Glaxo Lawyer Indicted For Obstructing The FDA
23 CommentsBy Ed Silverman // November 9th, 2010 // 10:37 am
Lauren Stevens, a former Glaxo attorney, has been charged with one count of obstructing an official proceeding, one count of concealing and falsifying documents to influence a federal agency, and five counts of making false statements to the FDA, according to an indictment issued by the US Justice Department. The feds note Stevens is based in Durham, North Carolina, where GlaxoSmithKline has offices and a Lauren Stevens is listed as a vp and associate general counsel on LinkedIn (see this). We await comment from Glaxo. UPDATE: A Glaxo spokeswoman confirms Stevens was its employee, but is now retired.
This marks one of the rare moments when the federal government seeks to prosecute an executive in connection with off-label marketing. Although the feds have negotiated eye-popping settlements with various drugmakers, some of which have also pleaded guilty to misdemeanors or felonies, none of these recent deals included charges against individuals. Consequently, there are now efforts under way to ban healthcare execs found guilty of fraud from doing business with federal healthcare programs (see this).
The indictment states that in October 2002, the FDA asked for info about promotion of a prescription drug, as part of an inquiry into off-label marketing. UPDATE: In March, Glaxo disclosed in a filing with the Securities and Exchange Commission (see page 173) that the feds inquired about its response to an October 2002 letter from the FDA’s Division of Drug Marketing, Advertising and Communication requesting info about the alleged off-label promotion of Wellbutrin SR.
The feds charge that, in response to the FDA inquiry, Stevens signed and sent a series of letters from the drugmaker to the agency falsely denying off-label promotion took place, even though she knew, among other things, that the drugmaker had sponsored numerous programs where the drug was promoted for unapproved uses (you can read the indictment here).
The feds go on to say Stevens knew numerous docs had been paid to give promotional talks to other docs that included info about unapproved uses. In one example, a doc was paid to speak at 511 promotional events in 2001 and 2002, while another spoke at 488 events during that period. The docs, however, are not named. Meanwhile, Stevens allegedly did not provide the FDA with slide sets used by the paid docs, even though the FDA asked for the slides and Stevens previously promised to send them along.
And this is interesting: The feds allege a legal memo was prepared for Stevens that spelled out “pros” and “cons” of sending the slides to the FDA. One negative: the slides would provide “incriminating evidence about potential off-label promotion of (the drug) that may be used against (the company) in this or in a future investigation.” so instead of providing the slides, Stevens offered that the company’s responses to the FDA’s requests were “final” and “complete.”
Each of the obstruction charges carries a maximum penalty of 20 years in prison, while each false statement count carries a maximum penalty of five years in prison. The drugmaker is not being charged with a crime.
“There is a difference between legal advocacy based on the facts and distorting the facts to cover up the truth,” Carmen Ortiz, US Attorney in Boston, says in a statement. “Federal agencies such as the FDA cannot protect the public health if the entities and individuals they regulate provide false information and conceal the true facts.”
“This indictment shows that we will investigate those responsible for unlawful acts done on a company’s behalf. When individual employees are identified, they will be held accountable for their illegal activity. Individual employees now know that concealing information from the government, obstructing investigative activity and making false statements to federal investigators will be investigated and prosecuted,” says Richard DesLauriers, Special Agent in Charge, FBI, Boston Division, in the same statement.
UPDATE: Brien O’Connor, Stevens’ attorney at Ropes & Gray, sends us this statement: “Lauren Stevens is an utterly decent and honorable woman. She is not guilty of obstruction or of making false statements. Everything she did in this case was consistent with ethical lawyering and the advice provided her by a nationally prominent law firm retained by her employer specifically because of its experience in working with FDA. She looks forward to the day when a judge and jury can hear the true facts in this case, which will show that she has done absolutely nothing wrong.”
MsPiggy
I must wonder how many Big Pharma executives are filling their off shore bank accounts, and moving to countries with no extradition treaties this morning…
This will be a landmark prosecution worth watching very closely, which could begin to shake the foundation of the pharmaceutical industry to it’s very core…
Reality
This event is landmark and should shake the pharmaceutical industry to its’ very core. I believe that for years employees of these companies have been obstructing justice. They employ teams of lawyers and squads of compliance officers to place higher and higher hurdles in front of investigations. The culprits have hidden behind their corporate towers, but perhaps this will stop and justice will be served. There are hundreds more out there who have conducted themselves in very questionable ways. It’s now time for them to be held accountable for their actions. The countless cover-ups should be exposed for all to see.
