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Glaxo Agrees to Misdemeanor Plea, Will Pay $3B in Record Health Care Fraud Settlement with Feds

Posted Jul 2, 2012 1:10 PM CDT
By Martha Neil

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A British drug manufacturer has agreed to pay $1 billion in criminal fines and $2 billion in civil fines and revamp its compliance procedures to settle wide-ranging allegations by U.S. officials of wrongdoing in the company's marketing and promotion of its products over a period of nearly a decade.

The payment to be made by GlaxoSmithKline Plc represents both the largest health-care fraud settlement ever and the largest payment ever made by a pharmaceutical company, the Wall Street Journal (sub. req.) reports.

Deputy Attorney General James M. Cole, one of the top officials at the U.S. Department of Justice, said the "historic" settlement is "unprecedented in both size and scope," as well as "a clear warning to any company that chooses to break the law," Reuters reports.

In addition to allegations of excessive charges for drugs and illegal kickbacks being made to physicians in violation of Medicaid rules, Glaxo was accused of promoting its Paxil and Wellbutrin antidepressants for off-label use and failing to provide safety information concerning its Avandia diabetes medication to the Food and Drug Administration.

A federal court in Massachusetts must approve the settlement before it is final, USA Today reports.

Glaxo is to plead guilty to twocounts on introducing misbranded drugs (concerning Paxil and Wellbutrin) and one safety data failure-to-report count (concerning Avandia).

The civil penalties were imposed under the False Claims Act.

Related coverage:

ABAJournal.com: "Consulting Outside Counsel Was Key in Ex-Glaxo Lawyer’s Midtrial Acquittal by Judge"

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