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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

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October 29, 2010

A Whistleblowing Record

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Posted by Derek

The former GSK employee who went to the FDA about quality control problems in their manufacturing has been awarded $96 million dollars for her work (it's calculated as a share of the fine against the company). This breaks all previous records - and you know, I think that's a good thing.

I've written about this sort of thing before, and I continue to think that this is a good law. It takes a tremendous amount of nerve to put your own livelihood at stake to report something that's going wrong (and isn't being fixed). The incentives need to be there. If we were a perfectly altruistic species, any of us would have no problem sacrificing ourselves immediately for the good of the whole. But the very fact that there's such bad conduct to take the risk of reporting on tells you that we're not that sort of species at all.

The case centred on a factory in Cidra, Puerto Rico, where GSK made a range of products including an antibiotic ointment for babies, and drugs to treat nausea, depression and diabetes. In August 2002, Eckard, a global quality assurance manager, led a team sent to the plant to investigate manufacturing violations that had been identified by the US Federal Drugs Administration (FDA). Eckard lost her job nine months later after warning that the problems ran deeper than the FDA realised.

Eckard's lawyers, Getnick & Getnick, said she was made redundant against her will in May 2003 after repeatedly complaining to GSK's management that some drugs made at Cidra were being produced in a non-sterile environment, that the factory's water system was contaminated with micro-organisms, and that other medicines were being made in the wrong doses. . .

. . .Eckard tried to alert GSK's management to the situation in Cidra even after she left the company. According to the lawsuit brought by Eckard, she tried to call GSK's chief executive JP Garnier in July 2003, but he declined to speak to her. She took her concerns to the FDA in August 2003 after concluding that GSK's compliance department lacked the authority to address her concerns.

I'm not enough of a libertarian to think that the market will take care of all such behavior without an extra possibility of punishment backing it up. I think that we really do need regulatory authorities (although we can argue the details after that statement!), in the same way that we really do need police forces. Both of those groups can (and do) abuse their authority at times, but both of them also provide a much-needed function, human nature being what it is.

And the nature of big organizations being what it is, too. "Never explain by malice what can be explained by stupidity" is a pretty good rule, and in a large company, you can add inertia, backside-covering, careerism, and deciding that a given mess is someone else's problem. The bigger a company, the more chances there are for these things to happen. Perhaps the possibility of a $750 million dollar fine will help to concentrate attention in such cases - and if not, well, how about a billion? Try for two?

Comments (32) + TrackBacks (0) | Category: Regulatory Affairs


COMMENTS

1. K on October 29, 2010 9:03 AM writes...

I simply cannot believe some of the details of this case, and I have been absolutely delighted to see many mainstream media outlets pick it up and run significant articles on it.

As an organization, GSK is stuffed full of highly paid compliance/safety/process/(insert your own buzzword job title here)/etc employees, poking their noses into every minute detail of life at GSK. And then we hear the details of this sorry case. Frankly, it is nothing short of a disgrace.

Heads should roll at the highest level. But we all know they won't. Good for Miss Eckard, she deserves every cent.

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2. Petros on October 29, 2010 9:30 AM writes...

The press today points out that five of the six executives she told are still with GSK

"David Pulman, president of global manufacturing and supply; Janice Whitaker, senior vice president of global quality; Peter Savin, vice president of global quality assurance; Diane Sevigny, director of global quality assurance, risk management and compliance; and Jonathan Box, vice president of manufacturing and supply for North America.

All five executives are believed to be still working for the London-listed company, while Pulman is also a member of the company's 18-strong corporate executive team,"

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3. Nick K on October 29, 2010 9:43 AM writes...

Derek, I think you're being far too charitable to the senior management at GSK. These errors at the production site could have resulted in serious injury or death to patients, with consequent potential multibillion dollar litigation. Eckard repeatedly warned Garnier et al about the problems, and was fired as a reult. I'm sorry, but senior people should have gone to prison for this. The principal losers of the award are, as always, the long-suffering shareholders.

