GlaxoSmithKline (GSK)


GlaxoSmithKline (GSK) is one of the world's largest drug companies. Its type 2 diabetes drug Avandia and antidepressant Paxil can cause serious side effects that often result in lawsuits.

GlaxoSmithKline specializes in cutting-edge vaccines and popular health products like AquaFresh toothpaste and Breathe Right strips. Its global headquarters is in Brentford, England, and its U.S. headquarters is in North Carolina.

GSK is known for its global initiative to make medicines affordable in developing countries and a recent partnership with Pfizer, another pharmaceutical company, to create ViiV, a company dedicated to fighting AIDS and helping communities affected by HIV. GSK has offices in more than 100 countries. The company reached sales of $44 billion in 2011 and employs nearly 100,000 people worldwide.GlaxoSmithKline Logo

The company’s noble goal of “enabling people to do more, feel better and live longer” has been tarnished in recent years, however, as several of its products have come under fire. GSK’s Avandia used to be the world’s best-selling diabetes pill and brought in $3 billion in annual sales. But after studies linked the drug to an increased risk of heart attack, Avandia sales were suspended in Europe and temporarily restricted in the United States. The consequences were drastic, with sales dropping to around $1 billion in 2010.

In another scandal, in 2012, GSK paid fines of $3 billion in a historic federal case over illegal marking and withholding of data. That case also involved Avandia, as well as two antidepressants, Paxil and Wellbutrin, and its asthma drug, Advair. The company is also facing litigation over some of its products that have caused debilitating side effects, including birth defects, suicidality and heart attacks.

History of GlaxoSmithKline

GlaxoSmithKline (GSK) was created in 2001 in the merger of two established companies, Glaxo Wellcome and SmithKline Beecham. These companies originated in the United States and England, respectively, and their histories include a series of mergers that began in the 1800s.

Glaxo Wellcome was created in 1995 when Jason Nathan and Company, started in 1873, merged with  Burroughs Wellcome and Company, started by Henry Wellcome and Silas Burroughs in 1880.

SmithKline Beecham began with John K. Smith opening a drugstore in Philadelphia in 1830. He was joined by Mahlon Kline in 1865. Together Smith and Kline acquired numerous companies, like a vaccines business and, most notably, French Richards and Company, another well-respected drug wholesaler.

Meanwhile, Thomas Beecham began his Beecham’s Pills business in England in 1842. One of Beecham’s first products, a laxative made from aloe, ginger and soap, became very successful. Later, scientists from the company’s research laboratory discovered amoxicillin and sold the antibiotic as Amoxil in 1972. Amoxil was widely accepted. Beecham merged with Smith and Kline in 1989 to become SmithKline Beecham.

Fast facts about GlaxoSmithKline
Established: 2000 Founders: John Smith, Mahlon Kline and others
Headquarters: Brentford, England Size: More than 97,000 employees worldwide
2011 Sales: $44 billion

The merger of Glaxo Wellcome and SmithKline Beecham created GlaxoSmithKline in 2001. Today the company is divided into three main segments: pharmaceuticals (treating cancer, heart disease and HIV/AIDs), vaccines (treating hepatitis, polio and typhoid), and consumer health care (treating oral and skin problems) and has grown steadily, selling products in over 170 countries.

GSK partners with the World Health Organization (WHO), seeking to fight lymphatic  filariasis (intestinal worms). In 2002, the company donated 100 million albendazole tablets to treat the condition.  It also established one of the largest vaccine businesses in the world, distributing more than 1.1 billion doses of its vaccines to 173 countries.  Some of its major vaccines include Havrix, for hepatitis A; Pediarix, for diphtheria, tetanus, hepatitis B and polio; MenHibrix, for bacterial meningitis; and Fluarix Quadrivalent, a flu vaccine just approved in December 2012 that will be used for next year’s flu season.

More recently, GSK set itself apart by receiving approval for the first new lupus treatment in 50 years, and by providing laboratory equipment for the 2012 Olympics.

Products sold by GSK include drugs such as Augmentin, Avandia, Lamictal, Paxil, Serevent, and Zofran; vaccines such as Cervavix, FluLaval, Pediarix and Typherix; and health care items such as AquaFresh, Breathe Right, Sensodyne and Abreva.

