic area, disease state and GSK treatment options with peers and colleagues to help physicians improve patient care in their clinics and practices. We believe healthcare professionals benefit from peer-to-peer discussions of disease states and treatment options.
We have instituted a code on promotional practices that specifies the allowable circumstances under which we can work with healthcare professionals, the types of information that can be provided, where meetings can be conducted, and the rates at which we compensate them for their time and service.
In October 2008, we announced that we would voluntarily begin to make information about the payments we provide to healthcare professionals available to the public. By making this information available publicly, we took an important step towards improving patients’ understanding of how the pharmaceutical industry and healthcare providers work together to improve patient care. Sharing this information also is in keeping with GSK’s values – to be patient-focused, to work with the highest integrity, to be transparent in our actions, and to treat others with respect.
On Dec. 14, 2009, we voluntarily posted the first report of GSK payments to U.S. healthcare professionals for speaking and advising services. (This first posting covered payments made from April 1, 2009, through June 30, 2009.) We continue to update reports quarterly. Our postings also include cumulative totals for the year.
Over time, we have made changes in our speaker programs, including requiring that:
- speakers present all approved slides to ensure safety information is presented appropriately
- speakers not use their own slides for any purpose, including disease-state discussion or responding to unsolicited questions
- speaker contracts include requirements that they disclose the existence and nature of their relationship with GSK to any formulary or guideline committees
- speaker programs be subject to monitoring for compliance with GSK policy
- speaking and consulting fees be capped at $100,000 per calendar year per physician beginning in 2010. With the advent of new federal legislation requiring disclosure of payments from pharmaceutical companies to healthcare professionals, the cap has effectively been lowered because expense reimbursements are also included in the total.
In March 2009, we also committed to voluntarily begin reporting research payments made to US healthcare professionals and their institutions. The first posting occurred in 1Q2011 and covered research payments made in 2010 to US HCPs or their affiliated institutions for research studies that began on or after January 1, 2010.
This is our current listing of payments to US healthcare professionals for speaking and advising. This is our current listing of payments to US healthcare professionals for research.
We conduct advisory boards with healthcare professionals because they bring knowledge and perspective from their experience that they share (with GSK and with other healthcare professionals) to help improve patient care. We have policies in place that specify the allowable circumstances under which we can hold advisory board meetings.
The commercial team must define clearly the topic, questions and agenda for the ad board, the experts to be invited, the advice to be sought and the place the meeting will be held. Our Legal department then reviews this information. An action plan must be developed as follow-up to the meeting.
Some of the specific requirements we impose on our engagement with advisory boards are:
- limiting the number of people who can be invited and the GSK personnel who can attend
- requiring a written agreement between GSK and advisory board members
- implementing standardized fees based on fair market value
- ensuring all advisory boards meet legitimate business needs for the services
- limiting the number of advisors to no more than necessary to obtain the advice
- and requiring documentation demonstrating use of the advice or, if not, why not.
Continuing Medical Education
In 2010 we sharpened the focus of our support for continuing medical education programs for healthcare professionals in an effort to ensure that we are funding some of the highest quality educational initiatives with the greatest potential to improve patient health. We have adopted strict guidelines to ensure both the quality and the independence of the educational programs we support.
In keeping with our new approach we are funding independent medical education for healthcare professionals in therapeutic areas selected because of the medical, social and economic burden they pose to society and the healthcare system. For a listing of our areas of focus in 2012 see: 2012 Disease Areas of Interest.
Our new model has been evolving for several years and reflects our commitment to supporting independent educational programs that are most likely to improve patient health. That means we have significantly reduced the number of grants we fund, from hundreds in 2009 to fewer than 13 in 2010 and one in 2011. To see a listings of grants funded in 2010 and 2011, click here 2010 CME Grants and here 2011 CME Grants
We have also defined criteria for Independent Medical Education Providers who are eligible to apply for our Continuing Medical Education grants. Our criteria are that these organizations must:
- be accredited by a national accrediting body (ACCME, ACPE, ANCC, or equivalent) or centralized CME office (assumed due to accreditation requirements)
- demonstrate capabilities to design and deliver initiatives that close healthcare professional performance gaps and improve patient health
- not be a Medical Education and Communication Company (MECCs).
Complete information about our Continuing Medical Education support can be found at Partners in Knowledge.com.
Grants to Nonprofits and Advocacy Groups
We support U.S.-based, non-profit organizations that have a general interest in progressing the prevention, treatment and management of disease. The types of non-profit organizations we support include:
- Healthcare Professional Associations (HPA)
- Trade Associations (non HCP) which are regional
- Legislative, Policy, Government Relations and Advocacy Organizations
- Patient Advocacy Organizations
We support patient advocacy organizations that provide patients, their families and friends with support and information on how to live with disease and represent patient views and campaign for change on issues that affect patients’ and care givers’ lives. We want to understand patient needs, support their voice and foster a constructive healthcare debate for all stakeholders.
