GlaxoSmithKline Settles Criminal Health Fraud Case for Record $3 Billion
British pharmaceutical giant GlaxoSmithKline will pay a $3 billion fine for criminal health care fraud, the largest settlement ever paid by a drug maker.
The New York Times reports that the company pleaded guilty on Monday to federal charges of promoting its most popular anti-depressants– Paxil and Wellbutrin– for unapproved uses and failing to report safety data about Avandia, a best-selling diabetes drug.
Also included in the settlement are civil penalties for improperly marketing six other medications.
The settlement was the result of claims made by four GlaxoSmithKline employees under the False Claims Act, the federal whistleblower law, alleging a host of illegal practices in the 1990s and 2000s.
Those employees, who included a former senior marketing development manager and a regional vice president, accused the company of wooing doctors with Caribbean vacations, spa treatments and hunting trips.
GlaxoSmithKline also promoted Paxil for pediatric use without the approval of the Food and Drug Administration (FDA) and helped publish a medical journal article misrepresenting clinical trial data.
Later, a warning was added to Paxil labels that the drug could increase the risk of suicidal thoughts in teenage users.
Additionally, the company marketed Wellbutrin, which was only approved for the treatment of severe depression, for other conditions like weight loss and sexual dysfunction.
In the case of Avandia, which has been linked to an elevated risk of heart problems, GlaxoSmithKlein failed to properly report study data detailing safety risks to the FDA.
“Today’s multibillion-dollar settlement is unprecedented in both size and scope,” deputy attorney general James M. Cole declared on Monday. “It underscores the administration’s firm commitment to protecting the American people and holding accountable those who commit health care fraud.”
GlaxoSmithKline CEO Andrew Witty said the company’s mistakes were from “a different era.”
“Whilst these originate in a different era for the company, they cannot and will not be ignored,” he said in a statement. “On behalf of GSK, I want to express our regret and reiterate that we have learned from the mistakes that were made.”
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