GlaxoSmithKline to pay $3bn in US drug fraud scandal

By | July 3, 2012

GlaxoSmithKline GSK is to pay $3bn £1.9bn in the largest healthcare fraud settlement in US history. The drug giant is to plead guilty to promoting two drugs for unapproved uses and failing to report safety data about a diabetes drug to the Food and Drug Administration FDA. The settlement will cover criminal fines as well as civil settlements with the federal and state governments. The case concerns the drugs Paxil, Wellbutrin and Avandia.

Deputy US Attorney General James Cole told a news conference in Washington DC that the settlement was “unprecedented in both size and scope”.

Doctors bribedGSK, one of the world’s largest healthcare and pharmaceuticals companies, admitted to promoting antidepressants Paxil and Wellbutrin for unapproved uses, including treatment of children and adolescents. The illegal practice is known as off-label marketing.

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

In addition, GSK has been found guilty of paying kickbacks to doctors.

“The sales force bribed physicians to prescribe GSK products using every imaginable form of high-priced entertainment, from Hawaiian vacations [and] paying doctors millions of dollars to go on speaking tours, to tickets to Madonna concerts,” said US attorney Carmin Ortiz.

As part of the settlement, GSK agreed to be monitored by government officials for five years. GSK said in a statement it would pay the fines through existing cash resources. Andrew Witty, the firm’s chief executive, said procedures for compliance, marketing and selling had been changed at GSK’s US unit.

“We have learnt from the mistakes that were made,” Mr Witty said. “When necessary, we have removed employees who have engaged in misconduct.”

via BBC News – GlaxoSmithKline to pay $3bn in US drug fraud scandal.

And the CEO goes to jail, right?

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