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GlaxoSmithKline to Pay $3 Billion in Largest Health Care Fraud Settlement

Company was fined over misbranding its drugs Paxil and Wellbutrin, and for holding back data while making unbacked claims for its diabetes drug Avandia.

Over charges it marketed drugs for unauthorized uses, held back safety data, and cheated the government's Medicaid program, GlaxoSmithKline (IW 1000/88) was socked with $3 billion in fines by U.S. authorities on July 2.

The Justice Department said GSK was fined over misbranding its drugs Paxil and Wellbutrin, and for holding back data while making unbacked claims for its diabetes drug Avandia.

GSK pleaded guilty and agreed to the fines in what the department called the largest health care fraud settlement in U.S. history.

GSK, one of the world's largest health care and pharmaceuticals companies, admitted to charges that it had promoted antidepressants Paxil and Wellbutrin for uses not approved for by U.S. regulators, including treatment of children and adolescents.

The British drugmaker also conceded charges that it held back data and made unsupported safety claims over its diabetes drug Avandia.

Altogether it will pay $1 billion in criminal fines and forfeitures over charges relating to the three drugs.

In addition, the company will pay $1.7 billion in civil fines for illegal promotion of those drugs as well as others; paying kickbacks in their marketing; and making unsubstantiated claims about Avandia's safety and efficacy.

And separately, GSK is being fined $300 million to settle charges it underpaid rebates it owed to the U.S .Medicaid program.

Meaning of Settlement


"Today's resolution is significant not just because GSK's conduct was egregious or because it is the largest health care fraud settlement in the Department's history," said acting assistant attorney general Stuart Delery. "For far too long, we have heard that the pharmaceutical industry views these settlements merely as the cost of doing business. That is why this administration is committed to using every available tool to defeat health care fraud."

GSK chairman Sir Andrew Witty said in a statement that the problems originated in a "different era" and that the company has now "fundamentally" changed its procedures for compliance, marketing and selling its products, and has removed employees involved in misconduct.

"On behalf of GSK, I want to express our regret and reiterate that we have learnt from the mistakes that were made."

"We have a vital role to play in bringing innovative medicines to patients and we understand how important it is that our medicines are appropriately promoted to healthcare professionals and that we adhere to the standards rightly expected by the U.S .government."

Copyright Agence France-Presse, 2012

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