GSK: Dried Baby Milk, Beecham's Pills and a $3 Billion Fraud Plea

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GSK's family tree starts with Joseph Nathan, who founded a trading company in Wellington, New Zealand, in 1873 and by 1904 was drying surplus milk from Bunnythorpe dairy farms into baby food sold as Glaxo, with the slogan "Glaxo builds bonny babies." John K. Smith opened a Philadelphia pharmacy in 1830, and Thomas Beecham launched Beecham's Pills, a laxative, in England in 1848. Consumer products like Macleans toothpaste and Lucozade funded the move into drugs, starting with Glaxo's vitamin D in 1924. At Burroughs Wellcome, founded in London in 1880, Gertrude B. Elion and George H. Hitchings designed fake purines to jam cell replication and won the 1988 Nobel Prize in Medicine.

SmithKline merged with Beecham in 1989, Glaxo with Wellcome in 1995, cutting about 10,000 jobs, and the two combined as GlaxoSmithKline in December 2000. In 2012 GSK pleaded guilty and agreed to pay $3 billion, then the largest health care fraud case in U.S. history, over off-label promotion of Paxil and Wellbutrin and failure to report safety data on Avandia. In 2013 Chinese authorities found nearly $500 million in kickbacks since 2007, routed through over 700 travel agencies and consulting firms. A Chinese court fined GSK $490 million, and its British head of China operations got a suspended sentence and was deported.

• Elion and Hitchings developed mercaptopurine and thioguanine for leukemia, pyrimethamine for malaria and acyclovir for herpes.
• Under a five-year corporate integrity agreement, GSK stopped paying health professionals to promote products and decoupled sales pay from prescription volume.
• RTS,S, the first malaria vaccine, was developed with PATH and the Gates Foundation and priced at 5 percent above cost in developing nations.
• In 2022 GSK spun off its consumer health business as Haleon, after buying Tesaro and Sierra Oncology.
• After the 2022 invasion of Ukraine, GSK halted trials and advertising in Russia but kept supplying medicines and vaccines.