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4. milkshake on October 29, 2010 10:03 AM writes...

Getting kicked out as a whistle blower does not improve your chances at finding a new job. No-one is going to hire a person who was 1) involved in a controversy at the previous job - and let go because of it 2) is now actually suing her previous employer.

I know this firsthand. I was at the institute where people were repeatedly and intentionally left off patents and publications from government-funded research, and some people in the management had a huge conflict of interest - starting their own company (in order to in-license and commercionalise their own research from the institute) and they were using their private company funds to pay the institute patent lawyers to work on the institute patents for compounds they were interested in licensing. The abuse was quite widespread and I was not making myself popular by bringing the managements attention to it.

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5. RB Woodweird on October 29, 2010 10:19 AM writes...

Quality Systems:GSK::Lipstick:Pig

Insert your own organization as needed.

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6. Charlie Murphy on October 29, 2010 10:31 AM writes...

For those of us, either currently or formerly, employed in a pharm dev capacity: imagine how hard we were all drilled in the importance of establishing rigorous process control for our experiments. How many hours did we all put in to ensure cGMP? And then, when the rubber meets the road, we hear too often of these cost-cutting, risk-ignoring practices when commercial inventory is on the line. Leadership is willing to disregard all of our extensive efforts. What a shame...

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7. barry on October 29, 2010 11:01 AM writes...

The scientists at GSK (as elsewhere)all bring a culture of controls and quality-checks to the work. The cultural problem comes from the top. Whereas Pharma companies were run by scientists (mostly chemists) in the 20th century, they're all (with the exception of Lilly among the bog ones) now run by people who came up through Marketing. They're driven by the quarterly earnings report, they're unequipped to look ten years into the future and they see QC as an inconvenience.
The amount of the award is welcome news. The wistleblower may now be unemployable in the industry, but she won't actually have to work.

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8. dearieme on October 29, 2010 11:28 AM writes...

"now run by people who came up through Marketing"": a friend used to work in the financial biz in the UK. About a dozen years ago he subjected me a diatribe about the dreadful consequences that would follow the shifting of control from the technical bods (in his firm, the actuaries) to the marketing men. It's now clear that he had great foresight. The analogy with the drugs biz seems quite good.

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9. Anonymous on October 29, 2010 11:37 AM writes...

Good for her!

Out of curiosity, though, does anyone know if this qualifies as taxable income for her? I suppose she has enough to live quite well regardless, but my own inner libertarian cannot stand to be happy and is looking for something else to grouse about.

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10. Anonymous on October 29, 2010 12:02 PM writes...

"I'm not enough of a libertarian to think that the market will take care of all such behavior without an extra possibility of punishment backing it up. I think that we really do need regulatory authorities (although we can argue the details after that statement!)"

I don't actually know many libertarians who would disagree. A regulated market is not the same thing as a free market, and in fact an unregulated free market is impossible while a regulated free market is close to optimal.

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11. Anonymous on October 29, 2010 12:04 PM writes...

Er, I meant to say that an unregulated market is not the same thing as a free market.

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12. Anonymous on October 29, 2010 1:48 PM writes...

Knowlingly manufacturing and selling adulterated drugs? Shame on you GSK!

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13. petros on October 29, 2010 2:17 PM writes...

Haven't severeal companies had major maufacturering violations in this extra-US sites now?

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14. mad on October 29, 2010 2:19 PM writes...

96 million seems excessive. I guess a liftiems worth of extrapolated salary factoring in regular raise/promotions with some generous overestimating would not be uneasonable (figuing that doing the right thing in this case ends up being career suicide if you fail to prove it)...but 96 million?!

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15. Chrispy on October 29, 2010 3:46 PM writes...

Her lawyers look mighty happy -- I wonder how much they'll collect...

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16. Esteban on October 29, 2010 5:32 PM writes...

