Glaxo lawsuit shows hypocrisy of drug industry


When Maine Sen. Olympia Snowe co-sponsored a bill in 2009 to allow for the re-importation of medications from other countries, drug makers argued it was risky and dangerous.

How would we ever know if the far-less-expensive brand name drugs coming back into the U.S. from other countries would be safe?

Well, now we know that the drug makers themselves import from overseas and that at least one of them, GlaxoSmithKline, did little or nothing to monitor the safety of its own imports.

GSK agreed Tuesday to pay $750 million to settle civil and criminal charges that it made and sold adulterated drugs to Medicaid and other government programs.

The settlement involved four drugs made at plants in Puerto Rico: Paxil, an anti-depressant; Avandamet, a diabetes drug; Bactroban, a skin antibiotic; and Kytril, used to treat nausea.

The suit alleged that Kytril and Bactroban were contaminated by micro-organisms, that the Paxil tablets fell apart and that Avandamet did not always contain the right mix of ingredients.


The complaint was originally filed under a whistleblower statue by Cheryl Eckard, a quality assurance specialist for GSK in 2004, and she will be richly rewarded for her trouble, receiving $96 million under the settlement.

While the penalties are among the largest in U.S. history, they pale in comparison to the $5.6 billion GSK earned in 2009 on about $45 billion in revenue.

The settlement shows two things:

First, that the drug makers themselves manufacture overseas and, at least in the GSK case, have lax standards.

Second, that the U.S. government needs an independent way to monitor the quality and efficacy of drugs made either here or abroad. We shouldn’t have to rely on whistleblowers for our safety.

Having an independent agency would also open the door to re-importing brand-name drugs from overseas.

As we have long argued, it is simply nuts that Americans pay to educate scientists who develop drugs, we fund much of the research that leads to drug innovations, and then we pay the highest drug prices in the world.


Other nations regulate drug prices, allowing their citizens to pay far less for the very same brand-name drugs available in the U.S.

Lower profits don’t seem to affect the willingness of the U.S. drug makers to sell in these markets.

Meanwhile, Americans are gouged not only for the drugs they buy here but for those purchased by poor and elderly Americans under Medicaid and Medicare.

At the behest of the drug industry, Congress has forbidden these programs from bargaining for group pricing for Medicaid and Medicare recipients. Instead, it has set up an idiotic system of private drug plans that are intentionally baffling in their complexity.

The Veterans Administration does bargain and, as a result, pays far lower costs than other programs.

When we wonder why our medical costs are the highest on earth, this is one of the major reasons — this legalized gouging of American consumers.

If we don’t allow price controls like other countries, at least allow the federal government to negotiate for better rates and allow the re-importation of medicines from low-cost countries.

If we are serious about controlling out-of-control medical expenses, this is the place to start.

[email protected]