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For more information on GlaxoSmithKline and the biggest healthcare fraud settlement in US history

(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.

In its statements (see here and here), GSK said it had made “fundamental changes” to its operations in the US over the last few years.

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.

 


Comments 1

  1. Ken Harvey says:

    News of the GSK $3 bn fine coincided with the release of the 7th Edition of Medicines Australia Code.

    Not surprisingly, this led to a discussion on Australian television (and elsewhere) of whether the promotional activities of the pharmaceutical industry should be governed by self-regulatory industry codes of conduct or by co-regulation involving the government and other stakeholders.

    The latest edition of Medicines Australia (MA) Code contains a number of incremental improvements, for example requiring member companies to report in aggregate amounts:

    . All payments made to healthcare professionals for advisory boards and consultancy arrangements;
    . All sponsorships of healthcare professionals to attend medical conferences and educational events;
    . All payments made to speakers at educational events;
    . All sponsorships of all individual consumer organizations for each financial year, including the value of non-monetary support.

    However, this falls far short of the full disclosure of individual payments made to healthcare professionals which many consumer and health professional groups have argued for both in the 16th Edition (2009) Code revision and again in the 17th Edition (2012) Code revision. Over this time, a number of Australian pharmaceutical companies had also become comfortable with full individual disclosure of payments to healthcare professionals along the lines of the U.S. Physicians Sunshine Act; however this was not incorporated in the latest MA code.

    This illustrates one of the problems of self-regulation, codes often lag behind consumer and health professional views due to the absence of these stakeholders from code revision committees. Codes also lag behind the views of progressive pharmaceutical companies because of the need for revisions to be approved by a majority of member companies.

    In addition, in Australia a plethora of therapeutic industry associations results in a variety of self-regulatory codes with code content, monitoring, complaint procedures and transparency varying greatly (“not a level playing field”).

    Another problem of self-regulation is relatively weak sanctions. MA’s maximum fine of $300,000 (with an average fine of $50,000) stands in stark contrast to the recent GSK fine of $3 billion by the U.S. Justice Department. The U.S. False Claims Act also encourages whistle-blowers to provide crucial “insider” evidence about corporate fraud as they are rewarded with between 15% and 30% of whatever proceeds the government recovers from a successful civil suit. There are no such incentives in Australia.

    A further problem with self-regulatory codes is that they don’t apply to non-members; a major problem in certain areas of the Australian therapeutic goods industry. For example, earlier this year Ranbaxy Australia offered pharmacists A$14,648 of free TrovasR (generic atorvastatin) stock; an offer that would appear to breach the codes of both the Generic Medicines Industry Association (GMiA) and Medicines Australia. However, as Ranbaxy Australia Pty Ltd was not a member of any self-regulatory industry association no complaint could be heard!

    The latest MA Code has now passed to the Australian Competition and Consumer Commission (ACCC) for authorization. This will provide another opportunity for health professional and consumer input. In the past, the ACCC has imposed “conditions” when authorizing MA’s Code which have strengthened its provisions; it is hoped the same may occur with respect to individual disclosure of payments to healthcare professionals.

    Other changes to the 17th Edition of MA’s Code, include:

    . A ban on all brand name reminders for healthcare professionals
    . A ban on competition prizes for healthcare professionals
    . An explicit ban on all personal gifts to doctors such as chocolates and flowers
    . A new explicit requirement for companies to adhere to an International
    Federation of Pharmaceutical Manufacturers and Associations (IFPMA) global position on disclosing clinical trial information and publishing clinical trial results in scientific literature.
    . A requirement that any payments to healthcare professionals in relation to patient support programs is disclosed to patients.

    See:
    http://medicinesaustralia.com.au/2012/07/05/medicines-australia-to-disclose-payments-to-doctors-under-new-code-of-conduct/

    For more debate about the Code, see:
    http://www.abc.net.au/7.30/content/2012/s3539087.htm

    http://theconversation.edu.au/consumer-input-in-medicines-australias-code-of-conduct-review-6370

    http://theconversation.edu.au/code-for-pharmaceutical-industry-falls-short-8092

    To provide comment to the ACCC about Medicines Australian new code go to :

    http://www.accc.gov.au/content/index.phtml/itemId/1063694/fromItemId/278039.

    I understand a request for comment will be posted on the above site early next week.

    Dr Ken Harvey
    Adjunct Associate Professor
    School of Public Health,
    La Trobe University
    http://medreach.com.au
    VOIP (03) 90293697 | Mobile +614 1918 1910 | Fax: +613 9818 1875

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Indigenous education
Lowitja Institute
NT Intervention
social and emotional wellbeing
Uluru Statement
WA community closures
News about Croakey
PIJ Commissions 2021
Public health and population health
#PreventiveHealthStrategy
#UnmetNeedsinPublicHealth
air pollution
alcohol
consumer health matters
COVIDwrap
environmental health
Fetal Alcohol Spectrum Disorders (FASD)
food and nutrition
gambling
Government 2.0
gun control
health communications
health impact assessment
Health in All Policies
health inequalities
health literacy
human rights
illicit drugs
injuries
legal issues
marriage equality
Media Doctor Australia
media-related issues
nanny state
National Preventive Health Agency
obesity
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plain packaging
prevention
public health
public interest journalism
road safety
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Web 2.0
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Social determinants of health
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education
justice
Justice Reinvestment
NBN
Newstart
poverty
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Summer reading 2020-2021
Tasmanian election 2021
Testing Croakey News category 1
The Croakey Archives
#cripcroakey
#HealthEquity16
#HealthMatters
#IHMayDay (all years)
#IHMayDay 2014
#IHMayDay15
#IHMayday16
#IHMayDay17
#IHMayDay18
#LoveRural 2014
Croakey Conference News Service 2013 – 2019
2013 conferences
Australian Centre for Health Services Innovation Forum 2013
Australian Health Promotion Association Conference 2013
Closing the Credibility Gap 2013
CRANAplus Conference 2013
FASD Conference 2013
Health Workforce Australia 2013
International Health Literacy Network Conference 2013
NACCHO Summit 2013
National Rural Health Conference 2013
Oceania EcoHealth Symposium 2013
PHAA conference 2013
2014 conferences
#IPCHIV14
AIDA Conference 2014
Congress Lowitja 2014
CRANAplus conference 2014
Cultural Solutions - Healing Foundation forum 2014
Lowitja Institute Continuous Quality Improvement conference 2014
National Suicide Prevention Conference 2014
Racism and children/youth health symposium 2014
Rural & Remote Health Scientific Symposium 2014
2015 conferences
#CPHCEforum
#CRANAplus15
#HSR15
#NRHC15
#OTCC15
Population Health Congress 2015
2016 conferences
#AHHAsim16
#AHMRC16
#ANROWS2016
#ATSISPEP
#AusCanIndigenousWellness
#cphce2016
#CPHCEforum16
#CRANAplus2016
#IAMRA2016
#LowitjaConf2016
#PreventObesity16
#TowardsRecovery
#VMIAC16
#WearablesCEH
#WICC2016
2017 conferences
#17APCC
#ACEM17
#AIDAconf2017
#BTH20
#CATSINaM17
#ClimateHealthStrategy
#IAHAConf17
#IDS17
#LBQWHC17
#LivingOurWay
#OKtoAskAu
#OTCC2017
#ResearchTranslation17
#TheMHS2017
#VMIACConf17
#WCPH2017
Australian Palliative Care Conference
2018 conferences
#6rrhss
#ACEM18