In the largest health care fraud settlement in U.S. history, prescription drug giant GlaxoSmithKline is set to plead guilty and pay $3 billion to the U.S. government. The settlement will resolve federal criminal and civil inquiries about things ranging from the company’s illegal promotion of some of its products to its failure to report safety data and alleged false price reporting.
GSK agreed to plead guilty to three criminal counts, including two counts involving the misbranding of drugs Paxil and Wellbutrin and one count of failing to report safety data about the drug Avandia to the Food and Drug Administration.
Prosecutors said GSK marketed Paxil to be used for kids even though it wasn’t approved for those under 18. They say it also promoted Wellbutrin for things other than treating major depressive disorder, which is the only use it is approved for. It was also alleged that GSK failed to report on two studies of heart safety and a diabetes drug, Avandia.
“Today’s multibillion-dollar settlement is unprecedented in both size and scope,” Deputy Attorney General James Cole said. “At every level, we are determined to stop practices that jeopardize patients’ health, harm taxpayers, and violate the public trust – and this historic action is a clear warning to any company that chooses to break the law.”
The plea agreement will have GSK paying $1 billion to resolve the allegations, including a criminal fine of $956,814,400, and an additional $2 billion to settle civil claims under the federal government’s False Claims Act.
The violations of FDA regulations are misdemeanors. GSK has been readying itself while the government probed its marketing practices for the three drugs, and has already set aside $3.5 billion to cover the costs.
In addition to the settlement, GSK has paid more than $700 million to resolve patient lawsuits against it related to Avandia.