February 24, 2020

Glaxo Chief Executive Addresses China Probe

The remarks, made during a conference call on the company’s second-quarter earnings, were the most extensive Mr. Witty has made about the scandal that his company is facing in China, where authorities have accused executives of using travel agencies to funnel illegal payments to doctors and government officials.

“I am very personally disappointed with these allegations that have been made,” Mr. Witty told reporters. “Clearly they are shameful allegations if they are true.”

He revealed few new details about the investigation, but said that the company was working with the Chinese government and that it has “opened up channels” with the British and United States governments. The company disclosed in 2010 that the United States was investigating Glaxo for possible violations of its overseas anti-bribery laws.

Mr. Witty said the ongoing Chinese investigation was likely to affect sales in the country but said it was too early to know specifics. “We continue to see the country as a key place for further investment,” he said.

The company posted second-quarter net income of 1.05 billion pounds, or $1.67 billion, on revenue of 6.62 billion pounds. That was a decrease from net of 1.24 billion pounds in the same quarter a year ago, but sales were up from 6.46 billion pounds last year.

Mr. Witty also sought to distance the company’s London headquarters from the scandal, saying that the central office “knew nothing” about the alleged fraud and that the executives accused of wrongdoing operated outside the company’s normal surveillance systems.

Since taking over as chief executive in 2008, Mr. Witty has tried to promote the company as a leader in ethical and transparent behavior. In 2012, Glaxo agreed to pay a fine of $3 billion to settle charges in the United States that it had improperly promoted its antidepressants and failed to report safety data about the diabetes drug Avandia

“To be crystal clear, we have zero tolerance for this kind of behavior,” Mr. Witty said. “I can assure you we are absolutely committed to rooting out corruption and we are also absolutely committed to getting to the bottom of what has happened here.”

The company’s response to the crisis has evolved considerably since reports of bribery first surfaced a few weeks ago. Glaxo officials initially stood by statements that the company had not engaged in wrongdoing, saying it had investigated the claims and found them to be without merit.

But it changed its tone after Chinese investigators raided company offices, detained four executives and went public with unusual detail about the practices they had uncovered. Mr. Witty dispatched top management to China to meet with investigators, and he acknowledged that some of the executives there may have broken the law.

Meanwhile, the inquiry has expanded to include other pharmaceutical companies. On Tuesday, AstraZeneca said some of its employees had been questioned in Shanghai, and Merck and Roche acknowledged over the weekend that they had used the same small travel agency that has been implicated in the Glaxo investigation.

Article source: http://www.nytimes.com/2013/07/25/business/global/glaxo-chief-executive-addresses-china-probe.html?partner=rss&emc=rss

Scandal Widens Over French Weight-Loss Drug Mediator

PARIS — In 33 years on pharmacy shelves here, the diabetes drug Mediator was prescribed to an estimated five million French patients, many of them diabetics, many others hoping simply to lose weight. When French authorities ordered the drug off the market in 2009, alerted to possible cardiovascular risks, there were 300,000 active prescriptions.

Mediator and its enigmatic French manufacturer, Laboratoires Servier, a privately held company with a troubled past, find themselves at the center of France’s largest public-health scandal in at least a decade. Health officials estimate that as many as 2,000 people died, with thousands more hospitalized, victims of cardiac valve damage and pulmonary hypertension apparently linked to the drug.

Politicians and the press have pilloried Servier, charging that it concealed the dangers of Mediator for decades and insisting that the company has a wider history of disregarding health concerns about its products. Many have noted that two Servier weight-loss products, both closely related to Mediator, were at the center of the fen-phen scandal of the late 1990s in the United States.

In France, government investigators have accused Servier of licensing Mediator as a diabetes drug to avoid scrutiny, but urging doctors to prescribe the pills as a diet aid to bolster sales — a practice that greatly expanded the pool of those potentially harmed by the drug. Magistrates are investigating the company on charges of consumer fraud and manslaughter, and a public prosecutor has charged Servier with defrauding the French health care system. Trials are expected next year.

There are broader implications, as well. Drug makers have long viewed France’s pharmaceutical oversight apparatus as being relatively permissive, in particular as compared with the United States Food and Drug Administration, which industry and some patient groups criticize as overly cautious. French political leaders say that the Mediator scandal has exposed the failings of the country’s regulatory system, which they have described as rife with conflicts of interest and marked by a distinct apathy toward questions of public health.

The head of the French regulatory body, known by its acronym Afssaps, resigned this year, and French senators approved a package of reforms in October.

“We want there to be a ‘before’ and ‘after’ as regards Mediator in our country,” said Health Minister Xavier Bertrand, addressing the Senate.

Servier says it did nothing wrong and has insisted that the discovery of the dangers of the drug, also known as benfluorex, depended in part upon recent advances in echocardiography.

“I don’t see at what point Mediator could have been caught sooner,” said Lucy Vincent, a spokeswoman for Servier.

The withdrawal of Mediator from the market in 2009 — it was then available in France, Luxembourg and Portugal — caused little stir. Only the following year, with the publication of a book titled “Mediator 150 mg: How Many Dead?” did the news media and government officials take serious note.

“I realized they were withdrawing the drug on the sly,” said the book’s author, Dr. Irène Frachon, a pulmonologist. Servier and the health authorities made little effort to alert former patients, she said, like “a car manufacturer who sees there’s a defect in the brakes of its car, and who corrects the defect in its production line but doesn’t warn the people who have the car.”

In 2007, Dr. Frachon was among the first to identify the apparent risks of Mediator. Her book prompted lawsuits, public outcry and a government inquiry.

In January 2011, the interministerial commission leading the inquiry charged that Servier had deceived health authorities and patients in order to keep Mediator on the market.

But in their report, investigators also wrote that health officials had ignored a series of warning signs beginning a decade before. They additionally found that regulatory decisions taken by the Afssaps, the drug licensing agency, were in fact a “co-production,” reached in “cooperation” with drug makers.

At the Afssaps, voting members of the approval committee have long served simultaneously as consultants or employees of the pharmaceutical firms they are meant to regulate, officials acknowledge. And while members are expected to declare conflicts of interest, there are no penalties for not doing so. Consultants or employees from various companies, including Servier, remain active participants even now, according to Ms. Vincent, the Servier spokeswoman.

In America Food and Drug Administration restrictions on conflicts of interest are more rigorous, French and American health officials say. Failure to report a conflict of interest is a crime.

Article source: http://www.nytimes.com/2011/12/12/health/scandal-widens-over-french-weight-loss-drug-mediator.html?partner=rss&emc=rss