GSK forced to hand over documents in US inquiry

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The Independent Online

GlaxoSmithKline has been ordered to hand over internal documents to the state prosecutor in Minnesota, which is investigating whether the pharmaceuticals giant colluded with other companies to prevent cheap drugs being imported into the US.

GlaxoSmithKline has been ordered to hand over internal documents to the state prosecutor in Minnesota, which is investigating whether the pharmaceuticals giant colluded with other companies to prevent cheap drugs being imported into the US.

GSK was yesterday planning an appeal against the judgment, which it described as "disappointing".

The escalating legal battle with Minnesota's attorney general, Mike Hatch, comes as the pharmaceuticals industry has dramatically increased its lobbying efforts against "drug reimportation", the practice of shipping medicines over the border from Canada where price controls make them up to 50 per cent cheaper.

The issue is becoming a key electoral issue and President George Bush's health secretary sparked alarm in the industry last week by saying reimporation was "inevitable".

The Minnesota district court has ordered GSK to hand over Canadian documents that Mr Hatch claims will show whether the company colluded with its UK peer AstraZeneca and other pharmaceutical giants when it threatened last year to boycott wholesalers whose purchases found their way into the US.

"Other prescription drug companies are taking simultaneous and very similar actions to prevent Canadian pharmacies and wholesalers from selling drugs to US citizens," Mr Hatch's successful legal representation claimed. "The State has reasonable grounds to believe that GSK has combined or conspired with other pharmaceutical manufacturers, wholesalers, distributors and/or retailers to refuse to supply prescription drugs to Canadian pharmacies engaged in the sale of GSK's drugs to Minnesota purchasers."

In January last year GSK said it would blacklist wholesalers it suspected of selling drugs over the border via websites or other means. AstraZeneca took a less public stand, but followed suit within weeks. Most large pharmaceuticals companies now review Canadian pharmacy orders for suspiciously high quantities.

A Minnesota senior citizens group launched a drug reimportation scheme last January that has been stymied by the industry's actions. The legal investigation into GSK is one strand of Mr Hatch's campaign against what he calls the excessive profits and lobbying power of Big Pharma.

The absence of government price controls has made the US drug market the most lucrative in the world, accounting for about a third of GSK's profits last year. Jean-Pierre Garnier, the company's chief executive, has argued that the threat of a collapse in US drug prices to Canadian levels is one of the most serious issues facing the industry.

Mr Hatch is demanding an end to the boycott threat.

GSK has flatly rejected suggestions it colluded with competitors, dismissed Mr Hatch's campaign as electioneering, and said drug reimportation was illegal and dangerous. "Drugs may be contaminated, counterfeit, improperly stored, subpotent, outdated or arrive without proper labelling," the company said in a statement. "Because of these safety concerns, the Food and Drug Administration, the US regulator, has asked pharmaceutical manufacturers and distributors to help address the problem of illegal imports."

The FDA's support against reimportation had given the pharmaceutical industry a boost, but political pressure for reimportation is growing.

Last week, Tommy Thompson, the US health and human services secretary, said the passage of a congressional bill to approve reimportation was inevitable, even though the White House remains opposed.

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