Jean-Pierre Garnier, the chief executive of GlaxoSmithKline, lashed out at "greedy" lawyers and a "broken" justice system in the US, as giant legal settlements contributed to a disappointing set of figures from Europe's largest drug maker.
GSK shares tumbled after the company missed analysts' forecasts for 2003 and promised only flat earnings in 2004. The bottom line was hit by £178m of charges for restructuring, falling sales of its best-selling drugs, and a £223m legal bill which included settling US anti-trust litigation over an arthritis pill.
GSK still claims it acted properly in the face of cheap copies of its arthritis treatment, Relafen, but wholesalers, customers and generic drug manufacturers accused it of claiming false patents to keep rivals off the market. Referring to the settlement, which was first revealed last week, Dr Garnier said: "The anti-trust law is poorly written and it is penalising a lot of people who have done nothing wrong - and you can quote me on this.
"The legal system in the US is broken. We need tort reform and we need it now. Lawyers are benefiting in a scandalous way from this flawed system. They are the number one contributors to political parties at the Senate level, and they are blocking reform. There are so many scandals we can talk about, it is not even funny."
Dr Garnier's tirade came as the company's statement revealed yet another subpoena, this time from the US Attorney's office in Colorado. A whistleblower has prompted an investigation into the way GSK markets some of its most lucrative drugs in the state.
On GSK's new remuneration policy, in which Dr Garnier's contract will be reduced to one year and other cuts will be made to a £15m "golden parachute", he said he bet the proposals would be waived through by shareholders at the annual meeting in the spring. The previous policy was rejected last year. The new proposals were "an excellent compromise", Dr Garnier said.
GSK's shares slid 43p to 1,130p after the company reported a profit of £6.3bn for 2003, up from £5.5bn the year before but disappointing compared with the City's forecasts.Reuse content