GlaxoSmithKline Settles Fraud Case For $3 Billion

by Tanya Irwin, Jul 2, 2012, 5:36 PM

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GlaxoSmithKline has reached an agreement with the U.S. Government and multiple states to end numerous investigations.

The settlement, which still needs court approval, includes $3 billion and fundamental changes to U.S. compliance, marketing and selling procedures implemented in recent years. It is the largest combined criminal-civil fine ever paid by a drug company.

The London-based company, which has a U.S. headquarters of Philadelphia, plead guilty to promoting two popular drugs for unapproved uses and to failing to disclose important safety information on a third, according to the Justice Department.

The corporation also agreed to be monitored by government officials for five years to attempt to ensure the compliance.

The agreement also resolves criminal and civil liabilities related to an investigation begun by the US Attorney's office of Colorado in 2004 and later taken over by the US Attorney's Office of Massachusetts into GSK's sales and marketing practices for nine products.

Prosecutors said GlaxoSmithKline illegally promoted the drug Paxil for treating depression in children from April 1998 to August 2003, even though the FDA never approved it for minors.

The drugmaker also promoted the drug Wellbutrin from January 1999 to December 2003 for weight loss, the treatment of sexual dysfunction, substance addictions and attention deficit hyperactivity disorder, although it was only approved for treatment of major depressive disorder.

The Department of Justice's also investigated of the marketing and regulatory submissions of Avandia.

 

"In the U.S., we have taken action at all levels in the company,” said GlaxoSmithKline CEO Sir Andrew Witty in a release. “We have fundamentally changed our procedures for compliance, marketing and selling. ...We have a vital role to play in bringing innovative medicines to patients and we understand how important it is that our medicines are appropriately promoted to healthcare professionals."

Under the terms of the settlement, GSK will plead guilty to misdemeanor violations of the Federal Food, Drug, and Cosmetic Act related to certain aspects of the marketing of Paxil for paediatric use and of Wellbutrin for certain uses, and for failure to include information about the initiation or status of certain Avandia studies in periodic and annual reports submitted to FDA.

The company is also acused of pushing Imitrex, an adult medicine for migraine, and Lamictal, a drug approved only for partial seizures for other diagnosis, and in the case of Imitrex, for use in children, despite the FDA's rejection of GSK's application for child use due to lack of efficacy. Glaxo also improperly marketed Advair as a first-line asthma treatment.

Physicians are free to prescribe drugs for off-label (unapproved) uses, but pharmaceutical companies are prohibited from marketing the drugs for uses that have not been approved by the FDA.

 

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