Glaxo To Plead Guilty, Will Pay $3 Billion Stemming From Drug Marketing

Glaxo To Plead Guilty, Will Pay $3 Billion Stemming From Drug Marketing

BOSTON - (Mealey's) GlaxoSmithKline LLC (GSK) agreed June 2 to plead guilty and to pay $3 billion to resolve broad-ranging criminal and civil allegations in Massachusetts federal court regarding the promotion of several prescription drugs, failure to report safety data and alleged false-price reporting practices (United States ex rel. Greg Thorpe, et al. v. GlaxoSmithKline PLC, No. 11-10398-RWZ; United States of America v. GlaxoSmithKline LLC, No. 1:12-cr-10206-RWZ, D. Mass.).  

(Qui tam complaint available. Document #28-120712-010C.  Criminal information available. Document #28-120712-011F.  Corporate integrity agreement available. Document #28-120712-012P.  Avandia settlement available. Document #28-120712-013P. Off-label settlement available. Document #28-120712-015P.)

GSK agreed to plead guilty to two counts of introducing misbranded drugs, the antidepressants Paxil and Wellbutrin, into interstate commerce and to one count of failing to report safety data about the diabetes drug Avandia to the U.S. Food and Drug Administration.  GSK will pay $1 billion, including a criminal fine of $956,814,400 and forfeiture of $43,185,600 on the counts.  The company also will pay $2 billion to resolve civil liabilities with the federal government and states under the False Claims Act.  

The U.S. Department of Justice said the resolution is the largest health care fraud settlement to date and the largest payment ever by a drug company.  

Pediatric Use 

A criminal charge alleges that from April 1998 to August 2003, GSK unlawfully promoted Paxil for treating depression in patients under age 18 although the drug was not approved for pediatric use.  The government alleges that GSK participated in publishing and distributing a misleading medical journal article in support of pediatric use. 

A second criminal allegation is that from January 1999 to December 2003, GSK promoted Wellbutrin for off-label uses including weight loss, sexual dysfunction, substance addiction and attention deficit hyperactivity disorder. 

The third criminal allegation is that between 2001 and 2007, GSK failed to include safety data about the potential increased risk of congestive heart failure and heart attack among diabetics using Avandia.  The FDA in 2007 added two black box warnings to the Avandia label about those risks.    

Off-Label Use 

The government also alleges that GSK illegally promoted off-label use of Advair, Lamictal and Zofran and paid kickbacks to physicians to prescribe those drugs as well as Imitrex, Lotronex, Flovent and Valtrex.  GSK reported false best prices, the government says, resulting in the underpayment of rebates under the Medicaid Drug Rebate Program. 

The false best prices allegations are resolved in a separate document called the Nominals Settlement.  

(Nominals Settlement available.  Document #28-120712-014P.)   

The criminal plea agreement also includes nonmonetary compliance commitments and certifications by GSK's U.S. president and board of directors.   The guilty plea and sentence require court approval.    

The false claims complaint was filed under seal in October and unsealed June 2. 

Counsel 

The United States is represented by District of Massachusetts U.S. Attorney Carmen M. Ortiz and Assistant U.S. Attorneys Sara Miron Bloom, Amanda Strachan and Brian Perez-Daple in Boston; District of Colorado U.S. Attorney John Walsh and Assistant U.S. Attorney Edwin Winstead in Denver; Acting Assistant Attorney General Stuart F. Delery and Dante Anderson, Jamie Ann Yavelberg, Andy Mao, Brian McCabe and Douglas Rosenthal of the department's Commercial Litigation Branch, Civil Division; and Jill Furman, Patrick Jasperse and David Frank of the department's Consumer Protection Branch, Civil Division, both in Washington, D.C.; and Gregory E. Demsky, Chief Counsel of Office of Inspector General, U.S. Department of Health and Human Services, in Washington.  

GSK is represented by Senior Vice President for Global Litigation Elpidio Villarreal, and Geoffrey Hobart and Matthew O'Connor of Covington & Burling in Washington. 

Relators Greg Thorpe and Blair Hamrick are represented by Brian Kenney and M. Tavy Deming of Kenney McCafferty in Philadelphia.  Relators Thomas Gerahty and Matthew Burke are represented by Erika Kelton of Phillips & Cohen in Washington.  Relator Lois Graydon is represented by Reuben Guttman of Grant & Eisenhofer in Wilmington, Del.

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