GlaxoSmithKline to pay $3 billion in fraud settlement
10:53 • 03.07.12

The British drugmaker GlaxoSmithKline has agreed to plead guilty to criminal charges and pay $3 billion in fines for promoting its best-selling antidepressants for unapproved uses and failing to report safety data about a top diabetes drug, NY Times reported, citing federal prosecutors.
The agreement also includes civil penalties for improper marketing of a half-dozen other drugs.
The fine against GlaxoSmithKline over Paxil, Wellbutrin, Avandia and the other drugs makes this year a record for money recovered by the federal government under its so-called whistle-blower law, according to a group that tracks such numbers.
In May, Abbott Laboratories settled for $1.6 billion over its marketing of the antipsychotic drug Depakote. And an agreement with Johnson & Johnson that could result in a fine of as much as $2 billion is said to be imminent over its off-label promotion of another antipsychotic drug, Risperdal.
No individuals have been charged in any of the cases. Even so, the Justice Department contends the prosecutions are well worth the effort — reaping more than $15 in recoveries for every $1 it spends, by one estimate.
But critics argue that even large fines are not enough to deter drug companies from unlawful behavior. Only when prosecutors single out individual executives for punishment, they say, will practices begin to change.
“What we’re learning is that money doesn’t deter corporate malfeasance,” said Eliot Spitzer, who, as New York’s attorney general, sued GlaxoSmithKline in 2004 over similar accusations involving Paxil. “The only thing that will work in my view is CEO’s and officials being forced to resign and individual culpability being enforced.”
The federal whistle-blower law, officially the False Claims Act, dates to 1863 and was originally envisioned as a check on war profiteering after the Civil War.
Whistle-blowers get a share of any money recovered by the federal government. So far, according to Patrick Burns, spokesman for the whistle-blower advocacy group Taxpayers Against Fraud, at least $10 billion has been agreed to in settlements this fiscal year, which ends in September.
The settlement, which requires court approval, stems from claims made by four employees of GlaxoSmithKline, including a former senior marketing development manager for the company and a regional vice president, who tipped off the government about a range of improper practices from the late 1990s to the mid-2000s.
Prosecutors said the company had tried to win over doctors by paying for trips to Jamaica and Bermuda, as well as spa treatments and hunting excursions. In the case of Paxil, prosecutors claim GlaxoSmithKline employed several tactics aimed at promoting the use of the drug in children, including helping to publish a medical journal article that misreported data from a clinical trial.
A warning was later added to the drug that Paxil, like other antidepressants, might increase the risk of suicidal thoughts in teenagers. Prosecutors said the company had marketed Wellbutrin for conditions like weight loss and sexual dysfunction when it was approved only to treat major depressive disorder.
They said that in the case of Avandia, whose use was severely restricted in 2010 after it was linked to heart risks, the company had failed to report data from studies detailing the safety risks to the FDA.
“Today’s multibillion-dollar settlement is unprecedented in both size and scope,” said James M. Cole, the deputy attorney general. “It underscores the administration’s firm commitment to protecting the American people and holding accountable those who commit health care fraud.”
The initial terms of the settlement were announced in November, and Glaxo had already set aside cash for the settlement. In a statement Monday, the company said it has since changed many of its policies, including no longer rewarding sales representatives for the number of drug prescriptions sold.
Andrew Witty, the chief executive, sought to portray the illegal actions as part of the company’s past.
“Whilst these originate in a different era for the company, they cannot and will not be ignored,” he said in the statement. “On behalf of GSK, I want to express our regret and reiterate that we have learned from the mistakes that were made.”
The three criminal charges involved Paxil, Wellbutrin and Avandia and included a criminal fine of $1 billion. The remaining $2 billion involves fines in connection with a civil settlement over the sales and marketing practices of the blockbuster asthma drug Advair and several other drugs.
Part of the civil settlement also includes claims that the company overcharged the government for drugs. Glaxo did not admit any wrongdoing in the civil settlement.
Despite the large amount, $3 billion represents only a portion of what Glaxo made on the drugs. Avandia, for example, racked up $10.4 billion in sales, Paxil brought in $11.6 billion, and Wellbutrin sales were $5.9 billion during the years covered by the settlement, according to IMS Health, a data group that consults for drugmakers.
