Here’s how Sir Andrew Witty, who is due to end an eight-year tenure as the chief executive of British drug giant GlaxoSmithKline, would like to be remembered: In his shirtsleeves, in sub-Saharan Africa, meeting with impoverished villagers and then persuading first-world politicians of the need for drugs in the developing world. As the chief executive whose company developed a malaria vaccine and was first to test a vaccine for the Ebola virus. As the ethical exec who stopped paying doctors what were essentially bribes to talk up drugs. As the pharma boss who managed to stabilise a drug giant without a big, destructive merger.
“Honestly, I don’t regret a single decision,” says Witty, 52. “Someone smarter than me probably could have done it better. But I think it was the right direction for us to go in.”
History might remember a different Glaxo: The company whose revenues are flat since Witty took over and whose shares have underperformed its peers. The company accused of bribery in half-a-dozen countries. The firm that, in July 2012, pleaded guilty to civil and criminal charges in the US for marketing in illegal ways drugs like Paxil for depression and Avandia for diabetes, and agreed to pay $3 billion in fines, the largest such settlement ever. After that bruising Witty did something pharma chief executives almost never do. He apologised. “On behalf of GSK, I want to express our regret and reiterate that we have learnt from the mistakes that were made,” he said in a prepared statement.
What kind of mistakes? For one, prosecutors alleged that a decade before Witty took command Glaxo paid Drew Pinsky, who parlayed a radio show giving teenagers sex advice into the celebrity persona of “Dr Drew,” $275,000 for two months to talk about antidepressants and sex. Dr Drew gave an interview where he segued from talking about a woman who said she had 60 orgasms in a row to saying how Glaxo’s Wellbutrin was better for the libido than other antidepressants. Pinsky didn’t disclose at the time that Glaxo was paying him; no charges were brought against Pinsky. Similar shenanigans occurred with Avandia and Paxil, which were marketed to adolescents even though it wasn’t approved for them.
The maddening problem for pharmaceutical chief executives is that their tenures will be judged on the results of decisions made decades before they took command. Most of the scandals of Witty’s term predated him, but so did many successes: Glaxo’s malaria vaccine has been in the works for 30 years. These immutable links to the past, and to the future, weigh heavily on Witty as he looks to help choose his successor. “To have an industry with a 20-year product life cycle, but only to think one year ahead, is destined for disaster,” Witty says. “Your strategy needs to be consistent with that time frame. That’s what we tried to do.”
Witty has made some big moves of his own that will help determine whether future Glaxo chiefs succeed. In 2014 he made a deal with Novartis that traded GlaxoSmithKline’s marketed cancer drugs for Novartis’ vaccine and consumer businesses and a $16 billion cash payment. Most other big pharma companies are depending heavily on new cancer treatments, which cost $100,000 and up for a course of treatment. Witty thinks the future of such drugs is at risk because society will not continue to pay for them. In the short run that has hurt him, as insurers in the US have been willing to pony up. He has also focussed on countries in Asia and Africa whose pharmaceutical markets are just emerging.
The share price certainly doesn’t reflect a turnaround. But profits are up, and in the second quarter of this year new-product sales doubled to $1.5 billion, 17 percent of revenue. Glaxo is forecasting earnings growth of at least 11 percent for the year.
“His predecessor left an awful lot of issues for him to deal with, an awful lot of settlements that they just kicked into the long grass,” says Richard Buxton, the chief executive of Old Mutual Global Investors, the mutual fund. “I think whoever succeeds him will preside over a better set of outcomes for shareholders.”
GlaxoSmithKline, which is based in London, was formed on January 1, 2001 by the $76 billion merger of Glaxo Wellcome, the maker of Wellbutrin (depression) and Imitrex (migraines), and SmithKline Beecham, which made Avandia (diabetes) and Paxil (depression). Both companies had storied histories that involved breakthrough drugs, including AIDS drugs and antibiotics. But they were having trouble coming up with enough new hits.
Soon after the merger closed, the controversies began. Critics alleged that SmithKline had failed to publish studies that showed Paxil might increase the risk of suicidal thoughts in adolescents, while publishing studies that showed there was no danger. In 2004 New York attorney general Eliot Spitzer sued the company; the suit was eventually settled when Glaxo agreed to publish on the Internet summary results of its future drug studies.
Then came Avandia. In 2007 Steven Nissen, chairman of cardiology at the Cleveland Clinic, published a paper in the New England Journal of Medicine arguing that Avandia, GlaxoSmithKline’s blockbuster diabetes drug, caused heart attacks. The FDA eventually said no new patients should start taking the drug, ultimately erasing $3 billion of annual sales.
Witty claims that getting rid of this tried-and-true practice has caused “a complete transformation” of Glaxo’s marketing. “We’d say, ‘Thursday night would you please come to the Holiday Inn, have a chicken dinner, listen to a doctor talking about something?’” Witty says. “‘Great.’ What if that Thursday night wasn’t convenient for you? What if you’ve got kids?” Now, he says, digital tools mean that Glaxo can engage physicians with questions on their own terms. “If you want to talk to us at 3 am,” he says, “we’re there at 3 am.”
Witty also embraced the idea that Glaxo should publish all its data. Drug companies typically publish only their most positive studies, making medicines seem safer and more effective than they actually are. One analysis of clinical trials for 12 different antidepressants found that only one of 38 positive studies wasn’t published; of 36 negative studies, 3 were published in a way that was accurate, 22 were not published and 11 were published in a misleading way that made the results appear positive when they were not.
Witty insisted Glaxo make public the results of all 1,700 studies the company had conducted since 2000. This was well above and beyond what Glaxo’s settlement with Eliot Spitzer forced it to do. In 2013 he signed a pledge with a group called AllTrials, which required further promises to make data public, to try to push the rest of the industry to follow. The man behind AllTrials, a UK doctor and newspaper columnist named Ben Goldacre, had written a book called Bad Pharma: How Drug Companies Mislead Doctors and Harm Patients and had been sceptical about Witty’s previous attempts at transparency. But the day Glaxo took the pledge he was gushing, blogging that Glaxo’s commitment was “excellent and amazing.”
In 2014 Glaxo started its Ebola trial. The next year it received European approval for Mosquirix, the malaria vaccine it had developed with funding from the Bill & Melinda Gates Foundation.
Next, the malaria vaccine will be evaluated by the World Health Organization. Witty, who spent years in malaria-ridden sub-Saharan Africa, says one of the most emotional moments of his career happened when he got initial data that showed the vaccine could cut infection rates by nearly half (a number since revised downward).
It would be nice if Witty’s focus on improving the world were also making Glaxo run on all cylinders. But it’s not that simple, and right now there is one big question facing the company: What will happen as generic competition emerges for its top-selling product, Advair, an inhaler for asthma and COPD?
(This story appears in the 14 October, 2016 issue of Forbes India. To visit our Archives, click here.)