Scandals Involving GlaxoSmithKline

GSK has continued to create and market new products. However, some of these new products have been the center of litigation after questions arose over consumer safety and the company’s marketing practices.

In 2010, GSK was held responsible for selling contaminated products like baby oil, in a whistle-blower lawsuit that began in 2004 and ended six years later with a $750 million settlement. The case involved 20 drugs that were contaminated in a Puerto Rico plant. Paxil, Avandia and the ointment Bactroban were some of the drugs that were contaminated. This facility manufactured products worth $5.5 billion annually, but was closed in 2009 after attempts to fix the plant following an FDA investigation failed.

GSK was involved in another scandal that ended in July 2012 with a $3 billion settlement – the largest health care fraud settlement in U.S. history. The case included charges of off-label marketing (promoting uses of a drug that the FDA has not approved) of antidepressants Paxil and Wellbutrin, and Advair, an asthma medication. Paxil was marketed to children and teens even though it was only approved for use in adults. Wellbutrin was marketed as a drug to help with weight loss, sexual dysfunction, drug addiction and ADHD even though it was only approved for depression.

GSK also failed to report that its diabetes drug, Avandia, could put people at risk for heart attacks. GSK’s sales department was also censured in the case, as reports showed that they were responsible for bribing doctors to sell their products through entertainment, vacations, concerts and payment to go on tours. The company admitted to both bribing doctors and encouraging off-label marketing.

In addition to paying the fine, GSK  is being monitored by the government for the next five years to ensure that it complies with marketing rules. The settlement was the conclusion of an investigation involving the FDA, FBI and the Department of Health and Human Services.

GSK Products May Cause Birth Defects & Heart Attacks

Before the merger, SmithKline Beecham participated in the antidepressant boom of the 1990s, introducing Paxil (paroxetine) in 1992. The drug sold well, becoming the fifth-most prescribed antidepressant in the United States by 2007. From the late-1990s to the mid-2000s, Paxil brought in $11.6 billion.

Unfortunately, Paxil comes with serious side effects, like suicidality in children and birth defects if taken during pregnancy. The packaging for the drug includes a black box, the FDA’s most serious warning, that it can cause increased suicidal thoughts and behavior in children and young adults. The birth defects associated with this drug are so severe that the pregnancy risk category was changed from C to the more hazardous designation D in 2005. Class D indicates that there is evidence of human fetal risk based on trials. An estimated 5,000 people have filed lawsuits against GSK after claiming Paxil led to birth defects or suicide.

In 1999, the FDA approved SmithKline Beecham’s Avandia (rosiglitazone) to treat type 2 diabetes. The drug is part of a classification known as thiazolidinediones, which includes Rezulin and Actos. Because the first of the thiazolidinediones, Rezulin, was found to cause liver damage and was recalled in 2000, Avandia was eagerly accepted by patients with type 2 diabetes. By 2006, it was the world’s best-selling diabetes drug, bringing in $3 billion in sales.

As Avandia sales soared, trials and hearings on Avandia began to cast doubt on the drug’s safety.  GSK claimed that clinical studies of the drug revealed that it caused only mild side effects. The FDA held hearings to measure the drug’s risks in 2007 and then severely restricted sales of Avandia in 2010 after the drug was linked to thousands of heart attacks, strokes and heart failures. (In late 2013, the FDA removed the restrictions.) More than 50,000 people have filed Avandia lawsuits against the company, forcing it to pay more than $460 million to resolve claims.

The FDA estimates that Avandia has caused as many as 100,000 heart attacks. Studies confirm that the drug increases the risk of heart attack as much 43 percent. Because of this, the drug now includes a black-box warning that it can cause congestive heart failure or myocardial infarction. GSK expects more cases to be filed and has set aside $6.4 billion for litigation and settlement costs.

Future of GlaxoSmithKline

GSK is looking to improve global access to its medicines, and develop 30 medicines over the next three years. The company is researching medicines and vaccines to treat HIV/AIDS, malaria and tuberculosis –all priority diseases noted by the WHO.

In an attempt to distance itself from the negative press following the $3 billion drug scandal, GSK began a voluntary initiative to make data from clinical trials open to the public. It hopes that by providing transparency, it can regain the public’s trust. Also, with open access, other research groups can contribute to studies and find quicker and more effective results.

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