GlaxoSmithKline LLC has agreed to pay $3B to settle civil and criminal
allegations that it illegally promoted certain prescription medications,
engaged in false price reporting practices, and failed to report certain
safety information. This is the biggest health care fraud settlement in
our country’s history and the largest payment that a drug company
has ever agreed to pay. Glaxo has also consented to plead guilty to two
misdemeanor counts of introducing misbranded drugs Wellbutrin and Paxil
into interstate commerce and a misdemeanor count of not reporting safety
data about the drug Avandia to the FDA.
Glaxo promoted Paxil to patients under the age 18, when it is an antidepressant that was only FDA-approved for use by adults. It promoted Wellbutrin, also an antidepressant, for uses that the FDA hadn’t approved, including treatment of sexual dysfunction and weight loss. These actions took place starting in the late 1990′s and went on for years.
Regarding its civil liability, Glaxo is resolving the claims for allegedly promoting not just Paxil and Wellbutrin for off-label purposes, but also for doing the same with Lamictal, Advair, and Zofran, compensating doctors with kickbacks in exchange for prescribing these drugs (and also Flovent, Lotronex, Imitrex, and Valtrex), false best prices reporting, underpaying rebates owed, and making misleading and false statements about diabetes drug Avandia’s safety.
Per the plea agreement terms, the pharmaceutical company will pay $1 billion as $43,185,600 in forfeiture and $956,814,400 as a criminal fine (the US District Court still has to approve the latter). It will pay $2 billion for civil liabilities owed to the federal government and the states. ($832 million will go to the US, $210 million to the states). The whistleblowers that filed their lawsuits under the False Claims Act to report Glaxo’s pharmaceutical fraud are entitled to their percentages of these recoveries.
Persons that have knowledge of pharmaceutical fraud can file a whistleblower lawsuit under the False Claims Act. This exposes wrongdoing against the government and can give both the federal and the states an opportunity to recover their losses. These Qui tam claims filed by whistleblowers can make them eligible to receive a percentage of what is recovered.
Some Examples of Pharmaceutical Fraud
Pharmaceutical Kickbacks: Offering doctors kickbacks to get them to prescribe a product to patient. This remuneration may come in the form of “free samples,” payment for “research,” “speaker fees,” “honorariums,” or bogus grants, preceptorships, or investigator meetings.
Off-Label Marketing: Marketing the product for use that the FDA has not approved.
Best Price Fraud: Not accurately reporting its best price for a drug to the Center for Medicare and Medicaid Services (may include hiding kickbacks, discounts, coupons, rebates, grants, and other incentives that buyers are offered.)
GlaxoSmithKline to Plead Guilty and Pay $3 Billion to Resolve Fraud Allegations and Failure to Report Safety Data, US Department of Justice, July 2, 2012
Glaxo Agrees to Pay $3 Billion in Fraud Settlement, The New York Times, July 2, 2012