(Extra details were added on July 4 – see bottom of the post).
Longstanding investigations into GlaxoSmithKline’s sales, marketing and pricing practices in the US have resulted in the largest healthcare fraud settlement ($US 3 billion) in that country’s history.
According to a statement by the Deputy Attorney General James M Cole:
GSK will plead guilty to criminal charges and pay $1 billion in criminal fines and forfeitures for illegally marketing and promoting the drugs Paxil and Wellbutrin for uses not approved by the FDA – including the treatment of children for depression, and the treatment of other patients for ailments ranging from obesity, to anxiety, to addiction and ADHD – and for failing to report important clinical data about the drug Avandia to the Food and Drug Administration.
GSK will pay an additional $2 billion to resolve civil allegations that it caused false claims to be submitted to federal health care programs for these and other drugs as a result of the company’s illegal promotional practices and payments to physicians. This settlement also resolves a civil investigation of the company’s alleged underpayment of rebates that were required under the Medicaid Drug Rebate Program.
The settlement is generating plenty of headlines but for those interested in more detail, the US Department of Justice has released a stack of associated documents that will no doubt provide plenty of fodder for enterprising researchers, journalists and others.
Meanwhile, this story from Forbes describes how GSK paid experts (including a celebrity physician) to deliver messages about its products.
This NYT story provides some of the broader background and context to the settlement, including its origins in claims made by four GSK employees, including a former senior marketing development manager for the company and a regional vice president, who tipped off the government about a range of improper practices from the late 1990s to the mid-2000s.
CEO Sir Andrew Witty (who became CEO in 2008) said:
“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….In the US, we have taken action at all levels in the company. We have fundamentally changed our procedures for compliance, marketing and selling. When necessary, we have removed employees who have engaged in misconduct.”
No doubt we will be hearing plenty more on this story for some time to come.
Update, July 4
Thanks to that excellent, non-profit journalistic outfit, Pro Publica, for providing some of the wider picture – details of some of the other multimillion dollar penalties that other drug companies have faced in the US in recent years.
2009, Eli Lilly was fined $1.42 billion to resolve a government investigation into the off-label promotion of the anti-psychotic Zyprexa.
2009, Pfizer was fined $2.3 billion, then the largest health care fraud settlement and the largest criminal fine ever imposed in the US.
2010, AstraZeneca was fined $520 million to resolve allegations that it illegally promoted the anti-psychotic drug Seroquel.
2011, Merck agreed to pay a fine of $950 million related to the illegal promotion of the painkiller Vioxx, which was withdrawn from the market in 2004 after studies found the drug increased the risk of heart attacks.
2012, Abbott was fined $1.5 billion in connection to the illegal promotion of the anti-psychotic drug Depakote.