GlaxoSmithKline pleads guilty in biggest healthcare fraud case in U.S. history

Hannah Blake

pharmaphorum

GlaxoSmithKline, one of the world’s largest healthcare and pharmaceutical companies, has announced it will pay US$ 3 billion in order to settle a U.S. scandal over drug fraud.

Under the terms of the settlement, the drug giant will plead guilty to misdemeanour violations of the FDA for promoting two antidepressant drugs, Paxil and Wellbutrin for unapproved uses, including treatment of children and adolescents, and also for failing to report safety data about diabetes drug, Avandia.

The payments, totalling US$3 billion, are covered through existing provisions and will be funded through existing cash resources.

“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.”

Sir Andrew Witty, CEO of GlaxoSmithKline.

GSK first became aware that its sales and promotional practices were being investigated by the U.S. Department of Justice, in 2004, with investigations starting back in January 1997. These investigations originally related to nine of its products, Advair, Flovent, Imitrex, Lamictal, Lotronex, Paxil, Valtrex, Wellbutrin and Zofran, as well as possible inappropriate use of the nominal price exception under the Medicaid Rebate Program.

GSK states that it does not accept liability or wrongdoing in the selling and marketing of these other drugs, nor in its nominal pricing practices.