Jack Friday
http://pharmagossip.posterous.com/ropes-gray-steptoe-representing-gsk-in-house
BREAKING: Ropes & Gray, Steptoe Representing GSK In-House Lawyer Charged by Feds
Posted by Brian Baxter
Lauren Stevens, vice president and associate general counsel at GlaxoSmithKline in Raleigh-Durham, has been charged by federal prosecutors with obstruction of justice and making false statements during an FDA probe into the company’s promotion of a prescription drug.
The Justice Department announced Stevens’s indictment on Tuesday in Washington, D.C., although the charges against the GSK in-house lawyer were filed in U.S. district court in Maryland, where the FDA is based. The case is being prosecuted by the U.S. attorney’s office in Boston and the civil division’s office of consumer litigation at Main Justice.
Ropes & Gray litigation partners Brien O’Connor in Boston and Colleen Conroy in Washington, D.C., are representing Stevens along with Steptoe & Johnson partners Reid Weingarten and William Hassler. A call to GSK was also not immediately returned.
Prosecutors allege that Stevens impeded an FDA inquiry in 2002 into unapproved uses of an unnamed prescription drug.
“There is a difference between legal advocacy based on the facts and distorting the facts to cover up the truth,” said a statement by Carmen Ortiz, U.S. Attorney for the District of Massachusetts. “Federal agencies such as the FDA cannot protect the public health if the entities and individuals they regulate provide false information and conceal the true facts.”
Last month GSK agreed to pay $750 million to settle criminal and civil complaints accusing the company of selling tainted drugs from a shuttered factory in Puerto Rico.
The U.S. attorney’s office in Boston has been among the most active in prosecuting alleged misdeeds in the pharmaceutical industry, securing settlements with Bristol-Myers Squibb, AstraZeneca, Johnson & Johnson, Novartis, and Pfizer.
Anne PME
Looks like 2011 could be a good year for certain white collar criminal defense attorneys and PR firms. You worry that GSK will just up and outsource any business to countries where the FDA and DOJ have dimished capacity…this would also allow GSK to cut costs and have more direct access to the emerging markets.
Seriously, this type of litigation drains enormous resources from a company that are likely better spent elsewhere.
MsPiggy, I would agree with you but it seems like some of these executives behave like bullies who need to pick fights and/or see how much they can get away with.
Batman
This is awesome news. In a prior Schering Plough issue, the in-house lawyers got off completely which was ridiculous. Nice chess move by the feds. Bravo!
Lisa Van Syckel
OMG,.. How Sweet is This..LMAO
harpy
whoa!
M Helm, MD
Anne PME - “Seriously, this type of litigation drains enormous resources from a company that are likely better spent elsewhere.”
Isn’t that the point? GSK as a corporation chose to ignore legal requirements relating to promotion. This lawyer (who by virtue of their profession should know their legal responsibility) is alleged to have knowledge of something that GSK did that they subsequently denied ever happened, and then perhaps concealed the evidence from the regulators. In court that would be perjury, in a corportation it is more likely a conspiracy.
GSKs illegal actions were pursued to in the interest of expendiency - and at the time that meant someone felt the illegal action was the “elsewhere” that GSK decided was the “better spent” for their “enormous resources.” Profit (or really sales revenue since these future defense costs now coming home will be charged against their income now) was the only motive.
Simple method to avoid such a waste of resources (and chewing up and spitting out shareholder value) - follow the laws and regulations.
Have you a better proposal for assuring good corporate citizenship? Or should we just continue with the wrist-slaps and after-the-fact barn door closing?
Personally, I’d like to see the ability to claim R&D and other tax credits linked to legal compliance with FDA, FTC and other regulators. That would work especially well in PhRMA, but would be relevant in other industries too. If a company settled allegations of wrongdoing or been convicted by DOJ, they should lose their tax credits. This will not lead to any greater exodus of R&D than already exists and the PhRMA company that suspends R&D soon disappears.
