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Last Updated: Friday, 4 June, 2004, 20:21 GMT 21:21 UK
A Spitzer in the eye for Glaxo
By Stephen Evans
BBC North America Business Correspondent

Eliot Spitzer
Fearless Spitzer has already taken on the Mob in court

Is no target too big for Eliot Spitzer, the Attorney General of the State of New York?

He humbled the biggest names on Wall Street when he caught analysts at the largest investment banks telling the public one thing while believing another.

He's trying to get back a good few millions from Richard Grasso, the former chairman of the New York Stock Exchange.

And as a younger man, he took on the New York Mob in the shape of the Gambino family - and not only survived but won.

Now, he's turned his sights on the giant pharmaceutical company, GlaxoSmithKline.

His allegation, made in the Supreme Court of the State of New York, is that it didn't tell doctors in America about the doubtful results of trials of one of its drugs, Paxil, an anti-depressant.

'Suicidal thinking'

According to his office, GSK made at least five studies of the drug and its use as a treatment of depression in adolescents, but only published one of these.

Publishing all of them would have revealed that in some cases, it did nothing and might even have increased the risk of "suicidal thinking".

On top of that, Mr Elliott quotes an internal Glaxo memo that says that the company intended to manage "the dissemination of data in order to minimize any potential negative commercial impact".

Watch out when Eliot Spitzer comes after you
The Gambino family

The company put out a statement: "GlaxoSmithKline has acted responsibly in conducting clinical studies in pediatric patients and disseminating date from those studies.

All pediatric studies have been made available to the FDA (Food and Drug Administration) and regulatory agencies worldwide. We have publicly communicated data from all pediatric studies. As for the 1998 memo, it is inconsistent with the facts and does not reflect the company position".

Legal lines

The nub of the charge seems to be whether telling the authorities about the full effects of a drug is enough. Mr Spitzer contends not. The information has to be disseminated to doctors.

He says that Glaxo's sales representatives portrayed the drug as having "remarkable efficacy and safety in the treatment of adolescent depression".

An Indian researcher
Did Glaxo withhold Paxil trial data from doctors?

So the legal lines are drawn.

Mr Spitzer's modus operandi is to get a sniff of wrong-doing, collect the evidence and then go to the perpetrator seeking change in the structure of the industry.

In the case of the investment banks, for example, he ordered the production of e-mails, 94,439 of which his staff then read.

Among this forest-load of paper they eventually found the irrefutable evidence: e-mails showing, on the one hand, a bank analyst writing that a stock was "an attractive investment, but, on the other, bank e-mails saying that the very same company was "a piece of ordure" (or words to that effect).

Undercover

When he tackled the Mob, he decided to break a racket in which the Gambinos controlled the trucking business in the garment district of New York. Nothing moved on the trucks without the Gambinos getting a slice. Opposition could be fatal.

Spitzer actually set up a false garment factory - a sweatshop - to get the evidence he needed. He brought in a state trooper to run it undercover and hired thirty workers who had no idea it was a front.

With the evidence through tapes and wiretaps, he then charged the Gambinos with a relatively trivial charge, breaking anti-trust law. With this threat over them, they agreed to pay $12 million in fines - but, crucially, stay out of the business.

'Watch out'

Nobody is equating GlaxoSmithKline with the Gambinos, but one wonders if Mr Spitzer has broader intentions with his suit against the British pharmaceutical company.

There has been much criticism of the industry in general for allegedly promoting medicines that may not be that beneficial, particularly anti-depressants for youngsters.

Does Mr Spitzer just want reparation in one, isolated case - or is he going after the whole industry.

If he is, the Gambinos might offer some advice: "Watch out when Eliot Spitzer comes after you".



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