Former Glaxo General Counsel Indicted For Cover Up - In House
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Former Glaxo General Counsel Indicted For Cover Up

The indictment of a former Vice President and General Counsel of GlaxoSmithKline, Lauren Stevens, is newsworthy beyond the individual allegations affecting the ex-executive. This prosecution may be the first wave of a sea change in how the government pursues not just companies, but company executives for wrongdoing. Stevens was charged in connection with her actions the Department of Justice says obstructed a federal investigation regarding GSK's promotion of the drug Wellbutrin for off-label uses.

This is a long-promised change in strategy, reports The New York Times. Pharmaceutical companies have been the target of many investigations regarding the promotion of their drugs for off-label uses, but until now, the individual executives and corporate counsel have not been under fire in the same way. "This is absolutely precedent-setting -- this is really going to set people's hair on fire," said Douglas B. Farquhar, a Washington lawyer who recently presided at a panel on law enforcement during a drug industry conference.

Will Lauren Stevens be just the first of many? It will in some part depend on how successful the case is, of course. The charges against her allege that as corporate counsel, she had specific knowledge that some of GSK's paid speakers were promoting Wellbutrin for use in weight loss, a treatment not approved by the FDA. The government says Stevens not only knew of this, but actually withheld slides the speakers used in their presentations from the agency, reports The Times.

The sticking point will, of course, be the advice of outside counsel, which Stevens said she relied on when making her decisions. A statement by one of Stevens' attorneys, Brien T. O'Connor, from Ropes & Gray, said in part, "Everything she did in this case was consistent with ethical lawyering and the advice provided her by a nationally prominent law firm retained by her employer specifically because of its experience in working with F.D.A."

Now the issue of attorney-client privilege arises, as The Times Dealbook points out. The client however, is GSK, not Stevens, so the company would have to waive the privilege to allow Stevens to pursue the defense. This leads to further issues with disclosure by the company and with pinning responsibility for Steven's decisions on outside counsel.

As Dealbook notes, at this time, the only certain outcome of the case is that corporate counsel will become even more cautious in their actions in protecting their companies and now, themselves, from prosecution.

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