GlaxoSmithKline settles health care fraud case for $3 billion

[JURIST] The US Department of Justice (DOJ) [official website] and British pharmaceutical giant GlaxoSmithKline (GSK) [corporate website] on Monday announced [DOJ press release; GSK press release] that they had reached a $3 billion settlement in a series of criminal and civil healthcare fraud cases against the drug company. As part of the agreement, GSK pleaded guilty to three misdemeanor charges for promoting drugs for purposes not approved by the Food and Drug Administration (FDA) [official website], including promoting the anti-depressant Wellbutrin for weight loss, sexual dysfunction and use by children under age 18. The $3 billion settlement, which includes $1 billion in criminal fines and $2 billion in civil settlements, is the largest health care fraud settlement in US history. In a statement, GSK CEO Sir Andrew Witty said:

Today brings to resolution difficult, long-standing matters for GSK. Whilst these originate in a different era for the company, they cannot and will not be ignored. On behalf of GSK, I want to express our regret and reiterate that we have learnt from the mistakes that were made. We are deeply committed to doing everything we can to live up to and exceed the expectations of those we work with and serve...In the US, we have taken action at all levels in the company. We have fundamentally changed our procedures for compliance, marketing and selling. When necessary, we have removed employees who have engaged in misconduct.
The DOJ said that the settlement also involves an agreement by GSK to strict government oversight of operations.

GSK has faced charges of misconduct from the US government in the past. In 2010, GSK and its subsidiary SB Pharmco Puerto Rico Inc., agreed to plead guilty [JURIST report] to civil and criminal charges relating to the manufacture and distribution of adulterated drugs in the US, paying a total of $750 million as part of the settlement. The charges stemmed from a false-claim lawsuit filed in 2004 in the US District Court for the District of Massachusetts [official website] by Cheryl Eckard, the company's former quality assurance manager, after her visit to its now-closed manufacturing facility in Cidra, Puerto Rico. In her complaint [text, PDF], Eckard alleged that the false claims made by GSK "arose out of chronic, serious deficiencies in the quality assurance function at the Cidra plant and the defendant's ongoing serious violations of the laws and regulations designed to ensure the fitness of drug products for use." As a result of pleading guilty to the civil charges, GSK paid $600 million to the states and the federal government and an additional criminal fine of $150 million. At the time, the settlement was the fourth largest in US history.

 

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