Tuesday, July 23, 2013

Bad GSK in China --> Lower Drug Prices for Patients. Bad GSK in U.S. --> Money for Bureaucrats!

"Savings made as a result of proposed changes to our operational model will be passed on in the form of price reductions (my emphasis), ensuring our medicines are more affordable to Chinese patients."

That's how Abbas Hussain, GKS's President International – Europe, Japan, Emerging Markets & Asia Pacific ended an official statement regarding recent meetings with Chinese authorities to discuss how GSK senior executives appeared to have violated Chinese law.

By "operational model," I assume Hussain means using travel agencies as vehicles to bribe doctors, hospitals and government officials in order to sell more drugs at higher prices. Changing that "model" will result in cost savings, which GSK will pass on to Chinese patients. Sweet!

In the U.S., however, when drug companies are caught conspiring with physicians to sell drugs off-label or engaging in outright kickback schemes, all the benefit (i.e., money in the form of fines) goes to the U.S. Treasury and FDA bureaucrats, NOT patients.

In 2012, for example, GSK agreed to plead guilty to criminal charges of illegally marketing drugs and to pay the U.S. government $3 billion, which at the time was the largest health-care fraud settlement in U.S. history (read about that case here).

Imagine that $3 billion being used to lower drug prices in the U.S. -- say by eliminating co-pays or providing free prescriptions to patients without insurance. That's enough money to supply perhaps 6 months of free Avandia to every U.S. diabetes patient who was prescribed it by their physician. Of course, that would add injury to insult: part of GSK's "criminal activity" was the withholding of important safety data about Avandia from the FDA.

For a followup, see "GSK, GSK, GSK: TSK, TSK, TSK!"

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