British-based GlaxoSmithKline PLC, one of the world's largest drug companies, has agreed to plead guilty to 3 criminal misdemeanor charges of drug fraud and to pay $3 billion as part of an effort to settle a wide range of fraudulent drug marketing cases.
It is the largest settlement of its kind, and it is one of a series of expensive settlements and agreements to resolve the company's many criminal and civil investigations.
The three criminal please relate to the giant drug maker's promotion of two popular drugs for unapproved uses, and the company's failure to report important safety information about a diabetes drug to the Food and Drug Administration (FDA).
The criminal pleas in this massive settlement involve the following GlaxoSmithKline drugs: Paxil, Wellbutrin, and Avandia.
Prosecutors say GlaxoSmithKline encouraged use of Paxil for children although it was not approved for anyone under 18. The company also promoted Wellbutrin for uses besides major depressive disorder, its only approved use. And they say that between 2001 and 2007 it failed to report on two studies of the cardiovascular safety of Avandia, a diabetes drug.
When the company announced the payments in 2011, it said they would cover not only the Avandia case, but also a Justice Department investigation of its Medicaid pricing practices and a nationwide investigation led by the United States attorneys in Colorado and Massachusetts into the sales and marketing of nine of its drugs from 1997 to 2004.
Of the penalties, $1 billion covers criminal fines and forfeitures and $2 billion is for civil settlements with the federal and state governments.
In a separate case in 2010, GlaxoSmithKline agreed to pay $750 million, including a $150 million criminal penalty, to resolve federal complaints about manufacturing quality at a plant in Cidra, P.R., since closed.
Company Information
GlaxoSmithKline plc (GSK) is global healthcare group, which is engaged in the creation and discovery, development, manufacture and marketing of pharmaceutical products, including vaccines, over-the-counter (OTC) medicines and health-related consumer products.
[http://topics.nytimes.com/top/news/business/companies/glaxosmithkline/07/03/2012; The New York Times, Tuesday, July 3, 2012, "Business Day"]
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