Glaxo Agrees to Pay $3 Billion in Fraud Settlement
By KATIE THOMAS and MICHAEL S. SCHMIDT
Published: July 2, 2012
The British drugmaker GlaxoSmithKline agreed to plead guilty to criminal charges and pay $3 billion in fines for illegally promoting the antidepressants Paxil and Wellbutrin and for failing to report safety data about the diabetes drug Avandia, federal prosecutors announced Monday.
The settlement marks the largest payment ever by a drug company, eclipsing the previous record of $2.3 billion set by Pfizer in 2009, the government said.
“Today’s multibillion-dollar settlement is unprecedented in both size and scope,” said James M. Cole, the deputy attorney general. “It underscores the administration’s firm commitment to protecting the American people and holding accountable those who commit health care fraud.”
The initial terms of the settlement were announced in November, and GlaxoSmithKline had already set aside cash for the settlement. In a statement Monday, the company said it has since changed its compliance and marketing procedures
Andrew Witty, the chief executive, sought to portray the illegal actions as part of the company’s past.
“Whilst these originate in a different era for the company, they cannot and will not be ignored,” he said in the statement. “On behalf of GSK, I want to express our regret and reiterate that we have learnt from the mistakes that were made.”
Two of the three misdemeanor criminal charges relate to the company’s promotion of Paxil and Wellbutrin.
Prosecutors said the company paid doctors to attend conferences and other meetings to promote uses for the drugs that were not approved by the Food and Drug Administration. The company illegally promoted the use of Paxil in children and, in the case of Wellbutrin, marketed it for weight loss and sexual dysfunction when it was approved only to treat major depressive disorder.
The third criminal charge involves Avandia, a diabetes drug whose use was severely restricted in 2010 after it was linked to heart risks. Prosecutors said the company failed to report those risks to the F.D.A.