Families face battle with GSK over dangerous diabetes drug

Exclusive: Pharmaceutical giant resists claims despite settlement with victims in US

• Sarah Boseley, health editor
• The Guardian, Tuesday 29 January 2013 21.04 GMT

GlaxoSmithKline has agreed to payouts in US lawsuits alleging Avandia pills could cause heart attacks. Photograph: Bloomberg/Getty Images

Thousands of families in the UK could be deprived of compensation for the death or harm of a relative caused by the diabetes drug Avandia, even though the British maker has agreed to pay billions of dollars to settle similar claims in the US.

The licence for Avandia was revoked in Europe, in September 2010, because of evidence that it could cause heart failure and heart attacks. The drug can still be prescribed in the US, but not to patients at risk of heart problems.

A scientist with the Food and Drug Administration estimated that Avandia could have been responsible for 100,000 heart attacks in the US.

The manufacturer, GlaxoSmithKline, has admitted concealing data about the damaging side-effects of the drug, and there is evidence of the drug's harmful effects. But, despite this, GSK is not prepared to settle claims in the UK without a court fight.

The history of drug litigation in the UK suggests that families might not easily get  compensation.

Daniel Slade, with the Express company of solicitors in Manchester, has 19 cases on his books and has begun proceedings against GSK in four of them.

The pharmaceutical firm has told the solicitors that it will contest the cases. In just one of the cases it has indicated a willingness to spend £600,000 on its defence, which, the solicitor says, would be a fraction of what the claim is worth.

"It is very disappointing," said Slade. "We anticipate that these claims do have a good prospect of success, but they still have to prove their case in the UK with suitable evidence. They are tasked with having to produce that evidence, including medical expert opinion. It is a burden one would have thought they might not have to go through."

He expected that, if GSK fought in the courts rather than settled outside, as it had done in the US, it would take years for bereaved relatives, or those who have been harmed, to get any sort of payment.

A spokesman for GSK said: "We have every sympathy for people with complications associated with diabetes and those who care for them, but unfortunately we are unable to comment on individual legal cases. We continue to believe that the company acted appropriately and responsibly in its management of Avandia."

Liz Thomas, policy manager at the patient safety charity Action against Medical Accidents, said it had "become increasingly difficult in the UK to challenge large corporations such as pharmaceutical companies, an incredibly expensive form of litigation".

Corporations have a vast amount of money at their disposal to contest legal cases, butlegal aid is about to cease for medical negligence cases.

The Avandia cases in Manchester will be fought on a "no win, no fee" basis by Express solicitors.

The cases in the US were settled by GSK extremely quickly, said Thomas. "I would hope they would not take advantage [in Britain] of the inequality of arms."

Avandia was first introduced in the NHS in July 2000. It was given to people with type 2 diabetes whose glucose levels were no longer being properly controlled by the standard drugs – metformin and a sulphonylurea drug. Avandia could be prescribed with those drugs or on its own.

The drug, which generically is known as rosiglitazone, was designed to lessen the body's resistance to insulin. It was available as a standalone drug – Avandia – or in a combination with metformin, and known as Avandamet.

When both drugs were withdrawn by the European Medicines Agency, there were about 90,000 people taking them in the UK.

The first warnings of trouble with Avandia came in 2007, when a prominent US scientist, Steve Nissen, published data from a review of 42 clinical trials which had been carried out on the drug. The trials involved 28,000 patients, and showed that Avandia could cause heart attacks. Further trials, the results of which were published in 2010, found people on Avandia were 27% more likely to have a stroke, 25% more likely to have heart failure, and 14% more likely to die, than patients on an alternative diabetes drug.

Potentially yet more damaging for GSK was its guilty plea to federal charges of concealing data about the drug's side effects. Most of the data on the drug comes from GSK's own trials. In November 2011 GSK agreed to pay $3bn to the US government over the Avandia issue and to end investigations into its marketing of the antidepressants Paxil (Seroxat in the UK) and Wellbutrin.

"This is a significant step toward resolving difficult, long-standing matters which do not reflect the company that we are today," Andrew Witty, chief executive of GlaxoSmithKline, said at the time.

GSK is also still defending cases in the UK from people who claim to have been badly affected by Seroxat. A group action, involving people who say they suffered severe withdrawal problems when they tried to stop the drug, has been going on for years though many claims have been settled in the US.

The same is true of Vioxx, made by Merck, the painkiller that was withdrawn after it emerged eight years ago that it doubled the risk of a heart attack.

Britain could end these tax scams by hitting the big four accountancy firms

The spiders spinning the web of avoidance are the major accountancy firms who make billions from the public purse

• 
• • Polly Toynbee
  • The Guardian, Monday 10 December 2012 21.00 GMT

A Starbucks protest on 8 December. ‘A clever protest on the right issue can catch public imagination and media attention.' Photo: Antonio Olmos for the Observer

Sometimes it only takes a spark. Never imagine nothing can be done: UK Uncut packs a punch far above its weight, as did the suffragettes, slave trade abolitionists and most causes great and small. A clever protest deftly done on the right issue can catch the public imagination and the media's attention: now the public accounts committee investigates and the government is obliged to pledge action.