The kinds of activities that we support include disease education for patient advocacy organizations, corporate memberships and meetings. Our funding must align with GSK’s policies, the PhRMA Code and comply with Federal healthcare, FDA and other laws applicable to GSK and the organization.
We believe that being transparent about our funding is important to building and maintaining trust. We require that any non-profit organization seeking GSK funds consider how to disclose GSK’s support.
Our funding for Healthcare professional associations, trade associations, legislative, policy, government relations and advocacy organizations and patient advocacy organizations can be found here: Grants and Charitable Contributions.
We do not use funding as a means to promote GSK products and services.
Global Manufacturing and Supply
GSK’s global manufacturing and supply operations leads the rapid commercialization of GSK’s products through a global network of 76 manufacturing sites in 32 countries. Our global network uses a variety of processes and the latest technology to deliver 1,400 brands and four billion packs of medicines and healthcare products a year to patients and customers.
Quality is at the heart of all activities that support the discovery, supply and marketing of products to our patients and customers. Our Quality Management System (QMS) is a framework to ensure regulatory compliance; assure product safety, quality and efficacy and support continuous improvement.
The QMS is intended to provide the control system for delivery of acceptable, consistent and therefore predictable product quality, network compliance and operational improvement. The requirements in the QMS represent the minimum standard that all sites, companies and functions involved in the manufacture and supply of product must attain.
How is my medicine made?
At GlaxoSmithKline, we supply a wide range of medicines and healthcare products all designed to help people to do more, feel better and live longer.
With millions of patients and customers relying on us every day, those products must be of the highest order. How do we ensure that we deliver a quality item for every one of them?
Take for example a tablet, produced in billions every year by a process that typically comprises seven disciplines:
Dispensing - the ingredients for a batch are precisely weighed out. All of the ingredients we use are also made in factories that meet our exacting standards
Blending - the ingredients are mixed together
Granulation - powders are combined to make granules in preparation for compression
Compression - the granule is pressed into the tablet shape of the correct weight, thickness and hardness
Coating - protecting and sealing the tablet into its finished appearance
Packing - where it’s put into the finished pack.
Laboratory testing - where each batch of product is tested to ensure it meets the exacting specifications registered for each market.
Sounds simple enough, but during the production of each batch of tablets, a multitude of individual quality checks take place during the manufacturing process to ensure that product safety, quality and efficacy meet or exceed the expectations of the Governments, Health Organizations and Regulators whose approval is required before we can supply any new products to markets.
For every batch, operators are issued a document called a Batch Manufacturing Instruction that provides the details on how to perform each and every task in the creation of your medicine. Step by step, each part of the process is documented to ensure quality for patients and customers, compliance for regulators and a continuous improvement culture within our business.
In the case of the quality for tomorrow’s new products in development, we are using novel and innovative technologies and facilities to create a range of products to meet unmet medical needs – but the commitment to quality is unwavering.
That means supplying many development batches in support of our application to supply new medicines to markets around the world; often working alongside those whose approval is required to demonstrate compliance with industry regulations and to further build quality into our processes.
Simply put, our commitment to quality and compliance spans every facet of our operations and is best illustrated by our own company Quality statement:
Quality is at the heart of all activities that support the discovery, supply and marketing of products to our patients and customers.
Quality is critical to building trust with society and, therefore, to our future business success.
Watch a video about how medicines are made.
In October 2010, we finalized a settlement with the US government related to events in the early 2000s at GSK’s former manufacturing facility in Cidra, Puerto Rico.
The corporate integrity agreement we have now entered into with the US government also covers a portion of our manufacturing operations.
The timeline of events related to the former Cidra manufacturing facility are listed here:
March 2005 -- Distribution of Paxil CR and Avandamet tablets cease due to manufacturing process issues at the Cidra facility in Puerto Rico. GSK begins to immediately implement solutions raised by the FDA at Cidra.
April 2005 -- GSK and the FDA sign a Consent Decree.
May 2005 -- GSK retains an independent consultant to assist in complying with the Consent Decree requirements.
2008 -- GSK brings the Cidra facility to a high level of operating performance that satisfies both GSK and the FDA.
2009 – GSK closes the Cidra plant due to declining demand for the medicines made there.
2012 – GSK sells the Cidra facility
Despite advances in healthcare, there are still many diseases that have no cure or for which new treatments and vaccines are needed to prevent transmission or help patients better control their symptoms.
We focus our R&D efforts on areas where there is greatest patient need and where advances in science offer the best opportunities to discover new medicines. Our aim is for new treatments to provide value over currently available treatments to both patients and to payers. In 2011 we spent £4 billion in our search to develop new medicines, vaccines and innovative consumer products.
Patient safety is always our priority. We evaluate the benefits and risks of our medicines at all stages of research and after a new product is approved for sale.
