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article imageGlaxoSmithKline fined $3 billion for pharmaceutical fraud

By Tim Sandle     Jul 5, 2012 in Business
The pharmaceutical company GlaxoSmithKline has been ordered pay $3 billion in fraud charges, the largest sanction of its kind in US history.
Drugs company GlaxoSmithKline (GSK) has been charged in relation to making claims about two if its antidepressants, Paxil and Wellbutrin, for unapproved uses, such as for the treatment of children and adolescents and for sexual dysfunction. In response to the mis-marketing, the US Food and Drug Administration (FDA) posted an official warning to consumers.
The NY Times notes that the US government also accused Glaxo of offering free-deals to medical professionals, ranging from money to trips to Florida, and tickets to basketball games and concerts as incentives to promote and prescribe its drugs.
In a deal struck with US courts, GSK has agreed to pay a fine of $3 billion. The settlement is the largest ever in a healthcare fraud case in the US.
According to ABC, the settlement includes a criminal fine of $956.8 million.The agreement also includes a $300 million civil settlement for failing to provide best prices and underpaying rebates owed under the Medicaid drug program.
GSK Chief Executive Sir Andrew Witty is quoted by the Toronto Star as saying “Today brings to resolution difficult, long-standing matters for GSK. Whilst these originate in a different era for the company, they cannot and will not be ignored. On behalf of GSK, I want to express our regret and reiterate that we have learnt from the mistakes that were made.”
The total $3 billion settlement surpasses the previous record, a $2.3 billion settlement involving another ‘big pharma’ company Pfizer, in 2009, over the marketing of its painkiller Bextra and other drugs.
The GSK fine comes after the company was found to be withholding important safety information about its diabetes drug Avandia in relation to a side-effect of causing heart problems. The drug was later pulled from the European market.
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