@7: As an ex-Lilly, trust me that the current CEO, Lechleiter, may be trained as a chemist, but it's all the same business jargon that flows from his mouth -- he's been thoroughly converted while being groomed for his current role.

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17. Had it coming on October 29, 2010 9:46 PM writes...

GSK management was, and still is, a mess. Just look at the Sirtis deal, and then they bring in Sirtris managers who have no, I MEAN NO, NOTHING, NADA, ZILCH, experience at making drugs as SR VPs. Then there are R&D VPs who speak jibberish when standing in front of their groups when giving updates. It's embarrasing for those in the audience. So many are simply trying to hang on until they can leave with a semblence of financial comfort under their belts. Witty, not withdstanding.

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18. Anonymous on October 29, 2010 11:05 PM writes...

@ 17
Which GSK management are you referring to? R& D or R? My view of GSK (or perception)based on the press is failure resulting in a major purge of staff over time. I see individuals exiting GSK only to emerge elsewhere. Time will tell but I believe in science...not management of the science. anyone can manage a bunch of scientists...like a business...

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19. Doug on October 30, 2010 5:51 AM writes...

I've worked my entire life in the medical industry. I started out as a hospital clinical chemist and transitioned into the medical device design/build industry where I remain today. In my entire career, I'm only aware of one person who actively attempted to corrupt data (it was in the hospital) and we fired her/his ass instantly when we found out what was going on.

You pharma folks scare the hell out of me. I'm sure that the vast majority of people in the field are honest, hard working people. If the culture of the companies is so corrupt as to compromise your products, I'm thinking about going back to willow bark and magic spells...

Permalink to Comment

21. Anonymous on October 30, 2010 12:14 PM writes...

I'm thinking about going back to willow bark and magic spells...

My +5 mace and chainlink armor will destroy your willow bark and magic spells.

Permalink to Comment

22. metaphysician on October 30, 2010 12:53 PM writes...

#21-

If you could acquire a +5 mace, why are you still wearing nonmagical armor? *eg*

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23. AlchemistOrganique on October 30, 2010 3:16 PM writes...

Although I may be over-simplifying my argument, this latest incident at GSK once again underscores the drawbacks of corporate consolidation in Pharma. As greed compels companies to merge and become unwieldy, production oversight becomes increasingly difficult. Since problems have already arisen at domestic (J&J's/OrthoMcNeil's smelly Tylenol) and protectorate (BMS and GSK plants in Puerto Rico) facilities, how the HELL can Pharma exec expect minimal problems from transferring manufacturing and R&D to developing countries? While the continued economic growth in China and India is admirable, both countries are surprisingly corrupt. Even after the show-execution of its former FDA official following the melamine debacle, production of consumables in China continues to go largely unregulated.

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24. Had it coming on October 30, 2010 5:23 PM writes...

#18. Yes.

Witty is singualarly unimpressive.

Slaoui was so successful heading small molecule R&D that he was moved up and away from having to actually be responsible for this area.

Valance is still very, very academic. He and Slaoui were responsible for pushing the Sirtris disaster.

Baldoni is a clown. He spouts symbolisms but says nothing, conveys no functional message or practical vision.

Clinical has been poorly organized and operated for the past 10 years.

This is not to say that GSK lacks some good scientists, is absent of people who really want to make new drugs. It's just that those on the top and many or their selected reports are lost in their own self importance, their conflicting egos (which I've heard is increasingly obvious when they are together). All this, superimposed on the ongoing reorganizations, downsizings, budget cuttings, which have eliminated many of the most experienced, best balanced managers who have actually been involved in making new drugs over the years. And, decreasing profits, which make it all cyclical, non-ending.

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25. cox2 on October 31, 2010 3:57 AM writes...

