GSK China Fraud - Tip of the Iceberg

When GSK announced it was setting up R&D in China a bunch of us at GSK US predicted that data from China would be unreliable for various (politically incorrect but accurate) reasons. Didn't expect it to happen this fast. Paper was published in 2010 - must have been one of the first bits of work to come out of GSK China.

So predictable.

Those of us who have some interaction with GSK China have seen numerous examples of shoddy and questionable work.

Will GSK pretend this is an isolated case and keep the Titanic on course to the next iceberg or will it get the message and retreat before deaths occur. Answer is obvious.

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GlaxoSmithKline Fires China R&D Boss for 'Misrepresented' Data

Published: Tuesday, 11 Jun 2013 | 6:35 PM ET
By: Dan Mangan
A worker in vaccine production at drugmaker GlaxoSmithKline in Saint-Amand-les-Eaux, France.
GlaxoSmithKline has dismissed its head of research and development in China after an email tip prompted an investigation that determined data used in a 2010 research paper were "misrepresented," the company said.

The drugmaker also accepted the resignation of a co-author of the paper on multiple sclerosis, which was published in Nature Medicine, and placed three other employees in China on administrative leave pending a review.

GSK now wants the disputed paper, which dealt with the possible role of the molecule interleukin-7 as a risk factor for MS, to be retracted by Nature Medicine. But it is unclear if the two terminated researchers will sign agree to that request.

"We are committed to the highest ethical and scientific standards, and regulators, physicians and patients can have confidence in the research we carry out," GSK said in a statement.

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The study was led by Jingwu Zang, senior vice president and head of the R&D center's department of neuroimmunology in Shanghai. The paper's top author was GSK researcher Xuebin Liu.

Zang, who had held the job since 2007, has been fired; Liu resigned in light of questions about the data.

Their paper claimed that research had "found data suggesting that the signaling molecule interleukin-7 caused a subset of T-cells .... taken from people with multiple sclerosis to multiply," according to the Nature Medicine blog Spoonful of Medicine. The blog pointed out that the finding corresponded with research that some people might be at higher risk of MS as a result of genetic differences in that molecule's cell receptor.

The paper had remained unquestioned until "several weeks ago," when a tipster contacted GSK and suggested that there were problems with the study, GSK spokeswoman Melinda Stubbee told CNBC.

"It was an email," Stubbee said. "The information was given to us anonymously."

GSK's subsequent probe discovered that the data that purportedly was based on blood samples from people with MS had either come from "normal, healthy donor samples," or from sources that "can't be documented at all," Stubbee said.

"The integrity of our research is critical to our work, and when these allegations came to light we immediately contacted the journal to tell them we were taking the charges seriously and would be investigating thoroughly," GSK said in its statement.

"Regretfully, our investigation has established that certain data in the paper was indeed misrepresented," GSK said.The U.K.-based company noted that "the published study was from pre-clinical, early-stage research and did not directly involve patients."

(Read More: China Downturn Might Be Most Drawn Out)

Zang told Spoonful of Medicine that he was "shocked" and "disappointed" by his termination. "I was never involved in any data fabrication," he told the blog. "I'm not saying I'm free of any responsibility. ... I'm a senior author. For that I should accept certain responsibility ... but not as currently accused."

Liu told the blog that the disputed data were incorrectly described in the study because there was "a rush" to complete it, and he had forgot to update the document when it was submitted. He also said that Zang did not realize the errors or participate in analyzing the data.

—By CNBC's Dan Mangan. Follow him on Twitter @danpostman.

 

GSK has sent Sir Richard Lunney to Shanghai to clean up the mess. He will start getting results in the next 6 months.

 

Who is Sir Richard Lunney? What might his qualifications be? Or is he just a spokesperson handpicked by Sir Andy in an attempt to bring British English to China?

 

Sir Richard Lunney, known as "Rico" to his friends, is Eighth Earl of Starchbottom, Second Duke of Whodafukcares, and a typical in-bred, milktoast, spineless, humourless, talentless Brit.

 

And what does he know about business, more specifically, the pharmaceutical business and R&D? Is he being sent to sort out the recent bribing and kickback mess in China, or the R&D problem?

