GlaxoSmithKline to pay $3 billion in fines, the largest health care fraud settlement in U.S. history
The Justice Department said that British drugmaker will plead guilty to promoting popular antidepressants Paxil and Wellbutrin for unapproved uses. The company also will plead guilty to failing to report to the government for seven years some safety problems with diabetes drug Avandia, which was restricted in the U.S. and banned in Europe after it was found in 2007 to sharply increase the risks of heart attacks and congestive heart failure.
British drugmaker GlaxoSmithKline paid $3 billion in fines — the largest health care fraud settlement in U.S. history — for criminal and civil violations involving 10 drugs that are taken by millions of people.
GlaxoSmithKline PLC pleaded guilty to The Justice Department for promoting popular antidepressants Paxil and Wellbutrin for unapproved uses. The company also pleaded guilty to failing to report to the government for seven years some safety problems with diabetes drug Avandia, which was restricted in the U.S. and banned in Europe after it was found in 2007 to sharply increase the risks of heart attacks and congestive heart failure.
In addition to the fine, Glaxo agreed to resolve civil liability for promoting Paxil, Wellbutrin, asthma drug Advair and two lesser-known drugs for unapproved uses. The company also resolved accusations that it overcharged the government-funded Medicaid program for some drugs, and that it paid doctors to prescribe several drugs including Flovent for asthma and Valtrex for genital herpes.
Sir Andrew Witty, Glaxo’s CEO, expressed regret and said the company has learned “from the mistakes that were made.”
This is the latest in a string of settlements related to drug companies putting profits ahead of patients. While doctors are allowed to prescribe medicines for any use, drug makers cannot promote them in any way that is not approved by the Food and Drug Administration.
In addition to the $3 billion penalty, Glaxo agreed to be monitored by the government for five years to ensure that it complies with marketing and other rules.
The case against Glaxo was originally brought in January 2003 by two whistleblowers, former Glaxo sales representatives Greg Thorpe and Blair Hamrick. In January 2011, the federal government joined in the case.
Prosecutors said Glaxo illegally promoted Paxil for treating depression in children from 1998 to 2003, even though it wasn’t approved for anyone under age 18. The company also promoted Wellbutrin from 1999 through 2003 for weight loss, sexual dysfunction, substance addictions and attention deficit hyperactivity disorder, although it was only approved for treatment of major depression.