I'm not at all surprised by this. However, it greatly damages the already tarnished image of the pharmaceutical industry generally so no room for Schadenfreude in the rest of the sector! I had a small but telling experience as a very minor whistleblower of sorts a few years ago when I worked at GSK. I reported to a guy who would routinely go AWOL while supposedly "home-wrorking". Working under such circumstances was less than optimal so, feeling brave for once, I raised the issue in confidence with our group leader and was promptly slapped down with a not so veiled threat to mind my own business if I wished to retain my job. Perhaps I was too timid so I dropped the matter, maybe I could have mentioned it to HR but, at that time, there did not appear to be a convenient mechanism for conveying such information to people who could address it. Though I no longer work there, I sincerely hope the culture has changed at GSK and little guys can speak up and be heard when management is behaving in an unethical or illegal manner. However, contact with friends still there is less than re-assuring on this issue. The industry needs to be squeaky clean, especially now that it is a frequent target of often unfair criticism. The stock response from GSK is very disappointing, heads really need to roll over this or the company is doomed.

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26. inside on October 31, 2010 8:19 AM writes...

#25
GSK is doing very little to clean up this very tarnished image, either internally or externally. As with any large organization, there are people with integrity, with guts to try to speak and act with good intent. But within R&D, there are few formal mechanisms to get any message or warning to anyone with an authority to implement changes. Communication with HR has been reduced to phone call tag & electronic databases to find policies. At least there are less of them to try to come to technical meetings and wanting to tell us how to do science. Too many of the "old time" managers, those who were around when needed, those with open door policies to talk to anyone, those with some common sense about people, knowledge about what was needed and important for moving compounds forward, have been driven out, left on their own, or deselected. I know of one US VP who heads a group split between NC and Philly who seldom is seen at the PA site since it's simply inconvenient even though the majority of the reports are there, who is seldom seen in office in NC, who seems to spend an inordinate amount of time "on vacation" or as "unavailable". When appointed to this position, this was very predictable as the person had once before demonstrated the same behaviors in a previous position, and had been removed from that position due to the inability to work successfully across more than one site. But, because of other ego driven agendas, later was appointed to the newly created consolidated job by a weak, unimaginative new area VP.

The idea of individual authority, flat management, less top down direction, makes it hard to drive changes when needed. In a recent "town hall" meeting for a major part of R&D, people walked out before the speakers were finished, being so frustrated by the lack of message, absence of clarity, confusion, oozing arrogance & sliminess that was projected. Unfortunately for employees & stockholders alike, this is seems to be the current undercurrent within GSK R&D, with little indication for a turn-around.

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27. PorkPieHat on October 31, 2010 8:20 AM writes...

OMG, look at what #24 AlchemistOrganique just said. How CAN we trust drugs that are manufactured in China, esp by western drug companies that are best with management turmoil due to restructuring & organizational changes that come with M&A? Each of these externals separately represent opportunities for mismanagement and corruption, but to see them all coalesce like that in China (or any other corruption-ridden economies)? Man that's scary.

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28. MIMD on October 31, 2010 10:02 AM writes...

See this Oct 31 article in the Philadelphia Inquirer:

Big Pharma executives facing legal threat [from FDA]

http://www.philly.com/inquirer/business/homepage/20101031_Big_Pharma_executives_facing_legal_threat.html

Rats that infested a Philadelphia warehouse 40 years ago have found their way into the legal nightmares of the nation's drug companies.

Frustrated that even billion-dollar fines seem to have little effect on pharmaceutical firms, the Food and Drug Administration has increasingly signaled its intent to use a legal doctrine spawned by those long-gone rodents to bring criminal charges against top executives, even those who might have been unaware of company misdeeds.

Earlier this month, Eric Blumberg, FDA litigation chief, told an industry audience that his agency was looking for cases to use what is known as the Park Doctrine as a tool to "change the corporate culture" of firms that have thus far shrugged off other penalties.

In one area the FDA is targeting are companies that have illegally promoted products for unapproved uses, a practice know as off-label marketing.

