In the wake of GlaxoSmithKline’s billion dollar fraud settlement some are wondering if this is simply the cost of doing business nowadays, or if there should be more punishment involved when corporate executives act so foolishly and work outside the realm of the law.
Isn’t the financial setback just a mere slap on the hand for such a successful company? Why can they continually be fined and not lose their business license? Shouldn’t someone be going to jail when the law was broken?
These are some of the questions that public watchdog groups like Public Citizen are asking.
In reference to the 3 billion dollar settlement some just don’t believe it’s enough. However, “despite the seemingly large sums”, Sidney Wolfe, director of Public Citizen’s Health Research Group believes it is not enough.
He claimed that the fines imposed on pharmaceutical companies “for dangerous and illegal conduct pale in comparison to the profits generated from such activity”. In his view, “the industry is therefore tacitly encouraged to continue its illegal activity”.
Dr. Wolfe went on to say that the settlement of criminal and civil violations “is nothing new for GSK”. He made reference to a 2010 Public Citizen report, which states that the firm “racked up more in fines and settlement payouts to the federal and state governments ($4.5 billion) than any other pharmaceutical company from 1991 through November 1, 2010”.
Dr. Wolfe says that “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”.
So when the CEO of GSK was asked about the recent settlement by reporters, the chief executive officer Andrew Witty spoke briefly about the criticism involving his company and said he would let “governments and society” choose the drivers of enforcement. But he insisted that his company’s operations have improved under his watch, whatever anyone might think about the recent $3 billion payment for conduct under its previous leadership.
“The question of how people get punished or how entities get punished is a big question,” said Witty, who became CEO in 2008. “It goes far beyond the drug industry and is for others to think about. I can absolutely answer you that I don’t think it would have made any difference to the seriousness with which this organization has dealt with and reacted to the issues brought to our attention.”
In congressional testimony in 2011, Dan Levinson, the inspector general of the U.S. Department of Health and Human Services, said: “We are concerned that these providers may consider engaging in fraud schemes, and paying civil penalties and criminal fines if caught, as a cost of doing business.”
Witty said the company “strongly” believed its behavior was appropriate in that area. But he also emphasized his attempts to improve Glaxo’s internal-compliance procedures and culture, along with more public actions to prove Glaxo was a responsible health-care company. That includes disclosing payments to doctors, stopping donations to U.S. political parties, leading on contributions to fight neglected tropical diseases, and being the first British CEO to agree to a clawback in his employment agreement for any future misconduct.
But, that still leaves the question to be answered, was enough done to punish them? When the law is broken, someone should be held responsible, apart from financially, especially when the pockets are deep of the ones being punished.