If the allegations are true, this person knew what they were doing when they did it. They likely also have an escape hatch (unless they are truly stupid - which is a possibility if emails were involved in establishing the facts for the indictment). It may involve rolling over on GSK, but somehow I don’t see DOJ coming up with RICO charges against a PhRMA company. I’m afraid that even if a few executives have to fall on the sword, unless a company is debarred from doing business with CMS the corporate shenanigans will continue (perhaps in ever more insidious and pernicious ways).
Doc
If convicted, this ex-exec should get the max, both years and money. Only then will pharma execs begin to get serious and not look upon huge fines as just a cost of doing business.
typo corrected
North of the border
We in Canada can only look at what is happening in US and be absolutely envious.”We” meaning people like you who greet such news with enthusiasm, for it is good news for the people.Not so good for those who are now looking at possible jail time not only “admitting nothing” but agreeing to pay the fine. Then go home and play with kids.In Canada we don’t even have the first version. Our pharma cos get away with anything illegal for we have no FCA or any other strong law. What we have is Rx&D, the industry club that looks after their members, pharma companies.If a member co is complained against by another member for doing, say off-lable promo for competiror does not like it, if proven infraction the offender is fined $10K for first offence.That’s it. No courts of law, no gov’t action, nothing else. Never mind that offender made hundreds of millions in extra profits etc.The case is over. Then they do it again till someone complains. Often they don’t and this is going on for ever with no gov’t or public knowing it.Recently Novartis was fined $422M in USA, while in Canada $10K by Rx&D on complaint that they used fake Post Marketing trial called “Destination” to pay off doctors to Rx Diovan and “enrole” patients into the trial. Before Destination they had Diovantage also fake PMT that lasted for 5 years and made the Co at least $100M in extra sales. That would be $1B equivalence in USA. No one complained about that one, except someome blew the whistle to Basel, so it was terminated and changed to Destination.
Yes you are very lucky in an unlucky and sad sitiation.
Evelyn Pringle
Could not have happened to a nicer company. Although I had my hopes up that the headline was referring to the former FDA chief counsel turned Glaxo attorney, Dan Troy.
I won’t give up hope that it might still happen.
We certainly know that this gal ain’t the only crooked attorney that’s been working to cover up all the off-label marketing schemes involving psych drugs over the last decade and a half.
Louis XVI
N’ayez pas peur, Canada! Nous serons avec vous tout de suite! Vive les plutocrats! Vive le Tea Party! Vive le deluge!
industry insider
I wonder if George W Bush’s appointment of Dan Troy as FDA Chief Counsel was covered in his latest book “Decision Points”.
Nathan & Terry Bearden
AWESOME! Perhaps finally the pharma execs and their attorneys will pay a SMALL price for the damage their unethical, inhuman practices cause far too often. Perhaps now the public will begin to pay attention to the scientific bankruptcy of Big Pharma. Billions of dollars in fines and multiple guilty pleas (sans prison sentences) certainly have not managed to wake people up.
Pharma Chris
I agree with most of the comments. But what strikes me is that for all the talk talk talk the one thing the government still runs away from is charging a senior business executive at a major pharma company with a crime. How many settlements and CIA’s does Pfizer have? How many Pfizer business executives were charged with crimes? Zero. There were definitive decisions made by executives to promote Bextra off-label. No charge. But sure some lawyer doing the bidding for Glaxo gets nabbed. It sounds good but it’s just more of the government going after low hanging fruit. Did you read the allegations from the Novartis settlement. Outrageous. How many Novartis business executives got charged? Zero. And Lilly? And AstraZeneca? Not to mention Bristol-Myers with case after case, accounting violations, off label promotion … How many CEO’s have been charged? The DOJ still goes after the money and tiptoes around the senior executives. Remember, the off-label promotion of these companies was not performed by computers or by accident. There were executives behind all of it. And the DOJ refuses to have the courage to go after them. I am fine that they are going after the Glaxo lawyer. But if the allegations are true then it is for covering up off-label promotion. Who is going after the Glaxo executives who made the decisions about the promotion in the first place? They remain undera veil of protection.
industry insider
Good point Chris. In the past five years the United States Government has received more money in criminal fines from the Pharmaceutical industry than any other single industry. I have a sense that the Quid Pro Quo is that we’ll pay you the $750,000,000 or the $2.3 billion as long as we spill our guts and you keep our folks out of jail. Quite frankly, I think that in these days and times the government would rather have the money than the bodies. When you have a market capitalization of $100 billion, such as a Pfizer, you can afford to part with a couple of billion to keep folks out of the slammer.
