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GSK Agrees to $3-Billion Settlement with Justice Department

by JMC on July 10, 2012

July 3, 2012
By Amy Ritter

GlaxoSmithKline has agreed to plead guilty and pay $3 billion to resolve criminal and civil liability resulting from unlawful promotion of certain drugs, failure to report safety data, and alleged false price reporting practices. According to the Justice Department press release, the settlement is the largest healthcare fraud settlement in US history, and the largest payment ever by a drug company.

GSK agreed to plead guilty to three criminal counts, including two counts of introducing misbranded drugs, Paxil and Wellbutrin, into interstate commerce and one count of failing to report safety data about the drug Avandia to FDA. Under the terms of the plea agreement, GSK will pay a total of $1 billion, including a criminal fine of $956,814,400 and forfeiture in the amount of $43,185,600. The guilty plea and sentence are subject to final acceptance by the US District Court.

In addition, GSK agreed to pay $2 billion to resolve its civil liabilities with the federal government under the False Claims Act, as well as the states.  The civil settlement resolves claims relating to Paxil, Wellbutrin, and Avandia, as well as additional drugs, and also resolves pricing fraud allegations.

GSK’s criminal liability stems from off-label promotion of two drugs.  According to the Justice Department, from April 1998 to August 2003 GSK unlawfully promoted the antidepressant Paxil for treating depression in patients under age 18, even though the FDA has never approved the drug for pediatric use.  The Justice Department also alleges that, from January 1999 to December 2003, GSK promoted Wellbutrin, a drug approved at that time only for major depressive disorder, for weight loss, the treatment of sexual dysfunction, substance addictions, and attention deficit hyperactivity disorder, among other off-label uses.

GSK also pled guilty to criminal charges of withholding safety data for the diabetes medication, Avandia, from 2001–2007. The missing information included data regarding certain postmarketing studies, as well as data regarding two studies undertaken in response to European regulators’ concerns about the cardiovascular safety of Avandia. FDA has since added two black-box warnings for Avandia for cardiovascular safety.

The civil liabilities that GSK has agreed to resolve in this settlement include off-label promotion of the drugs Paxil, Wellbutrin, Advair, Lamictal, and Zofran, and paying kickbacks to physicians to prescribe those drugs as well as the drugs Imitrex, Lotronex, Flovent, and Valtrex; making false and misleading statements concerning the safety of Avandia; and reporting false best prices and underpaying rebates owed under the Medicaid Drug Rebate Program.  According to the Justice Department, except to the extent that GSK has agreed to plead guilty to the three-count criminal information, the claims settled by these agreements are allegations only, and there has been no determination of liability.,403

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