We recognize that there are aspects of our research which can raise ethical concerns, including those relating to animal and clinical research and the use of emerging technologies. We aim to address any concerns by being open about our approach and regularly engaging with academic scientists, regulators, policymakers and other stakeholders.
We are committed to transparency and to disclosing the results of our clinical research. The guiding principle for GSK is to disclose publicly the results of GSK-sponsored clinical research that evaluates our medicines, irrespective of whether the results are likely to be perceived as positive or negative.
All medicines have potential risks as well as benefits, although not everyone who takes a medicine will experience side effects. It is important that we identify, evaluate and minimize safety concerns to ensure that the overall benefits of a medicine outweigh any risks.
Product safety is assessed in clinical trials before a product can be approved for marketing. Sometimes adverse events (possible side effects) may only be detected after approval when a product is being used by large numbers of patients. Policies and a governance framework are in place to help us detect and act on any adverse events. A dedicated team of scientists and healthcare professionals across the world have a specific role to monitor and communicate safety issues to regulatory authorities. We also work with government officials, industry partners and policymakers to enhance safety systems for medicines and vaccines.
Our Global Safety Board makes decisions on product safety issues; its remit is to ensure that safety is a focus throughout product development and to review safety of GSK products on the market. The board is chaired by the Chief Medical Officer and composed of senior physicians and scientists.
We continue to improve our patient safety systems, safety databases and monitoring processes. For example, in 2011 we established a system that provides us with real-time alerts of sudden changes in the number of adverse event reports received each month for a particular product. We also created a Pharmacovigilance Center of Excellence to refine our approaches to medicine safety.
Transparency in Clinical Research
We communicate the results of our clinical research by publishing in scientific journals; presenting results at scientific congresses; and posting information and results on internet-based public registers and databases.
- At the start of a study: We register the research on our publicly accessible Clinical Study Register website, as well as other databases and registers as required by laws and regulations (such as clinicaltrials.gov in the United States). Launched in 2004, our Clinical Study Register receives an average of 9,653 visitors a month. Information available on the GSK site includes protocol summaries for all ongoing studies; and summaries of results from completed clinical studies.
- At the end of the study:
- Disclosure of results: During 2011 we changed our policy on the timing for the disclosure of clinical research of our medicines. Previously we aimed to disclose results summaries from trials of investigational medicines at the time of first approval or following termination of the investigational medicine. We have changed this approach to disclose results following completion of studies rather than following approval or termination of the medicine.
- Scientific publications: GSK made a commitment (in 2009) to seek publication of the results of all clinical research that evaluates our medicines as full papers in peer reviewed scientific journals ; these publications provide peer reviewed context and interpretation of research data. We are putting in place the systems and resources to meet this commitment. We have also committed to disclosing the full protocol for each study when the study is published as a full paper in the scientific literature, so that interested parties can see how the research was carried out.
GSK’s policy prohibits “ghost writing” of journal manuscripts and abstracts by requiring authorship and acknowledgements for scientific publications consistent with the requirements of the International Committee of Medical Journal Editors (ICMJE). GSK or external medical writers are either named as authors or included in the acknowledgement section of manuscripts.
Research with HCPs
GSK conducts clinical trials by working with healthcare professionals who act as investigators for these studies. We have made a commitment to disclose research payments made to healthcare professionals and their institutions.
Our policies require that all clinical trial investigators are selected solely on their qualifications to conduct good quality clinical research, and that their history of using or not using GSK products must not be taken into account.
Payments are governed by contracts and any compensation reflects fair market value for the work performed or services provided. No payments are offered or made to influence investigators’ judgment on enrolment or maintenance of a research participant in a clinical study. Gifts are not permitted to any healthcare professional involved in research projects for GSK.
We have made a commitment to disclose research payments made to healthcare professionals and their institutions. Our first annual disclosure was made in the US in 2011 and captures payments for all phases of medicine discovery and development, including clinical trials. Outside the US, we will disclose payments to healthcare professionals and their research institutions on an aggregate basis, commencing with the publication in 2013 of payments made during 2012.
It is essential that our research and our products meet the needs of patients and reflect the latest scientific thinking. To achieve this, the development of medicines is carried out with discussion and exchange of scientific and medical information between GSK and outside experts and stakeholders. This helps to ensure that our research adds to scientific understanding and advances the care of patients. However, it is important that this legitimate scientific engagement does not and is not seen to have a promotional intent.
In 2011, we developed a new GSK policy and standards to reinforce a clear distinction between this kind of scientific dialogue and promotional activity. These new standards, introduced in April 2011, govern the way we engage in scientific activities, such as advisory boards, publications, scientific congresses and medical education.
The principles reinforce our commitment that the intent and actions of scientific discourse will not stimulate or accelerate demand for GSK products, or gain favour with prospective prescribers or other customers. The principles ensure that GSK’s values of transparency, integrity, respect and patient focus underpin our intentions and actions.
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How Your Medicines Are Made