 

GSK upper management is to blame. They (Witty et al) are incompetent, and only are interested in making money for themselves while looking good in the small world of British hierarchy. See below:


GlaxoSmithKline's China troubles not going away anytime soon


POSTED: Thursday, July 11, 2013, 7:15 AM

David Sell

China's Security Ministry said Thursday that several GlaxoSmithKline executives based in the country had confessed to charges of bribery and tax law violations, Reuters reported. Link here.

The bribes were offered to Chinese government officials, medical associations, hospitals and doctors to boost sales and prices, the ministry said in a statement on its website, according to Reuters.

GSK declined to comment on the number or nationality of the staff members involved.

"We take all allegations of bribery and corruption seriously," GSK said in a statement. "We continuously monitor our businesses to ensure they meet our strict compliance procedures - we have done this in China and found no evidence of bribery or corruption of doctors or government officials."

GSK is based in London, but has operations at Philadelphia's Navy Yard and in the region's suburbs.

Some of the trouble relates to sale of Botox, the skin enhancement medication. Allergan makes Botox and in 2005 struck a deal with GSK to market the drug in China.

 

Sir Richard is a pasty Brit but claims to have eaten his share of Ramen noodles in college and feels that his extensive supply chain experience under the watchful of Janet has positioned him to prevent further corruption.

You should be supportive of this initiative because it is going to be the biggest brown paper exercise you've ever seen. Perhaps they will reserve a conference room large enough for 5 people to attend and get someone from IT to get a projector.

 

Oh, a Witty synchophant.

 

Witty and the top executives did not know anything, like Sgt Schultz "I Know Nothing". He accepts not responsibility or accountability. But if something like this happened in my line, I'd be expected to take accountability, since that is what the "leader" does.

Witty is simply not a credible leader. He's only out to protect himself and those directly around him as a way to give extra buffer to his lack of involvement & knowledge. The whole thing is just like the games that went on at News Corp. it's the British way in being "elite".

Witty needs to take accountability, or be fired by the Board. But that will never happen since members of the board were put there by....Witty himself. So much for protection of corporate function and integrity.

 

GSK's last big legal blunder in U.S. resulted in the Cooperate Integrity Agreement which has simply imposed layer upon layer of additional training, documentation, guidance documents, My Learning training requirements etc for people who had nothing to do with crimes.

So silly, none of GSK's past criminal acts were due to lack of training or guidance documents etc. Just greed, plain and simple. GSK can't 'educate' slimy execs into having good values.

The big wigs deliberately break the rules to pump up sales and the rest of us get stuck with increased documentation/training burden.

Thank you very much slimy execs for making everyone's job more difficult.

I'm waiting to see if FDA makes any connections between GSK's latest crimes in China and GSK's promises (in the corp integ agreement) to clean-up our act in the U.S. FDA could drop the hammer real hard if they view GSK's sleazy actions in China to be indicative of GSK's lack of commitment to honor the terms of the corp integ agreement in the U.S.

Stay tuned, this could get real ugly, real fast.

 

Ms. "Wang" says.....

Chinese police allege Glaxo sales reps trained to offer sexual bribes

Chinese police have released new details of GlaxoSmithKline’s alleged crimes in China, claiming that sales representatives were given “clear directives” to offer bribes to doctors and were trained to cater “to their pleasures.”

Chinese police allege GSK sales agents offered sexual bribes

Xinhua reported that a woman, named as Ms Wang, said she would even go so far as fulfilling some doctors’ “sexual desires” in order to “meet their needs” and persuade them to prescribe more drugs. Photo: Reuters

By Tom Philips, in Shanghai 1:01PM BST 26 Jul 2013

GSK sales reps “established good personal relations with doctors by catering to their pleasures or offering them money, in order to make them prescribe more drugs,” China’s official news wire Xinhua reported on Friday.

Citing police investigations, Xinhua quoted a 35-year-old female “medical representative” who reportedly worked for a GSK regional sales manager named only as Mr Li.

The woman, named as Ms Wang, said “some executives gave clear directives to the sales department to offer bribes to doctors with money or opportunities to attend academic conferences.”

