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    November 9, 2010

    Ex-Glaxo Executive Is Charged in Drug Fraud


    In a rare move, the Justice Department on Tuesday announced that it had charged a former vice president and top lawyer for the British drug giant GlaxoSmithKline with making false statements and obstructing a federal investigation into illegal marketing of the antidepressant Wellbutrin for weight loss.

    The indictment grabbed the attention of pharmaceutical executives who have been bracing for a long-promised government crackdown on company officials — rather than the corporations themselves — in drug-fraud cases that have resulted in billions of dollars in fines and payments.

    “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 where federal officials warned they were focusing on individuals. “This is indicative of the F.D.A. and Justice strategy to go after the very top-ranking managing officials at regulated companies.”

    The indictment accuses the Glaxo official, Lauren C. Stevens of Durham, N.C., of lying to the Food and Drug Administration in 2003, by writing letters, as associate general counsel, denying that doctors speaking at company events had promoted Wellbutrin for uses not approved by the agency. Ms. Stevens “made false statements and withheld documents she recognized as incriminating,” including slides the F.D.A. had sought during its investigation, the indictment stated.

    Tony West, assistant attorney general for the civil division, said in a statement, “Where the facts and law allow, the Justice Department will pursue individuals responsible for illegal conduct just as vigorously as we pursue corporations.”

    Ms. Stevens has assembled a high-powered legal defense team. “She’s pleading not guilty,” said Reid H. Weingarten, one of her lawyers, who previously represented Bernard J. Ebbers, former chief executive of WorldCom, and Mark A. Belnick, former Tyco counsel. “We’re going to trial and looking forward to it, and we fully expect her to be vindicated.”

    Brien T. O’Connor, a lawyer with Ropes & Gray, said in a statement, “Lauren Stevens is an utterly decent and honorable woman. She is not guilty of obstruction or of making false statements. 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.”

    Ms. Stevens, who is 60, could not be contacted Tuesday. No one answered her home telephone.

    She is retired, according to Mary Anne Rhyne, a spokeswoman for GlaxoSmithKline. Ms. Rhyne said the company was cooperating fully with a federal investigation into allegations of illegal sales and marketing of Wellbutrin. Last year, it set aside $400 million to resolve the case, which is still pending.

    Two weeks ago, in an unrelated case, GlaxoSmithKline agreed to pay $750 million to the government to settle civil and criminal complaints that it sold tainted or ineffective products from a large manufacturing facility in Puerto Rico.

    The theme of the drug-law industry conference last month was “more individuals, more often.” In a presentation, Eric M. Blumberg, a deputy chief counsel at the F.D.A., warned: “If you are a corporate executive — or counsel advising such a client — do not wait for the first case to decide now is the time to comply with the law.”

    “Once you threaten somebody with jail, people really start paying attention,” said Frances H. Miller, a Boston University law professor and expert on health care policy. “This fits in that framework of sending very high-profile messages very fast.”