GlaxoSmithKline Fined $3 Billion For Healthcare Fraud
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
British drugmaker GlaxoSmithKline has agreed to pay $3 billion in fines to the U.S. Justice Department for misrepresenting drugs to consumers, reported Reuters on Monday, in what is believed to be the largest case of healthcare fraud in U.S. history.
British drugmaker GlaxoSmithKline has agreed to pay $3 billion in fines to the U.S. Justice Department for misrepresenting drugs to consumers, reported Reuters on Monday, in what is believed to be the largest case of healthcare fraud in U.S. history.
The settlement will top the $2.3 billion in fines paid by Pfizer on similar charges in 2009; and comes after four employees at GSK had tipped off the government about a range of improper practices from the late 1990s to the mid-2000s nearly seven years ago.
On Monday, GSK pleaded guilty to three misdemeanour criminal counts, which included:
– failing to properly report all the necessary safety data to US regulators concerning Avandia, a diabetes drug, from 2001 to 2007,
– targeting the antidepressant Paxil to patients under age 18 when it was approved for adults only;
– and pushing the drug Wellbutrin for uses it was not approved for, including weight loss and treatment of sexual dysfunction.
According to prosecutors, the company had even gone to extreme lengths in order to promote these drugs, such as distributing a misleading medical journal article and providing doctors with meals and spa treatments that amounted to illegal kickbacks.
“I want to express our regret and reiterate that we have learnt from the mistakes that were made,” said GSK’s Chief Executive Officer Andrew Witty in a written statement.
[quote]Witty added that the offences had occurred during a “different era of the company”, who have now “fundamentally changed our procedures for compliance, marketing and selling.” [/quote]James M. Cole, the U.S. deputy attorney general on the other hand lauded the settlement and described it as a “historic” case, “unprecedented in both size and scope.”
Related: New Law to Force Drug Companies to Report How Much They Pay Doctors
Related: Google Pay US$500 Million Settlement Over Online Drug Ads
Related: A Global Health Care Remedy – Why We Must Fix High Drug Prices: Joseph Stiglitz
“It underscores the administration’s firm commitment to protecting the American people and holding accountable those who commit health care fraud.”
[quote]“We are determined to stop practices that jeopardise patients’ health, harm taxpayers and violate public law,” Cole said.[/quote]Last November, Glaxo had warned shareholders that it had put aside more than $2 billion to pay for the settlement. A portion of the fine will also go to the whistleblowers who originally warned of the misdeeds.
