Conflicts of interest are a chief compliance concern in many industries, from financial services to information technology. In the pharmaceutical field, one company is taking dramatic steps to reduce its potential liability by significantly changing its business model.
GlaxoSmithKline recently announced that it plans to address their compliance concerns and halt the commonly used practice of paying medical professionals to promote its medications. The drug maker will also stop setting marketing goals based on the number of prescriptions that doctors write.
The decision follows several recent scandals involving conflicts of interest in the pharmaceutical industry. It also begins to address the long-standing criticism that the companies routinely put profits before patients.
For GlaxoSmithKline, its latest legal headache involves allegations that four senior Chinese executives paid kickbacks to Chinese doctors for prescribing their drugs. According to Chinese officials, the executives used travel agencies as intermediaries to pay bribes to government officials, doctors, and other members of the Chinese drug industry.
In this country, the company paid a record $3 billion fine for promoting drugs for unapproved uses and failing to report safety problems with several popular medications. Following last year’s settlement, the company vowed to overhaul its sales and marketing tactics.
In addition to penalties for illegal kickbacks and false marketing claims, the Affordable Care Act (ACA) also places additional pressure on drug companies to be more open about their relationships with medical professionals. Under an ACA provision entitled the “Physician Payment Sunshine Act,” drug makers must disclose any transfer of value to a physician that exceeds $10, including money, gifts, meals, and other perks.
Drug companies must also report whether a physician or his or her family members have an ownership stake in the company outside of publicly traded stock. The information will be made publicly available with the goal of educating patients about possible conflicts of interest that may impact their care.
Given the increased regulatory and public scrutiny, it would not be surprising if other pharmaceutical companies follow GlaxoSmithKline’s lead.
High-profile founder litigation is more than just a media spectacle. For startup founders, these cases underscore the legal and structural risks that can arise when rapid growth outpaces formal oversight. While launching a new company can be both an exciting and deeply rewarding endeavor, founders must be mindful that it also comes with significant risks. […]
Corporate Governance Reviews: A Practical Guide for New Jersey Companies
Every New Jersey company should periodically evaluate its governance framework. Strong corporate governance protects directors and officers, builds investor confidence, reduces litigation exposure, and positions a company for sustainable growth. The first quarter of the year is a great time to evaluate your corporate governance practices and perform any routine maintenance needed to keep that […]
What to Do After Being Served with a Lawsuit: Steps to Protect Your Legal Rights
Being served with a lawsuit is one of the most stressful legal events a business or individual can face. Whether the claim involves a contract dispute, an employment matter, an intellectual property issue, or another legal challenge, the actions you take in the first few days can significantly shape the outcome of your case. Acting […]
Will 2026 Be a Banner Year for SPACs? Understanding the Risks and Opportunities
Special Purpose Acquisition Companies (SPACs) continue to gain momentum as we move through 2026. After enduring a significant contraction following the 2021 boom and the regulatory scrutiny that followed, SPAC activity rebounded sharply in 2025 and now carries forward into 2026 with real momentum. The SPAC resurgence reflects broader improvements in both market conditions and the […]
Why Compliance Monitoring Matters for NY and NJ Businesses
Compliance programs are no longer judged by how they look on paper, but by how they function in the real world. Compliance monitoring is the ongoing process of reviewing, testing, and evaluating whether policies, procedures, and controls are being followed—and whether they are actually working. What Is Compliance Monitoring? In today’s heightened regulatory environment, compliance […]
When Are New Jersey Business Owners Personally Liable for Corporate Debt?
New Jersey personal guaranty liability is a critical issue for business owners who regularly sign contracts on behalf of their companies. A recent New Jersey Supreme Court decision provides valuable guidance on when a business owner can be held personally responsible for a company’s debt. Under the Court’s decision in Extech Building Materials, Inc. v. […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
