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Pharma firm GlaxoSmithKline forced to pay record $3 billion fraud settlement

By Agence France-Presse
Monday, July 2, 2012 15:20 EDT
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New illicit drugs are appearing on the European Union market at a rate of nearly one a week, the European Monitoring Centre for Drugs and Drug Addiction has said. (AFP Photo/Philippe Huguen)
 
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GlaxoSmithKline was socked with $3 billion in fines by US authorities Monday over charges it marketed drugs for unauthorized uses, held back safety data, and cheated the government’s Medicaid program.

The Justice Department said GSK was fined over misbranding its drugs Paxil and Wellbutrin, and for holding back data while making unbacked claims for its diabetes drug Avandia.

GSK pleaded guilty and agreed to the fines in what the department called the largest health care fraud settlement in US history.

GSK, one of the world’s largest health care and pharmaceuticals companies, admitted to charges that it had promoted antidepressants Paxil and Wellbutrin for uses not approved for by US regulators, including treatment of children and adolescents.

The British drugmaker also conceded charges that it held back data and made unsupported safety claims over its diabetes drug Avandia.

Altogether it will pay $1 billion in criminal fines and forfeitures over charges relating to the three drugs.

In addition, the company will pay $1.7 billion in civil fines for illegal promotion of those drugs as well as others; paying kickbacks in their marketing; and making unsubstantiated claims about Avandia’s safety and efficacy.

And separately, GSK is being fined $300 million to settle charges it underpaid rebates it owed to the US Medicaid program.

“Today’s resolution is significant not just because GSK’s conduct was egregious or because it is the largest health care fraud settlement in the Department’s history,” said acting assistant attorney general Stuart Delery.

“For far too long, we have heard that the pharmaceutical industry views these settlements merely as the cost of doing business. That is why this administration is committed to using every available tool to defeat health care fraud.”

GSK chairman Sir Andrew Witty said in a statement that the problems originated in a “different era” and that the company has now “fundamentally” changed its procedures for compliance, marketing and selling its products, and has removed employees involved in misconduct.

“On behalf of GSK, I want to express our regret and reiterate that we have learnt from the mistakes that were made.”

“We have a vital role to play in bringing innovative medicines to patients and we understand how important it is that our medicines are appropriately promoted to healthcare professionals and that we adhere to the standards rightly expected by the US government.”

Investors appeared to shrug off the record settlement. US-traded GSK shares were up 1.3 percent in midday trade on the New York Stock Exchange.

Agence France-Presse
Agence France-Presse
AFP journalists cover wars, conflicts, politics, science, health, the environment, technology, fashion, entertainment, the offbeat, sports and a whole lot more in text, photographs, video, graphics and online.
 
 
 
 
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