GabbyB
It seems to me that Lauren Stevens’ attorney is indicating that her defense will involve pointing the finger at GSK’s outside “nationally prominent” law firm on whose advice she was operating. Now that’s what I like to hear!
GSK and the rest of Big PhRMA just LOVE to hide their dirty laundry under the cover of legal privilege. There’s a lot of high priced lawyers taking GSK money to grease their the path to mayhem, misery and dead babies. Can you say “Paxil”? Nice money, nasty morals.
King & Spalding (Atlanta, D.C., etc.) handled the Paxil defense for Suicide cases, Withdrawal Hell Symptoms cases and Baby Killing Birth Defects. They’re one of the possibilities for this.
I wonder if any closed door meetings are going on — plans being made to purge old emails and ship boxes of paper out for shredding? Maybe somebody will have to hire a lawyer. Phone calls being made to political connections to get the loose bulls of the U.S. Attorney’s office, etc., back into the barn.
I can’t wait for the finger-pointing starts. Hope I recognize the particular “nationally prominent” lawyers involved. I’m sure it couldn’t happen to a more deserving bunch. Shucks!
Doc
The industry leaders need to see the resurrection of the Park Doctrine and it’s successful use at least once on one of their brethren. I’ve heard it too many times at my company, “These fines are just the cost of doing business today”.
Evelyn Pringle
It occurred to me this morning that Troy was the top legal hound at the FDA when the phony statements were made by the Glaxo attorney in October 2002.
I believe he filed the FDA’s first preemption brief in an SSRI suicide case in September 2002.
Wonder why he didn’t spot the dishonest disclosures the very next month.
shytown
Congrats to Tony, no matter it was 7-8 years later.
It sends a clear signal, no more business as usual for Big Pharma.
Now maybe when these investigations take place, the company will ACTUALLY turn over all the documents.
I am sure that it is just more wishful thinking on my part, but at least it’s becoming more of a possibility.
pharmagossip
You could not make this up:
The global pharmaceuticals industry must become more transparent if it is to rebuild public trust in the sector, AstraZeneca PLC’s (AZN: 49.52 ,-0.04 ,-0.08%) chief executive said Wednesday.
David Brennan told a gathering of drug sector leaders that industry stockholders need to collaborate to collectively address the world’s healthcare challenges.
“Part of restoring that trust is about being transparent,” Brennan said in prepared remarks to the 25th International Federation of Pharmaceutical and Manufacturers & Associations (IFPMA) assembly in Washington D.C.
“If we are honest, our industry has not always been as open in the past as it could have been. But I think there is recognition now that transparency is the best way to build relationships and understanding.”
Brennan’s remarks were part of his inaugural speech as the new IFPMA president.
http://www.foxbusiness.com/markets/2010/11/10/astrazeneca-ceo-pharma-open-work-stakeholders/#
Jack Friday
Corey Nahman writes:
It’s titillating she is a lawyer but the real take home point is that the US Attorney has indicted a former V.P. (She is retired). The shit is going to hit the fan when they offer her immunity to tell on her friends. (And you know she will because there is no parole in Federal prisons). Worst case scenario would be that she implicates her former compadres in a manner that morphs this headache into a full blown RICO case.
Ethical Monitor
It’s interesting to me that only the top executives get noticed. But the dirt starts and the bottom and builds into a large swirling funnel of debris and rubbish- then it gets noticed.
