Stephen Foley: GlaxoSmithKline case is a frightening reminder of why we need rules
Stephen Foley is a former Associate Business Editor of The Independent, based in New York. He left in August 2012. In a decade at the paper, he covered personal finance, the UK stock market and the pharmaceuticals industry, and had also been the Business section's share tipster. Between arriving with three suitcases in Manhattan in January 2006 and his departure, he witnessed and reported on a great economic boom turning spectacularly to bust. In March 2009, he was named Business and Finance Journalist of the Year at the British Press Awards.
Tuesday 03 July 2012
A decade ago, before everyone hated the banks, it was the pharmaceuticals industry which was Public Enemy No 1 – and the details revealed in GlaxoSmithKline's $3bn legal settlement in the US are a reminder of why.
Safety regulators are scrupulous about approving drugs to treat particular diseases for particular groups of people, and drug companies are banned from marketing the drugs for anything else and to anyone else, but time and again companies have been discovered making an end run round the regulations.
They have every incentive. Doctors are free to prescribe any drug for any condition if they believe it will help their patient, and in some blockbuster drugs this "off-label" use can account for one-quarter of all prescriptions or more.
For patients who get prescribed a new drug early, before regulators get round to sealing their approval, off-label use can be a huge boon. But cases like GSK's, where Paxil was later discovered to increase suicidal thoughts in children, are a reminder why we have scrupulous regulators. When drug companies break the rules, the potential consequences might be more frightening even than anything unleashed by the banks.
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