Secret Tapes Lay Bare Glaxo's Scorched-Earth Corporate Culture

(MoneyWatch)  Just when you thought the news on Avandia -- GlaxoSmithKline (GSK)'s troubled diabetes drug -- couldn't get any worse, it does. Steve Nissen, the Cleveland Clinic researcher who first went public with a study showing that Avandia increases heart-attack risk, secretly taped a meeting he had with GSK officials and caught them dissembling -- to put it mildly.

The event is yet one more example of GSK's shoot-first, ask-questions-later approach to dealing with legal or PR challenges, one that's now coming back to haunt the company.

As Nissen discussed his concern that Avandia was needlessly killing people, GSK's chief medical officer, Ronald L. Krall (pictured at right), stonewalled and obscured the fact that he had already improperly received a copy of Nissen's impending Avandia study and that GSK was working on a rival study of its own. (Kudos to NYT reporter Gardiner Harris for breaking the story, by the way.)

In another black eye for the company, Pharmalot revealed today that Matthew Mintz, a doctor and pharma blogger for Forbes.com, failed to disclose that GSK paid him $11,050 in speaker and consulting fees, even though he has spent much of his time defending Avandia. (His item yesterday, for instance, is headlined "Another Unwarranted Avandia Scare.")

And that news comes after it was revealed that GSK employed a fixer, Tachi Yamada, who spent part of his time making calls strong-arming the bosses of scientists working on research that highlighted Avandia's risks.

If you need someone to blame, look to Sanofi-Aventis (SNY) CEO Chris Viehbacher. Why? Because Viehbacher was the head of GSK's U.S. pharma unit during the decade in which this take-no-prisoners atmosphere was installed. These tactics weren't only on display in the Avandia case -- there are plenty of other examples of GSK's studs-up aggression. Here's a few:

• GSK spent $900 million on lawyers in 2009.
• GSK utilizes its blog to knock down reports it believes are false.
• When the FDA issued a caution about its weight-loss drug Alli, GSK's statement insisted in essence that the FDA was wrong -- not only was there no evidence linking Alli to liver problems, GSK said, but there was no possible way that could happen.
• GSK once used (but has now abandoned) a ghostwriting program, titled "Cassper," to help friendly doctors write trivial studies that showed its drugs in a positive light.
• The company ignored its own ethics code in an attempt to reduce its tax bill.
• It was Viehbacher (pictured at right) who, while at GSK, wrote to the governor of Massachussetts threatening to end its businesses there unless the state did its bidding.
• When GSK needed a new corporate counsel, it hired the most vehement anti-regulation lawyer in America, Daniel Troy.
• And it was GSK, including Sanofi's Viehbacher at the time, who sued Nelson Mandela to keep the price of HIV drugs high in South Africa (a move that Viehbacher now admits was a mistake).

To give you an example of GSK's overreaching defense of itself, look at its press release from Feb. 20. On the subject of Avandia and heart attacks it says:

... the scientific evidence simply does not establish that Avandia increases cardiovascular ischemic risk or causes myocardial ischemic events.

Now look at GSK's own RECORD study of Avandia, published in The Lancet. That study had about 320 patients in two arms, one treated with Avandia (here referred to as rosiglitazone) and one with competing drugs. It concluded:

Heart failure causing admission to hospital or death occurred in 61 people in the rosiglitazone group and 29 in the active control group

Addition of rosiglitazone to glucose-lowering therapy in people with type 2 diabetes is confirmed to increase the risk of heart failure and of some fractures, mainly in women.

GSK, of course, has every right to defend itself and its products. And the company deserves praise for its more recent moves toward transparency under CEO Andrew Witty. But it may be time for GSK to ask itself whether its policy of no-holds-barred fighting is setting it up for more losses than wins.

Related:

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• UPDATE: Paranoia Sweeps GSK Sales Reps Over Management "Spyware" on Laptops
• GSK Earnings: $900M Spent on Lawyers; Silence on Job Cuts
• GlaxoSmithKline Layoffs Follow Promise of No Cuts at National Sales Meeting