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GlaxoSmithKline To Settle 3 Federal Investigations For $3 Billion

LONDON - (Mealey's) GlaxoSmithKline plc (GSK) has reached an agreement in principal to settle three United States federal criminal and civil investigations for $3 billion, the company said Nov. 3 in a press release on its Web site.


GSK said the agreement in principle will settle "the Company's most significant ongoing Federal government investigations."  Those are:  an investigation into the company's sales and marketing practices started in 2004 and being conducted by the U.S. attorney for Massachusetts, the U.S. Justice Department's investigation into "possible inappropriate use of the nominal price exception" under the Medicaid Rebate Program and the Justice Department's investigation into the development and marketing of the anti-diabetes drug Avandia. 

The company said the settlement is expected to be finalized in 2012.   

GSK said it will pay for the settlement with existing provisions and cash payments in 2012. 

Chief Executive Officer Andrew Witty said in the press release that the matters being settled "do not reflect the company that we are today."  He said GSK has changed its procedures for compliance, marketing and selling in the United States.   

GSK said it established a new compliance framework in 2008, including a larger compliance staff and training.  Other initiatives, the company said, include a new incentive compensation system for sales representatives that eliminates individual sales targets and instead measures quality of service to health care providers. 

[Editor's Note:  Full coverage will be in the Nov. 17 issue of Mealey's Emerging Drugs & Devices.  For all of your legal news needs, please visit] 

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