Entries in Glaxo (10)
As we said, two FBI agents at an international law enforcement conference last week said several U.S. public companies are being investigated for bribery in Indonesia.
The White Collar Crime Prof Blog reported the acquittal of the former associate general counsel of GlaxoSmithKline, Lauren Stevens.
Maybe it's the season -- leaves opening on the trees, blossoms everywhere filling the air with a sweet spring smell, cool mornings and warm afternoons in central Virginia.
The former associate general counsel of GlaxoSmithKline who won dismissal without prejudice of an obstruction and false statement indictment last month has been reindicted.
As reported today by Ellen Podgor on the White Collar Crime Prof Blog, the case against GlaxoSmithKline's former VP and associate general counsel has been dismissed without prejudice.
There's an FCPA storm swirling around the drug makers. What will happen next?
In its quarterly report released August 9, SciClone Pharmaceuticals, Inc. said it received an SEC subpoena and a letter from the DOJ investigating the "sale, licensing and marketing of its products in foreign countries, including China."
According to SciClone, the DOJ said it was looking at FCPA issues in the pharmaceutical industry generally, and had received information about SciClone's practices suggesting possible violations.
A reader was curious about the timing of SciClone's announcement. Less than a month ago, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act. It authorizes payments of 10% to 30% for recoveries of at least a million dollars based on information about violations of the securities laws, including the FCPA.
So we asked SciClone if the FCPA investigation was triggered by a recent whistleblower complaint. Ana Kapor, the firm's director of investor relations and corporate communications, answered quickly but said only: "We are not able to comment on this topic beyond what we included in our filings earlier this week."
Is this the first FCPA-related whistleblower case under the new reward program? Or is it, as most assume, part of the year-old investigation of drug makers that already targeted GlaxoSmithKline, AstraZeneca, and Merck? Or is it both? There's no way to tell until someone involved goes on the record.
SciClone Pharmaceuticals, Inc. trades on NASDAQ under the symbol SCLN.
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A slice of the FCPA pie. In his August 16 article about FCPA-related civil suits, Forbes' Nathan Vardi correctly says there's no private right of action under the FCPA. So plaintiff lawyers look for other ways to sue directors and officers for their company's overseas bribery.
Results of the suits have been mixed but some have produced big settlements. He lists Faro Technologies, which paid $6.9 million; Nature’s Sunshine, which paid $6 million; Immucor, $2.5 million; and Syncor, $15.5 million. And he says plaintiff lawyers are prowling for more targets by following SEC and DOJ leads -- including Weatherford International, Parker Drilling, Avon Products, and Pride International.
Ther article is Plaintiff Lawyers Join The Bribery Racket.
From an August 19 AP story: Drugmaker GlaxoSmithKline used a sophisticated ghostwriting program to promote its antidepressant Paxil, allowing doctors to take credit for medical journal articles mainly written by company consultants, according to court documents obtained by the Associated Press.
The AP story here said drug companies often hire outside firms to "draft a manuscript touting a company's drug, retain a physician to sign off as the author and then find a publisher to unwittingly publish the work." It added that doctors eagerly participate because publication credit increases their prestige and professional standing. For their part, the drug-company salespeople "often present medical journal articles to physicians as independent proof that their drugs are safe and effective."
This is the FCPA Blog so let's ask the question: Could a drug-company's ghostwriting program violate the Foreign Corrupt Practices Act?
We think so.
The FCPA's antibribery provisions prohibit among other things (1) giving anything of value (2) to a foreign official (3) to secure any improper advantage. See, e.g., 15 U.S.C. §78dd-1(a) [Section 30A of the Securities & Exchange Act of 1934].
So. . . . .
(1) Anything of value? Producing high-level research and publishing the results in a reputable professional journal is hard work and a rare event for most people. As the AP story says, publishing papers always enhances the author's professional reputation. So an unsigned research-based manuscript of publication quality that a doctor can call his or her own is as good as gold. Strike one.
(2) Doctors working in government-owned or managed hospitals overseas are "foreign officials" under the FCPA. Strike two.
(3) Medical-journal articles that tout a drug and falsely appear to be written by independent doctors can easily secure an unfair advantage for the company and its product. In fact, that's the whole idea. The AP story says Glaxo's ghostwriting program, according to an internal memo, was designed to "strengthen the product positioning and overcome competitive issues." An unfair advantage it is. Strike Three.
And that's how a drug company's ghost-writing program could violate the Foreign Corrupt Practices Act. Will there ever be an enforcement action based on one? Who knows?
Final notes: GlaxoSmithKline has never been accused of violating the FCPA (or apparently any other law) because of its ghostwriting program. A spokesperson for the company said the program mentioned in the AP article "was discontinued a number of years ago." Paxil, the drug promoted by the program, is the subject of wrongful-death lawsuits that allege the company downplayed risks associated with the drug, including increased suicidal behavior and birth defects.