Largest Pharmaceutical Misconduct Settlement in US History as GSK Fined Over $ 3 Billion
Pharmaceutical drug maker GlaxoSmithKline will pay $3 billion and plead guilty to federal charges to resolve a slew of criminal and civil issues stemming from its use of kickbacks, misbranding and other misconduct to market drugs such as Paxil, Wellbutrin and Advair, the U.S. government announced. (The Washington Post)
The agreement is the largest health care fraud settlement in US history, spanning nearly every state, according to the Justice Department. Its also the largest payment ever by a drug company.
The settlement is unprecedented in both size and scope, said James M. Cole, deputy attorney general, in a statement.
GSK apparently promoted drugs for previously unapproved uses, including advertising Paxil for children, no matter that the antidepressant had not been approved for anyone under the age of 18.
Matt Kozar on ABC News said that GSK was marketing the medicines for off-label uses in order to boost profits for the company. The company also failed to report some safety problems with the diabetes drug, Avandia, including the fact it sharply increased the risk of heart attacks and congestive heart failure in some patients. Since 2007, the FDA has added warnings to Avandia labels to alert doctors to these risks. The British company even sponsored dinners and spa programs in the drugs name, prosecutors said.
Glaxo also used sham advisory boards and speakers at lavish resorts to promote depression drug Wellbutrin as an option for weight loss and a remedy for sexual dysfunction and substance addiction, according to the government. Customers were urged to use higher-than-approved dosages, the government added.
The health care giant was also accused by prosecutors of advertising off-label uses for asthma drug Advair, seizure medication Lamictal and nausea treatment Zofran while also making false claims about the safety and usefulness of such drugs.
The government also accused Glaxo of offering kickbacks to medical professionals, dangling cash, trips to Florida, and tickets to basketball games as incentives to promote and prescribe its drugs.
Glaxo also submitted incorrect prices for its products to the government, allowing it to underpay rebates owed to programs such as Medicaid, prosecutors said.
Two whistleblowers (Thomas Gerahty, a former senior marketing development manager and Matthew Burke, a former regional Vice President) provided the government with overwhelming evidence that was at the heart of the government’s case against GlaxoSmithKline.