Ms Wang said she would even go so far as fulfilling some doctors’ “sexual desires” in order to “meet their needs” and persuade them to prescribe more drugs.

A doctor from a “reputable hospital” whose real name was not given, claimed that one GSK representative had “blatantly offered kickbacks to doctors”.
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“For example, 20 yuan [£2.11] for each pack of Seretide, an asthma-treating inhaler; and 10 yuan [£1.05] for each dose of Flixotide, an asthma-treating spray.”

If a doctor appeared reluctant to accept cash, GSK “salespeople” would offer them “gifts, free travel after meetings and lecture fees.”

“In fact, many doctors received lecture fees even when the lectures did not exist,” Xinhua reported.

The state-run news agency claimed that a cut of between seven and ten percent of prescribed drugs went directly into “doctors' personal accounts”.

A spokeman for GSK said: "As we have previously said, we are deeply concerned by allegations of fraudulent behaviour and ethical misconduct by individuals in our China business

"We have zero tolerance for any kind of corrupt behaviour amongst our employees, suppliers and business partners and will take action wherever and whenever we find it

"This behaviour is a clear breach of GSK's systems, governance, values and standards

"We will continue to cooperate fully with the Chinese authorities in their investigation and take any and every action that is required."

On Wednesday, the company’s chief executive, Sir Andrew Witty, conceded that “senior figures” in GSK’s China business might have been engaged in “inappropriate and illegal” behavior. Sir Andrew described the allegations as “shameful”.

The scandal erupted in early July when police officials said that during a six-month investigation they had turned up evidence that GlaxoSmithKline had behaved like a criminal “godfather”.

The company had used hundreds of middlemen to channel money to doctors and health workers in order to convince them to prescribe their drugs, it was claimed.

Chinese police alleged that GSK had used travel agents to distribute as much as £323m in kickbacks, bribing “without restraint government officials, drug associations, medical foundations, hospitals and doctors.”

The British director of GSK's operations in China, Mark Reilly, left China on July 5 and has now been replaced by Herve Gisserot, who previously headed its pharmaceutical operations in Europe. Four Chinese GSK executives have been detaine

 

What did Ms. Wang say?

[wait for it.......]

 

Ms Wang apparently reached out to Dr Wei Hun Lo for help in growing prescriptions in the Beijing area. Dr Swa Lo worked with Dr Fuc Yo Ma in organizing a patient care group that was a front for the travel related cash. Ms Wang has confessed.

 

You buy GSK products. Me love you long time.

 

GSK-China: Even worse testing in humans without appropriate animal data!!!

Wall St. Cheat Sheet » Consumer Business »

What Else Has GlaxoSmithKline Done Wrong in China?
By Jacqueline Sahagian | July 23, 2013

British pharmaceuticals company GlaxoSmithKline (NYSE:GSK) has admitted to, and apologized for, bribery charges against the company’s Chinese sales operations, but a new report from the New York Times suggests the corruption could have reached Glaxo’s research operations in Shanghai as well.

Glaxo has been charged by Chinese authorities for bribing doctors with cash and sexual favors, in exchange for prescribing the company’s drugs. China’s Ministry of Public Security has been working to crack down on bribery within the country’s hospital system — since doctors in China are often over-worked and under-paid, many rely on bribes to supplement their incomes.

The company’s head of emerging markets, Abbas Hussain, released an apology on behalf of the company, and promised Glaxo would cooperate with the Chinese investigation.
But the New York Times investigation has taken the allegations against Glaxo’s Chinese operations a step further. Critical problems have been found with the way Glaxo’s research facility in Shanghai conducts its operations, and the paper claims Glaxo has known about those issues for two years. According to a confidential document seen by the New York Times, an internal audit revealed that Glaxo’s research team in Shanghai was not keeping records adequately, a failing that led to drugs being tested on humans before animal testing was completed.

It’s crucial that animal studies be completed and reported to determine risks before human testing begins, and according to the report, six animal studies on the multiple sclerosis drug ozanezumab were not reported before human testing on the drug started. One medical ethicist interviewed by the Times said, “If that’s true, it’s a mortal sin in research requirements.”

