GlaxoSmithKline pleads guilty to criminal fraud charges, pays massive $3 billion in fines

GlaxoSmithKline (GSK), a corporate "person" in the eyes of the federal government (http://blog.timesunion.com/occupyalbany/corporations-are-people/394/), has pleaded guilty to criminal charges in what even the mainstream media is calling the largest healthcare fraud case in history. And though the company is having to fork over $3 billion in collective fines for its illegal activity, no actual GSK employees or executives are being held personally responsible for their crimes.

A roughly nine-year federal investigation has exposed GSK's rampant abuse of the law by illegally marketing drugs, forging drug safety data, bribing doctors to promote dangerous and expensive drugs, ripping off Medicare and Medicaid, and lying about the effectiveness and safety of drugs. And all this deception has generated tens of billions of dollars in profits for GSK over the years, while thousands of patients who used the drug products involved have suffered horrific side effects and even death.

But rather than pursue any of the individuals responsible for purveying such crimes, the federal government instead agreed to have GSK simply fork over $1 billion in criminal fines and $2 billion in civil fines. This $3 billion sum is but a fraction of the amount GSK raked in as a result of its illicit behavior, and the company's employees are now essentially free to continue engaging in such behavior without having to worry about facing any real repercussions.

Big Pharma considers legal settlements to be just another cost of doing business

Though it may sound like a lot of money to most people, $3 billion is not really all that much for a company that generated more than $42 billion in revenues just last year. In fact, according to Reuters, GSK has agreed to pay the $3 billion in fines from company cash reserves that appear to be specifically earmarked for such uses.

This means that GSK, and more than likely all other drug companies, consider criminal activity to be part of their normal company operations, and the legal settlements and fines that may result to be just another cost of doing business. GSK, in this case, was able to bring in tens of billions of dollars using illicit marketing and sales tactics, and only had to pay a small fraction of that revenue to basically pay off the American justice system.

When you really think about it, the legal system actually encourages drug companies to break the law because doing so will generate significantly larger profits in the long run. As long as the drug companies breaking the law are willing to share a piece of the pie with the federal government when investigators come to initiate the shakedown, there are no real legal consequences for the corporate "persons" of the drug industry that continue to do as they please.

Every GSK executive, scientist, salesperson, or employee that engaged in illegal activity should be arrested and tried in court

In a just world, the actual GSK employees that engaged in criminal activity as part of the decades-long scheme would be immediately arrested and tried in court for their crimes. Every corporate executive, laboratory scientist, territory salesman, administrative assistant, and factory worker at GSK that knowingly participated in the campaign of deception should be brought to justice, whether that means seizure of financial assets or jail time.

According to Reuters, such a scenario is not necessarily out of the question in this case, despite the settlement. However, federal prosecutors declined to state whether or not any individual at GSK would be pursued, which suggests that none of them likely will. And if nobody at GSK is held personally responsible for the company's ill-gotten gains, then GSK will more than likely continue to abuse the corrupt system indefinitely.

"What we're learning is that money doesn't deter corporate malfeasance," said Eliot Spitzer, former attorney general of New York, as quoted by the New York Times. Spitzer filed a lawsuit against GSK back in 2004 over the company's illegal marketing and misrepresentation of the antidepressant drug Paxil. "The only thing that will work in my view is CEOs and officials being forced to resign and individual culpability being enforced."

Sources for this article include:

http://www.reuters.com

http://www.businessweek.com

http://www.nytimes.com