British Pharmaceutical giant GlaxoSmithKline has agreed to pay a settlement of $3 billion and plead guilty to three misdemeanor criminal charges. U.S. government officials are calling the agreement the largest healthcare fraud case in history.
The court will still have to approve the agreement, but its approval would resolve the allegations that the drug maker broke laws in the U.S. in its development and marketing of different pharmaceuticals. Paxil, GSK’s antidepressant was targeted to patients who were less than 18, when the FDA approved it for only adults. GSK also pushed Wellbutrin, for unapproved uses including for sexual dysfunction treatment and weight loss, alleges an investigation the U.S. Department of Justice led.
The company did a number of things to promote the two drugs, including distributing a medical journal that was misleading and lavishing meals and spa appointments on doctors that amounted to nothing more than kickbacks, said prosecutors.
In addition, GSK did not give safety data to the FDA about Avandia, its drug to help those with diabetes. That, prosecutors said, was in violation of the laws in the U.S.
Misdeeds by GSK last from 1999 to 2007 and GSK has agreed to make guilty pleas for three different misdemeanor charges, one for each one of the three drugs involved.
The GSK agreement with the DOJ is unprecedented for both scope and size said the Justice’s No. 2 official, James Cole. He said the action was historic and a decisive warning to companies that choose to break U.S. law. The $3 billion in cash will cover $2 billion for civil fines and $1 billion for criminal fines.