At Saturday's Starbucks occupation of 40 coffee shops, the point was easy to explain to passers-by: companies massively avoiding tax help to cause the cuts that shut libraries, Sure Starts and women's refuges. This short occupation with an orderly exit and loud chants causes Starbucks deep reputational damage. Costa, nearby, does pay its taxes, while Starbucks avoids its duty to the civilised society it depends on.

Take note, all other corporate avoiders: Manchester Business School estimates that Starbucks will see a 24% drop in sales over the next year, from the experience of reputational crises in 50 other companies. The eye-popping stupidity of choosing this same week to cut its staff's paid lunch breaks and sickness and maternity pay suggests a company whose only efficiency is in tax-avoiding. The £20m it offers as a "donation" to HMRC may even be tax deductible: it can offset this "overpayment" against future tax, once public attention has drifted elsewhere, adding to the phenomenal recent drop in corporation tax receipts, as companies copy one another's avoidance schemes.

In 2009 the Guardian's tax gap series kicked off this debate, exposing devious but legal devices such the "double Luxembourg", the "Dutch sandwich" and Roger the Dodger of Barclays. This is the most dangerous kind of investigation, where any mis-step risks lethal lawsuits from those with deep enough pockets to kill: it cost us £100,000 in lawyers' fees alone, plus months of journalists' time digging into opaque company accounts. We told how Boots, bought by private equity firm KKR, abandoned its Nottingham home to put its HQ in Zug, the Swiss tax haven. By loading the company with debt, its tax bill dropped from £606m to £74m – and Barclays lent them billions to do it. GlaxoSmithKline and Astra Zeneca moved to Puerto Rico and Shell took its trademark to Switzerland. Diageo transferred brand names to a Dutch subsidiary, so Johnnie Walker whisky paid just 2% tax.

How did they put the profits from a whisky blended in Kilmarnock into low-tax Amsterdam? Deloitte did it, reportedly so proud they broke open champagne when it went through. And that is the crux of the matter. At the heart of almost every tax-avoiding scheme is one of the big four accountancy firms – Deloitte, PricewaterhouseCoopers (PwC), KPMG and Ernst & Young.

Tax campaigner Richard Murphy, whose razor-sharp work with the Tax Justice Network fuels so much of this campaign, says these four are at the heart of the worldwide web of avoidance, with offices in all the main tax havens. PwC explained on the radio last week that the reason it had large offices in Bermuda was to audit the local hospital. Few clients could use these havens without one of the big four as auditor: virtually no business happens in havens, but bankers, lawyers and accountants need to be located there.

The four have a grip on the auditing of many major firms. The dogged work of accountancy professor Prem Sikka shows how they work, cold-calling to offer elaborate tax schemes. They hardly ever give bad audits to companies hiring them, and despite grave failures in auditing banks, they are not disciplined by professional accountancy bodies. Nor does the Treasury recover costs, even when successfully challenging their elaborate scams.

The public accounts committee last week gave a satisfying roasting to three boutique tax-avoidance firms. Margaret Hodge tore a strip off them, as one admitted that all his schemes had been declared illegal and shut down. But now the committee needs to go after the big four: none of this could happen without them. In his autumn statement George Osborne declared – as chancellors always do – that he would pursue avoiders. But he replaced only a fraction of the Revenue's cuts, with another 10,000 staff still to be lost.

If Osborne were serious, stern regulation could stop all this. As it is, companies that pay their auditors £700 an hour will sometimes undeservedly get a clean bill of health, as did Northern Rock, HBOS, Bear Stearns and the rest. One radical suggestion is that the National Audit Office should take charge of all big company auditing itself, paid by a levy according to company size: it would protect shareholders from inadequate audit and taxpayers from avoidance. Banks are still receiving clean audits, despite the governor of the Bank of England declaring them to be zombies paralysed by undeclared bad debt.

So far attacks on tax avoidance focus on the web, but now it's time to go for the spiders that spin it. The same firms that conspire to deprive the state of revenues are paid large sums as consultants by the very government they weaken. KPMG, along with McKinsey, is conducting much of the sale of the NHS to private contractors. If you want to see this curious contradiction, look no further than PwC's website, which blends its contrary functions in one sentence: "Our Government and Public Sector practice comprises over 1,300 people, more than half of whom work in our consulting business, with the remainder in assurance and tax."

Osborne has announced a consultation on making honest tax payment a condition of winning government contracts. But these companies are woven into every aspect of government and business. The chair of the NAO, Sir Andrew Likierman, is a director of Barclays and past president of the Chartered Institute of Management Consultants. The NAO auditor general, Amyas Morse, was previously global managing partner at PwC. Meanwhile, accountancy firms are major donors to the Conservative party.

With political will, all this can be cleaned up. However remiss in office, Labour should seize the initiative. The OECD is urging the G20 to agree on a fair system for taxing companies according to where profits arise – though countries are locked in cut-throat corporation tax competition. However, the UK controls most tax havens and could shut them down overnight if it copied Charles de Gaulle: angered by tax scamming, he once surrounded Monaco and cut off its water supply until it relented.

