GSK Antes Up $3 Billion to Settle Health Care Fraud Case

In a victory for consumers, British pharma giant GlaxoSmithKline (GSK) will pay $3 billion in fines and plead guilty to criminal charges that it unlawfully promoted its antidepressant medicines Paxil and Wellbutrin for off-label uses and failed to report safety data about Avandia, its diabetes drug.

The settlement is the largest in U.S. history for a health-care fraud case involving a drug company and it includes a criminal fine of $956.8 million, said the U.S. Department of Justice (DOJ). The criminal plea agreement also includes certain compliance commitments and certifications by GSK’s U.S. president and board of directors.

The company will also pay $2 billion to resolve its civil liabilities with the federal government under the False Claims Act, as well as the states.  The DOJ said the civil settlement resolves claims relating to Paxil, Wellbutrin, and Avandia, as well as additional drugs, and also resolves pricing fraud allegations. GSK did not admit to any wrong doing in the civil settlement.

In a statement, Deputy Attorney General James M. Cole called the entire settlement “unprecedented” and he added: “At every level, we are determined to stop practices that jeopardize patients’ health, harm taxpayers, and violate the public trust – and this historic action is a clear warning to any company that chooses to break the law.”

According to the Justice Department, GSK unlawfully marketed Paxil to treat depression in patients under 18 despite the fact that the drug was unapproved by the FDA for pediatric use. The DOJ said that as part of this effort, GSK created and distributed a misleading medical journal article that misreported the efficacy of Paxil in the treatment of depression in patients under age 18.

The DOJ also claimed that in 2003, GSK paid millions of dollars to doctors to speak at and attend meetings at which the off-label uses of Wellbutrin were routinely promoted – meetings that sometimes took place at high-end resorts.

With regard to Avandia, the DOJ contended that GSK failed to report safety data between 2001 and 2007 to the Food and Drug Administration (FDA) related to the diabetes drug’s potential to increase a patient’s risk for heart failure and heart attack. Since 2007, the FDA has added two black box warnings to the Avandia label to alert physicians to these risks.

The settlement is pending court approval. The case initially grew out of allegations made under a federal whistle-blower lawsuit by four GSK employees.

GSK CEO Andrew Wittey said in a statement," On behalf of GSK, I want to express our regret and reiterate that we have learnt from the mistakes that were made."

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