Gary Null and Nancy Ashley – BAD TO THE BONE: Fraud IS the Business Plan

Part I – GlaxoSmithKline

You would have thought the way the stock price rose on Monday, July 2, 2012, that good news had been reported about British company GlaxoSmithKline instead of the announcement that the company had agreed to plead guilty to misdemeanor charges and pay a $3 billion criminal settlement to settle the largest case of healthcare fraud in U.S. history. In fact, the settlement was previously disclosed by GSK to its shareholders and was at least $150 million lower than expected. Not only is this a relatively paltry sum for a company which brings in $45 billion a year in revenue, but it essentially allows Glaxo to be absolved of its many crimes, and the injuries and deaths resulting from its dangerous pharmaceuticals over the past decade. It used to be that in most cases, a fraud settlement of more than a billion dollars would destroy a company. But as we have repeatedly seen over the years, this is just a regular cost of doing business for the pharmaceutical industry. Ultimately, this $3 billion fine is just a line item on GSK’s balance sheet.