Corporate Social Responsibility: What Went Wrong at Glaxosmithkline?

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Corporate Social Responsibility: What Went Wrong at GlaxoSmithKline?

When London-based GlaxoSmithKline (GSK) paid a $750 million dollar settlement as part of a plea agreement that required it’s Cidra, Puerto Rico subsidiary SB Pharmco to plead guilty for knowingly selling contaminated medicine, it laid to rest any doubts that its business practices were in direct conflict with its commitment to both quality and to creating a strong ethical culture. There are, nevertheless, important issues that extend beyond the facts in evidence. This paper does not seek to re-litigate the government’s case against GlaxoSmithKline. It, instead, seeks to accomplish three basic goals: to offer insights into the failure of the Food and Drug Administration to carry out it’s post-approval mission which is to protect the public from unsafe drugs by enforcing best manufacturing practices; to explore the endemic failure of management at every layer to engage in ethical decision making; and finally to suggest measures that, if taken, might have prevented the mishandling of this matter by GlaxoSmithKline.

Not unlike the Minerals Management Service’s failure to provide the appropriate regulatory oversight of operators of the Deepwater Horizon offshore drill rig during the years leading up to the 2010 gulf oil spill, the U.S. Food and Drug Administration (FDA) failed in its statutory obligation to protect the public from unsafe drugs. Pursuant to FDA policy, as a part of the drug approval process, manufacturing facilities have to be inspected and found in compliance with regulatory guidelines and with what are called Current Good Manufacturing Practices (cGMPs). The FDA is authorized to delay drug approval pending remediation of defects, though it is not required by law to do so (Food and Drug Administration, 2010). In February 2002 the FDA established a new inspection regimen for the purpose of “evaluating through factory inspections, including the collection and analysis of associated samples, the conditions and practices under which drugs and drug products are manufactured, packed, tested and held, and monitoring the quality of drugs and drug products through surveillance activities such as sampling and analyzing products in distribution” (Center for Drug Evaluation and Research, 2002). However as late as 2006, a report by the Institute of Medicine shed doubt over whether the FDA was up to the task of protecting the country against unsafe medicine. It found that “The drug safety system is impaired by the following factors: serious resource constraints that weaken the quality and quantity of the science that is brought to bear on drug safety; an organizational culture in CDER that is not optimally functional; and unclear and insufficient regulatory authorities particularly with respect to enforcement” (Institute of Medicine, 2006). Vermont Senator Bernie Sanders, a critic of the critic of the pharmaceutical industry, suggests that the cozy relationship between federal regulators and pharmaceutical companies, GlaxoSmithKline among them, increases the likelihood of violations going undetected and unpunished: As you indicated, quite appropriately, I don’t think it was a coincidence that on 1 day Glaxo says, ‘‘We’re going to limit the supplies to Canada,’’ and then a few days later guess what happens, the FDA suddenly says, ‘‘Oh, we are really interested in this issue, really concerned about the safety issue.’’ The argument that the drug companies and their allies—including, I’m afraid to say, the FDA—are giving is that they are concerned about the safety issue and their desire to protect the health and well-being of the American people. In my view, this position is absolutely false and without merit. (108th Congress 1st Sess., 2003)

In the months leading up to the enactment of the Medicare Modernization Act of 2003 and the creation of the Medicare Part D prescription drug benefit, the...
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