GlaxoSmithKline: 3 Billion Dollar Lawsuit (July 2012)

Based on a paper by: Chris Bohnwagner
Summary by: Chris Bohnwagner
April 15th 2013


GlaxoSmithKline is one of the leading pharmaceutical companies in the world. They are headquartered in London but they sell their products all over the world. In 2012 GSK agreed to plead guilty to three criminal counts. Two counts of introducing misbranded drugs Paxil and Wellbutrin, and one count of failing to report safety data about the drug Avandia to the Food and Drug Administration. GSK paid a settlement of 3.5 billion dollars to support the criminal and civil charges. GSK had attempted to influence doctors by bribing the doctors so in turn the doctors would use their medications. They also claimed that GSK had aimed at promoting the use of the drug Paxil in children by helping to publish a medical journal article that misreported data from a clinical trial. GSK was falsely advertising many of their products by leaving out or adding in false information. One of their products Avandia (diabetes medication) was linked to an increase in heart attacks and congestive heart failure; they had illegally marketed Avandia by paying doctors, and manipulating medical research to promote the drug. Also Paxil (antidepressant) was not approved for patients under 18, but GSK illegally marketed the drug for use in children and teens. GSK also used the help of PR firms and the appeal of lavish vacations to convince medical professionals to prescribe the antidepressant Wellbutrin for weight loss, sexual dysfunction, drug addiction and ADHD, even though the drug is FDA approved only to treat depression. GSK had committed multiple acts of unethical behavior. 

The stakeholders that were involved with this case were consumers, upper management, doctors subscribing the medication, and stockholders. The consumers are very negatively affected because they are taking the medication that is potentially life threatening, they also could have been taking medication that was not effective. Upper management is almost directly responsible for all the illegal actions that took place because they are the ones that made the calls to withhold information and engage in illegal activities knowingly. The doctors were affected because they were prescribing this medication and this medication was potentially harmful to people, some of the doctors who received bribes from GSK also lost their medical license. Then the stockholders were also affected because of the 3 billion dollar payout and the lost of reputation for GSK heavily affected their stock which resulted in a lost in money for stockholders.

In contrast to the ethical theories, Individualism, Utilitarianism, Kantianism, and Virtue Theory. GlaxoSmithKline violated all of the ethical theories because of their illegal and potentially life threatening medicine they produced. Individualism believes that the company should focus on profits while staying within the boundaries of the laws. GSK was focused on creating as much profits as possible they did not remain within the legal systems. They were selling their products illegally and this resulted in the 3.5 billion dollar settlement. They knew of these actions they were taking and new that they were illegal but they still took park in these activities. GSK violated this theory due to the fact that they ignored all know regulations in their production and marketing of their products. Utilitarianism believes that you should try to maximize overall happiness within all stakeholders. in the case of GSK, they were selling their medications to millions of people, but they had illegally marketed some of their products and also withheld crucial information about Avandia which was linked to an increase in heart attacks. This violated utilitarianism because in doing so they did not raise overall happiness they were only concerned with the happiness of the company which was about making profits. All of their customer’s happiness was reduced because they were giving them potentially life threatening medication and also the consumer was buying their medication for conditions it was never designed to treat. GSK clearly violated this theory because they reduced the overall happiness for its stakeholders from its actions. Kantianism theory believes that all actions are performed in accordance with some underlying principle. Kant's ethics are founded on his view of rationality as the ultimate good and that all people are fundamentally rational beings. GSK was not allowing the consumer to make a rational decision because for two of their products Wellbutrin and Paxil they were giving the consumer false information. This was to mislead the consumer to buy their medication; this violated Kant’s theory because they were then unable to make a rational decision. GSK took advantage of people that were using medication and lied to them about the benefits of their medication. They also harmed thousands of people through Avandia which was linked to an increase in heart attacks, this showed that they were not focused on the people at all. GSK clearly violated Kant's theory because of their disregard for people. The virtue theory involves staying true to your virtues such as honesty, courage, temperance, and justice. These are the main virtues that this theory believes in.  

Also in the virtue theory they urge you to stay away from the vices which are greed, envious, gloomy, arrogant, and selfishness. GSK acted in greed because they were trying to maximize profits no matter what, they knew that their drugs were harming people and falsely advertised but if they pulled the drug they would have lost a lot of potential income. They showed they had no honesty because they had lies to their consumers and withheld crucial information to them. They also had no courage to pull their medication once they knew that it was linked to heart attacks which would have been very ethical if the company had did so. They showed no temperance because they had all their motives on profit as fast as possible with no regard for their consumers. GSK has clearly violated this theory because of their inability to stay true to their virtues and acted with vices. 

GlaxoSmithKline has acted in multiple unethically activities, they have taken advantage of their customers and put their lives at risk because of their greed and focus on profit. In the future GSK will hopefully avoid this illegal actions and realize that being ethical can actually be more profitable because of the great image that goes along with it. 

References:
Sifferlin, Alexandra, and Alexandra Sifferlin. "Breaking Down GlaxoSmithKline’s Billion-Dollar Wrongdoing | TIME.com." Time. Time, n.d. Web. 09 Apr. 2013. <http://healthland.time.com/2012/07/05/breaking-down-glaxosmithklines-billion-dollar-wrongdoing/>

Ingram, David. "GlaxoSmithKline Settles Healthcare Fraud Case for $3 Billion." Reuters. Thomson Reuters, 02 July 2012. Web. 09 Apr. 2013. <http://www.reuters.com/article/2012/07/02/us-glaxo-settlement-idUSBRE8610S720120702>

Faris, John. "Glaxo SmithKline Pays $3 Billion in Lawsuit : Home : Lawyer Herald."Lawyer Herald RSS. Herald, n.d. Web. 09 Apr. 2013. <http://www.lawyerherald.com/articles/1654/20120702/glaxosmithkline-drug-lawsuit-federal-fraud-healthcare-british-pharmaceutics-fda-avandia-paxil-wellbu.htm>

Adelson, Jeff. "Greater New Orleans." The Times-Picayune. Nola-Greater New Orleans Area, n.d. Web. 09 Apr. 2013. <http://www.nola.com/politics/index.ssf/2013/02/louisiana_attorney_general_fil.html>