The audit also found that documentation throughout the research facility had not been carried out properly. Patients undergoing testing didn’t fill out consent forms, their drug dosages weren’t documented, and records weren’t kept if patients returned for follow-up.

In addition, the audit pointed to inappropriate payment methods made to the people overseeing the company’s trials in hospitals and clinics, extending the reach of Glaxo’s bribery charges to its research division. The report said it saw a “reputational, financial, and/or regulatory action risk where payments made to investigators regardless of actual work completed are perceived as bribery or corruption.”

Some have given Glaxo credit for conducting internal audits at all, but the ethics violations seen at the research facility in Shanghai have raised the broader question of how cheaper medical research conducted in emerging markets like China can and should be monitored.

 

GSK China dragon wings clipped - assimilated into the hive

Looks like the entire China organization has been stripped of its autonomy. Now all departments/divisions with GSK China will report through usual global organisations (PTS, etc).

Obviously trying to inject "GSK culture" (ha ha ha) into GSK China.

I give GSK credit for attempting to take corrective action.

 

Re: GSK China dragon wings clipped - assimilated into the hive

I also give GSK full blame for the insane China experiment (high-pressure goals / hands-off oversight) that blew up in their face.

 

China exit strategy & ChinApocalypse

1. Not surprisingly U.S. & U.K. regulatory agencies are closely following GSK's ChinaGate which is rapidly spiraling into ChinApocalypse. Independent pharmaceutical law expertss are now saying that GSK's actions in China will expose GSK to criminal investigations in U.S. & U.K. [British Empire crumbling again?]

2. In an attempt to avoid disaster in US & UK (which I don't we can) GSK is naively considering pulling out of China. As if that will make problem go away.

Meanwhile, Mark Reilly, the British head of GSK China, is still hiding out in London.

Hey Andy! Exactly which GSK Value covers hiding from law enforcement agencies?
Answer: Greed and Self-Preservation.

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GSK: In or out of China?
http://www.bbc.co.uk/news/business-23980221

For most multinational companies, it is a no-brainer (to use the hideous corporate cliché) that they have to be big in China, if their global ambitions are to be taken seriously.

But at GlaxoSmithKline (GSK), executives are beginning to wonder whether the costs of being in the world's second biggest economy may soon outweigh the long-term growth prospects.

How so?

Well I have learned that there are two sources of concern for the giant British pharmaceutical company, and they both stem from the investigation by Chinese police into how travel agencies were allegedly used to channel up to £320m of bribes to doctors and officials.
The first problem is that GSK's sales of pharmaceuticals and vaccines in China - which were £750m last year - have been badly affected by the taint of the investigation.

I am told that GSK will soon have to evaluate whether the infrastructure of generating sales in China is affordable, if there is no assurance of a return to business as usual.
Perhaps more worrying for the company are the noises coming out of China on what the authorities there would want and need in order to draw a line under the affair.

In that context, a report earlier this week from the official Chinese news agency, Xinhua, was relevant and resonant.

Xinhua said: "It is becoming clear that it [the bribery] is organised by GSK China rather than... sales people's individual behaviour."

GSK accepts that individual employees may have behaved inappropriately in China, but it has consistently denied that they were acting on instructions from the company - and it continues to deny corporate involvement in the alleged wrongdoing.

So what it will not and cannot do, I am told, is accept corporate liability for the alleged bribery, as the price of reaching a settlement with the Chinese authorities and resuming normal trading there.

In part it cannot do this because it would then face the risk of having to pay enormous fines in the US and the UK, both of which have strict anti-bribery laws.

So the cost for GSK of refusing to plead guilty, as a company, may be a withdrawal from what many would see as the most important market in the world.

 

That's just great. Come on leadership... pull it together. Stop making stupid decisions.

 

They can't stop making bad decisions since they don't know better.

In order to make better decisions, they'd need to understand the business of drug R&D, politics, regulations, cultures like China, and even the hyping of biotechs with less than nothing of value in their notebooks.

But, they certainly are very good at cutting staff to cut cost, decreasing travel budgets to save expenses (which really is trivial for most depts in the big scheme of things, and to eliminate promised and future benefits to employees.

No loyalty to the employees, why should employees show loyalty to management and GSK?

Those days are certainly done.