GlaxoSmithKline has agreed to pay $3 billion to resolve allegations that it illegally promoted drugs for off-label uses, failed to disclose risks associated with one of its drugs to the FDA, and engaged in fraudulent price reporting practices.  This is the largest health care fraud settlement in U.S. history.

Under the criminal plea agreement, GSK will plead guilty to two counts of selling a misbranded drug.  GSK allegedly marketed Paxil, an anti-depressant, for patients under 18, an off-label use which has since been shown to have an increased suicide risk.  GSK also allegedly marketed Wellbutrin, a drug used to treat Major Depressive Disorder, for weight loss, sexual dysfunction, substance addiction, and ADHD.  In order to promote these drugs, GSK allegedly sponsored events for doctors including dinner, lunch, or spa programs, sometimes at lavish resorts.  GSK will also plead guilty to failing to notify the FDA of important safety data regarding Avandia, a diabetes drug which now includes warnings of an increased risk of congestive heart failure and heart attack.

The civil settlement includes the above allegations as well as further off-label marketing allegations for Advair, an asthma drug, Lamictal, an epilepsy drug, and Zofran, a post-operative anti-nausea drug, and kickback allegations for all the aforementioned drugs as well as Imitrex, Lotronex, Flovent, and Valtrex.  The civil settlement also resolves allegations that GSK manipulated the “best price” reported to HHS, fraudulently reducing drug rebates the company was required to pay to Medicaid programs.

The settlement resolves both criminal and civil allegations–$2 billion is allocated toward the civil settlement and $1 billion is allocated toward the criminal settlement.  Under the civil settlement, plea agreement, and five-year HHS-OIG Corporate Integrity Agreement, GSK has agreed to several compliance commitments including paying its sales force on the quality of its service rather than on sales targets, making all executive bonuses retractable if the executive or his or her subordinates engage in significant misconduct, and having its U.S. president and board of directors sign certifications of compliance.

Several of the allegations in the case were brought to the government’s attention by whistleblowers who initiated suits under the False Claims Act.

Read the entire press release, “GlaxoSmithKline to Plead Guilty and Pay $3 Billion to Resolve Fraud Allegations and Failure to Report Safety Data”
Read the entire article, “Glaxo Agrees to Pay $3 Billion in Fraud Settlement”