As a recently fired GSK Study Monitor, I was then a minuscule severance package to keep my mouth shut about regulatory non-compliance that I saw at a favored research center. It took GSK over 10-months to follow through on their warning letter process to fire me. I met all expectations and even had a 98% efficiency rating and I walked on eggs everyday to save my job. (That’s right folks – GSK values the worth of their Study Monitors on efficiency not quality of work). The GSK attorney from the staffing division would not negotiate with my attorney and dismissed me like a flea because I am at the bottom of the food chain. Basically GSK knows it can run low-quality clinical research trials with very little oversight of the research centers because the FDA will do nothing. The FDA especially does not listen to Study Monitors who try to report non-compliance. But they are playing dirty as GSK has reneged on their severance package as they are not paying for the promised extra 2 months of health care coverage. I got the bill from COBRA and GSK will do nothing to resolve the problem. I also continue to get bills for a Verizon 3G wireless modem that I sent back to the GSK in early August. Verizon will not stop sending them to me because I cannot provide them with the tax ID for GSK. GSK with all of its abilities cannot even manage to pay a Verizon bill on-time. In October, the GSK Director of Human Resources told my attorney these issues were resolved. In November they again popped up. I again had to contact my attorney. GSK is playing dirty on two counts: they way they treat employees they fire for doing their job according to regulatory expectations and ethical conduct. Secondly, the way GSK runs clinical research trials. Their oversight is really poor and they spend more time analyzing the costs of study trials than the actual research data or ensuring that studies are being correctly conducted at research centers. They have recently merged the Research Division under the Marketing Division. In the world of Research this is a big no-no as the 2 need to be kept separate. But the FDA will do nothing because GSK has tremendous lobbying power. GSK has decided they will use clinical research trials as a way to get their marketing staff into Dr.s offices. GSK is also doing their best to enforce on the Study Monitors this idea of “Mandatory Monitoring” or “Adaptive Monitoring”. The basic idea is to have fewer onsite monitoring visits to cut costs. They do not care whether the data is accurate or subjects are getting hurt. Study Monitors cannot evaluate or review study data with source documents from their home offices. In addition the workload and travel expectations they impose upon Study Monitors is impossible to meet unless you are a “favored” employee.
What are even more laughable are the GSK mantras of transparency, integrity, and honesty. If they want people to trust them they need to start spending their time behaving ethically rather than spending their time covering-up and dismissing people like me who do their jobs according to the “intent of the law”. So who’s left running the show at GSK - the people who are willing to turn their backs on bad clinical research practices and be part of their “trusted family”. This is even at the lower level like Study Monitors who are revered for their lack of ability or willingness to address study conduct non-compliance but instead maintain great relationships with high-prescribing investigational research centers. How about their mission: “to improve the quality of human life by enabling people to do more, feel better and live longer”. I worked 14-16 hours a day for them and I was told everyday that I was valueless by my managers. My blood pressure went sky high and I even started cracking my teeth to the bone while sleeping. My managers refused to give me the tools and information that I needed to adequately do my job. After working at GSK and their firing of me, I certainly don’t feel better about myself, I have no quality of life because after dealing with Big Pharma for 25-years I have not self-esteem or confidence left.
The attorney handling all this is located at NC but is certainly not in the upper executive caliber. I am sure she is proud of the way that she easily dismissed me and my attorney but I have no fight left in me. I am ashamed of myself for not knowing how to make changes in a terrible situation. Nevertheless, the unethical behavior is the same. I took the severance package in tears because I was broke. But it was just plan wrong and the non-compliance that I saw needs to be reported to the FDA. I wish there were options for the lower-level folks like me because the basic outcome is that drugs like Avandia are getting to market on low-quality clinical research trials and people are getting hurt in the after-market arena and the clinical trials. GSK wants people to trust them - well they better remember that I am no longer an employee and I am considered a potential patient-client. After seeing what they do from the inside, I don’t trust them as a patient-client. GSK has earned the trust from people they deserve - none.
Do you really think Andrew Witty cares - absolutely not? When I first got hired at GSK I was proud to work for a company who seemed to care about people with their programs in AIDS research and rare diseases. This is just a ploy and I am sure Andrew Witty is swollen with pride knowing his name is associated with these so called good works. From the way the company is run the only thing he cares about is his own reputation as a savior. By the way what ever happened to those so called touted programs to advance AIDS and rare disease research? Until recently, these programs became less and less mentioned in their websites. With all the bad publicity GSK has hauled them out again to prop up their reputations as saints of good works. The AIDs program collaborations has entirely disappeared but now they are into their so called “rare disease” programs. The only thing rare about these programs is the clinical advancements over the promotional aspects for GSKs saintly reputation.
Like I said the dirt starts swirling at the bottom and it only gets noticed when it becomes a full blown dust funnel of huge proportions. Meanwhile a lot of people at the bottom get hurt including employees and patients. That attorney at the top got what she deserved and I wish the ones in the Staffing division would also be noticed and pay the price for destroying lives. This goes to for the Directors and Managers running the Clinical Research Division (new Marketing Division) in the US.