Parkinson's sufferer wins six figure payout from GlaxoSmithKline over drug that turned him into a 'gay sex and gambling addict'

A French appeals court has upheld a ruling ordering GlaxoSmithKline to pay €197,000 (£159,000) to a man who claimed a drug given to him to treat Parkinson's turned him into a 'gay sex addict'.

Didier Jambart, 52, was prescribed the drug Requip in 2003 to treat his illness.

Within two years of beginning to take the drug the married father-of-two says he developed an uncontrollable passion for gay sex and gambling - at one point even selling his children's toys to fund his addiction.

He was awarded £160,000 in damages after a court in Rennes, France, upheld his claims.

The ruling, which is considered ground-breaking, was made yesterday by the appeal court, which awarded damages to Mr Jambart.

Following the decision Mr Jambart appeared outside the court with his wife Christine beside him.

Jambart broke down in tears as judges upheld his claim that his life had become 'hell' after he started taking Requip, a drug made by GSK.

Mr Jambart began taking the drug for Parkinson's in 2003, he had formerly worked as a well-respected bank manager and local councillor, and is a father of two.

After beginning to take the drug he claimed he attempted to commit suicide eight times.

In total Mr Jambert said he gambled away 82,000 euros, mostly through internet betting on horse races. He also said he engaged in frantic searches for gay sex.

He started exhibiting himself on websites and arranging encounters, one of which he claimed resulted in him being raped. 

He said his family had not understood what was going on at first.

Mr Jambert said he realised the drug was responsible when he stumbled across a website that made a connection between the drug and addictions in 2005. When he stopped the drug he claims his behaviour returned to normal.

"It's a great day," he said. "It's been a seven-year battle with our limited means for recognition of the fact that GSK lied to us and shattered our lives."

He added: 'I am happy that justice has been done. I am happy for my wife and my children. I am at last going to be able to sleep at night and profit from life. '

He added that the money awarded would, 'never replace the years of pain.'

The court heard that Requip's side-effects had been made public in 2006, but had reportedly been known for years.

Mr Jambert said that GSK patients should have been informed earlier.

Big Pharma buying their way out of criminal charges

Rema Nagarajan in Times of India

05 July 2012, 04:19 PM IST

The record-setting settlement has raised several questions about the system of justice. What can the $3 billion fine for GSK mean to people who have been affected adversely or have even lost loved ones because of the side effects of drugs, which GSK failed to report? Is justice served in allowing offenders to buy their way out? 

What about the people in GSK who took the decisions to not report safety concerns or to bribe doctors to push the drugs for uses not approved by the regulating agency, the Food and Drug Administration (FDA)?

The hefty fine settles criminal and civil charges of unlawful promotion of certain drugs including failure to report safety data and concerns about side effects, and for alleged false price reporting practices.

While $3 billion might be a record settlement, is it that hefty? Is it really hard on the company? Take the case of Avandia, an oral anti-diabetic, one of the drugs GSK is charged with marketing illegally. Avandia marketed since 1999 raked in over $2 billion annually. GSK is also charged with unlawful promotion of Paxil, an anti-depressant. On the market since 1994, Paxil too brought in over $2 billion annually. These two drugs alone helped GSK rake in several billions every year for over a decade. This is not even counting all the other drugs that are part of this settlement such as Wellbutrin, Advair, Imitrex, Lotronex, Flovent and Valtrex and the billions they must have earned for GSK. For being able to net sales worth so many billions, a one-time settlement of $3 billion does seem like a small price to pay to do big business.

Most major pharma companies have been accused of bribing doctors, hiding side effects of drugs and promoting drugs for uses not approved by the FDA, called off-label marketing. In 2009, Pfizer had set the record paying $2.3 billion fines for illegal marketing of 13 different drugs. In the same year, Eli Lily had to pay $1.4 billion over the marketing of Zyprexa, an anti-psychotic. Astra Zeneca and Novartis too have had to settle charges with huge fines. Over 180 pharmaceutical fraud cases, covering more than 500 drugs, are now under investigation by the U.S. Department of Justice.

Obviously, the continuing violations by pharmaceutical companies, despite such huge fines, shows that these fines are no deterrent to the companies. It is said that, to the industry, the hefty fines have simplybecome  a cost of doing business.

Director of the Public Citizen’s Health Research Group, Dr Sidney Wolfe pointed out that the settlement was nothing new for GSK, which like many pharma companies has been a repeat offender. “Until more meaningful penalties and the prospect of jail time for company heads who are responsible for such activity become commonplace, companies will continue defrauding the government and putting patients’ lives in danger.”

In this context, unctuous statements by the US administration about the “historic” multi-billion dollar settlement being “a sign of the US government’s firm commitment to protecting the American people and holding accountable those who commit health care fraud ” merely masks the fact that companies and the executives are being allowed to buy their way out of punishment for willful and deliberate harm they cause to people.