“So a $3 billion settlement for half a dozen drugs over 10 years can be rationalized as the cost of doing business,” Mr. Burns said.
LATEST NEWS • All Today news
20:19 • 25/05
Philippines troops clash with Abu Sayyaf - 12 dead
19:33 • 25/05
Hail damages gardens in Lori province
19:13 • 25/05
Woolwich murder sparks anti-Muslim backlash
18:10 • 25/05
Ukraine stages first gay pride march
17:55 • 25/05
Turkmen capital hits Guinness Book of Records
17:23 • 25/05
Armenia’s FM receives outgoing Swiss ambassador
17:14 • 25/05
Chinese vase kept in a battered cardboard box sells for £120,000
17:08 • 25/05
Russian ambassador hands over credentials
16:51 • 25/05
16:23 • 25/05
Lavrov-Mammadyarov meeting ‘does not promt anything’ – military expert
16:00 • 25/05
Syria conflict: Qusair in heavy bombardment by army
15:52 • 25/05
Lawyers to declare strike against Court of Cassation
14:40 • 25/05
'Mafia martyr' Don Giuseppe Puglisi beatified in Sicily
14:25 • 25/05
'Black widow' bomber attacks Russia police
14:12 • 25/05
“Let’s prevent gas tariff rise” to demonstrate civil disobedience
13:24 • 25/05
Nagorno Karabakh president attends opening of archaeological exhibition
13:20 • 25/05
Army’s issues should be solved without interferences – Armed Forces spiritual leader
12:47 • 25/05
Job fair conducted for graduates of Armenia’s State University of Economics
12:33 • 25/05
China seals first free-trade deal with Switzerland
12:09 • 25/05
No Iranian armed forces, military advisors in Syria: Iran UN envoy
11:58 • 25/05
News Corp to split in two on 28 June
11:55 • 25/05
Dorians to give open air concert in Yerevan
11:43 • 25/05
Why developing more brain cells can means we forget the early days of our childhood
11:28 • 25/05
Nagorno Karabakh President receives Hayastan” All-Armenian Fund’s Board of Trustees members
11:25 • 25/05
Wayne Rooney: Man Utd confident forward will stay - David Gill
11:01 • 25/05
58% of public opinion poll respondents say they will leave Armenia in case of gas prices rise
10:46 • 25/05
Zhoghovurd: Armavia fails to pay salaries to pilots, engineers and air stewards for seven months
10:35 • 25/05
Hraparak: Gagik Tsarukyan, Robert Kocharyan discussed PAP status?
10:27 • 25/05
Sweden riots spread beyond Stockholm despite extra police
10:21 • 25/05
France to begin first stage of Mali military withdrawal
10:12 • 25/05
Syria conflict: Opposition willing to attend talks
10:06 • 25/05
Pakistan school bus gas blast kills 17 children
21:10 • 24/05
21:09 • 24/05
Opposition Armenian MP wishes school-leavers freedom and happiness
Most popular articles
21:10 • 24/05
21:09 • 24/05
Opposition Armenian MP wishes school-leavers freedom and happiness
17:55 • 25/05
Turkmen capital hits Guinness Book of Records
13:20 • 25/05
Army’s issues should be solved without interferences – Armed Forces spiritual leader
10:27 • 25/05
Sweden riots spread beyond Stockholm despite extra police
11:01 • 25/05
58% of public opinion poll respondents say they will leave Armenia in case of gas prices rise
10:06 • 25/05
Pakistan school bus gas blast kills 17 children
12:09 • 25/05
No Iranian armed forces, military advisors in Syria: Iran UN envoy
14:12 • 25/05
“Let’s prevent gas tariff rise” to demonstrate civil disobedience
12:47 • 25/05
Job fair conducted for graduates of Armenia’s State University of Economics
- Armenia’s FM receives outgoing Swiss ambassador
- Lavrov-Mammadyarov meeting ‘does not promt anything’ – military expert
- Lawyers to declare strike against Court of Cassation
- “Let’s prevent gas tariff rise” to demonstrate civil disobedience
- Army’s issues should be solved without interferences – Armed Forces spiritual leader



















