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.
Failing to Comply With NJ Rent Control Exemption May Prove Costly
What Developers Need to Know About New Jersey’s Rent Control Exemption Law to Ensure Entitlement to Exemption for Newly Constructed Multi-family Housing. A property owner in Jersey City is facing a $400 million federal class action lawsuit alleging that the landlord did not follow the procedural steps required to be eligible for exemption from local […]
Crypto Securities Law: When Tokens Become Investment Contracts
The application of traditional federal securities laws to crypto assets continues to evolve. In some cases, the Securities and Exchange Commission (SEC) considers tokens and other digital assets to be securities. This makes them subject to federal securities law, including the Securities Act of 1933 and the Securities Exchange Act of 1934. This classification has […]
The Due Diligence Process for NY Condominiums and Cooperatives
While the New York City real estate market can be extremely competitive, moving too quickly often backfires. Before purchasing a condominium or cooperative in New York City, it is important to do you homework. Purchasing property in NYC can involve a dizzying number of legal issues. These include condo and co-op rules, rent restrictions, and […]
Smart Contract Legal Issues: Drafting Agreements for Blockchain
Smart contracts feature a unique blend of legal agreement and technical code. This innovation has the potential to reshape how business is conducted. At the same time, smart contract legal issues around enforceability, jurisdiction, identity, and compliance are common. The legal framework for these self-executing agreements is still evolving. What Are Smart Contracts? Smart contracts, […]
Are Stay Interviews the Key to Retaining Top Talent?
Retaining top talent continues to be one of the greatest challenges facing employers today. Even in an employer’s market, the loss of a key employee can disrupt operations and result in significant costs. While compensation plays a role, long-term retention often depends on workplace culture, communication, and employee engagement. One increasingly popular strategy for improving […]
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
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!
