GlaxoSmithKline agrees to pay $3 billion in largest U.S. healthcare fraud settlement

In the largest fraud settlement in U.S. history, GlaxoSmithKline has agreed to pay $3 billion in settlements and to plead guilty to criminal charges related to its branding, safety disclosures and price reporting of several drugs.  The Justice Department on Monday announced a “global settlement” with the U.K.-based company that resolves three investigations related to the pharmaceutical giant and imposes an unusual corporate integrity agreement on Glaxo's worldwide operations. The company will pay $1.8 billion to resolve criminal and civil liabilities for off-label marketing, including $757 million in criminal fines for misbranding antidepressants Paxil and Wellbutrin, and more than $1 billion for alleged False Claims Act violations related to payments of kickbacks for those and other drugs.  The company also agreed to pay a $243 million criminal fine for failing to report safety data to the Food and Drug Administration regarding its diabetes drug Avandia. The company will pay $657 million to resolve allegations about statements it made regarding Avandia's safety and efficacy.  The corporation will plead guilty to two criminal charges of introducing misbranded drugs into commerce, related to Paxil and Wellbutrin, and one count of failing to report safety information for Avandia. In the cases of Paxil and Avandia, the company was forced to add prominent “black box” safety warnings to drug packaging after its conduct became known to authorities.  Finally, the company will pay $300 million for allegedly failing to report its best prices for certain drugs to Medicaid, according to written comments from Stuart Delery, acting assistant attorney general for the Justice Department's Civil Division.  The settlements still require approval from a U.S. District Court judge before becoming final. The civil settlements would resolve four whistle-blower lawsuits pending in U.S. District Court in Massachusetts, the Justice Department said.

COMMENT:  I am so saddened by this entire sorid story.  I am not sure when the partnership between the medical profession and the phamaceutical industry ended, but any doubts that the industry was primarily interested pursuing profits rather than improving patient care have been erased by this affair.  Indianapolis is the home of two major health-care companies: Roche and Lilly.  Their employees are my friends and I have participated in numerous clinical trials for both.  I hope that they have not been contaminated by the rush for profits at whetever costs, but the Lilly affair with zyprexa is not encouraging.  This post does not have a happy ending.  The fact that following the anouncement of the stock price of Glaxo increased by 1.6% is not encouraging.