"I don't know when, where, or how many cases will be brought," Blumberg told a gathering of the Food and Drug Law Institute, "but if you are a corporate executive - or counsel advising such a client - I would not wait for the first case to decide now is the time to comply with the law. They won't get a mulligan on their conduct."

In an interview Thursday, Blumberg was pointed.

"They need to take this seriously and find out what is going on in the marketing and sales divisions of their companies," he said of pharmaceutical executives. "In my view, one thing that will get executives' attention is a few cases in which we have convicted two-legged defendants."

He singled out firms, including Pfizer Inc. and Eli Lilly & Co., that have paid multiple penalties in recent years.

Eli Lilly, for instance, was hit with a $1.4 billion fine last year for illegally marketing Zyprexa, a antipsychotic drug. The same year, Pfizer was fined $2.3 billion for illegally marketing the pain reliever Bextra. Neither company's stock price suffered significantly, leading some to conclude that even massive fines are viewed by investors and executives as simply the cost of doing business. Neither firm responded to calls for comment.

"It is clear that fines are not working here," Blumberg said. "We need to put something else on the scale to make people think twice, three times, before they promote drugs for unapproved uses."

That something is the threat of prison and industry debarment, which could result from a successful prosecution using the Park Doctrine.

Under the Park Doctrine, a corporate officer is liable for illegal corporate actions the officer should have known about or was responsible for preventing.

It stems from a case involving John Park, president of Acme Markets Inc. in 1970, when the company was cited for rodent infestations at a warehouse here.

The FDA charged Park personally with violating sanitation laws after other rodent infestations were discovered despite a number of agency warnings.

Park argued that as company president he was too far removed from warehouse supervision to be held responsible.

The U.S. Supreme Court ultimately agreed with the FDA that Park, as president, was responsible for ensuring rodent-free warehouses.

Park got off relatively easy: a $250 fine.

Prosecutors now hope to extract stiffer penalties under the doctrine, including up to a year in prison and $100,000 fines.

Read the whole thing.


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29. TBone on October 31, 2010 4:13 PM writes...

If GSK is guilty of a criminal offence or offences in this matter, then surely U.S. authorities could prosecute Garnier et al? It beggars belief that most of those who ignored Cheryl Eckhard's warnings are still there and seems to lend support to the idea that the company supported, and still supports, their actions! The names mentioned previously represent some of the worst types you're likely to meet in a company such as GSK: arrogant, self-serving empty suits doing non-jobs badly. The company is being slowly strangled by these apparatchiks and with the likes of the very unsavoury Slaoui in charge, nothing is likely to change.

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30. gippgig on October 31, 2010 10:05 PM writes...

Are there any pharmaceutical companies that are doing a good job?

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31. GreedyCynicalSelf-Interested on November 1, 2010 12:57 AM writes...

You forgot how these managers got their positions. Upper management is good at manipulating people, not dealing with reality, like what is actually required to make their product. They don't care about their product as such, only how much money it makes and what their next promotion is.

So, when things go wrong, just manipulate or intimidate people, and the "problem" is solved. If they were engineers or scientists, they would fix the real problem at the source. Management in this case are of a class of people described as "money expropriators." The other class of people are authentic "money makers" who actually produce something of value to trade with the public.

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32. IlSalvatrre on November 1, 2010 6:13 AM writes...

There are many recurring themes here concerning GSK, you see the same complaints eloquently expressed on multiple blogs by a diverse set of submitters. The problem is that those who can change things are either not willing or not able to implement the needed reforms. If anything, it appears that the situation is deteriorating with more and more of the people who make things happen leaving while the proportion of gasbags increases. Take IT support for example, most of the techies are gone and we're left with a bunch of muppets who no no science and even less IT. A complete joke except if you're a hapless stockholder or a put-upon employee! Expect more corporate disasters as real expertise leaves and vital functions are off-shored by our current "management"!

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