Drug maker to pay $3 billion for health fraud case

NEW JERSEY - Associated Press

British drugmaker GlaxoSmithKline will pay $3 billion in fines -the largest healthcare fraud settlement in U.S. history- for criminal and civil violations involving 10 drugs that are taken by millions of people.

The Justice Department said Monday that GlaxoSmithKline PLC will plead guilty to promoting popular antidepressants Paxil and Wellbutrin for unapproved uses. The company also will plead guilty to failing to report to the government for seven years some safety problems with diabetes drug Avandia, which was restricted in the U.S. and banned in Europe after it was found in 2007 to sharply increase the risks of heart attacks and congestive heart failure.

In addition to the fine, Glaxo agreed to resolve civil liability for promoting Paxil, Wellbutrin, asthma drug Advair and two lesser-known drugs for unapproved uses. The company also resolved accusations that it overcharged the government-funded Medicaid program for some drugs, and that it paid kickbacks to doctors to prescribe several drugs including asthma drug Flovent and herpes medicine Valtrex.

‘Lessons learned’
Sir Andrew Witty, Glaxo’s CEO, expressed regret July 2 and said the company has learned “from the mistakes that were made.”

This is the latest in a string of settlements related to drug companies putting profits ahead of patients. In recent years, the government has cracked down on drugmakers’ aggressive tactics, which include marketing medicines for unapproved uses. While doctors are allowed to prescribe medicines for any use, drugmakers cannot promote them in any way not approved by the Food and Drug Administration.

In addition to the $3 billion penalty - which includes a $1 billion criminal fine and forfeiture and $2 billion to resolve civil claims - Glaxo agreed to be monitored by the government for five years to ensure the company complies with marketing and other rules. Glaxo is scheduled to plead guilty to the criminal charges and have the settlement approved at a hearing today in U.S. District Court in Boston.