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GSK pays $3bn to settle claims of illegal drug sales, promotions and information practices

A leading global drugs company has agreed to pay $3 billion to resolve claims that the sales and marketing practices it employed were illegal.04 Jul 2012

GlaxoSmithKline (GSK) pled guilty to criminal charges that it illegally marketed and promoted drugs "for uses not approved" by US health body the Food and Drug Administration (FDA). It will pay $1bn in criminal fines and forfeits after promoting the drugs Paxil and Wellbutrin as treatments for child depression and patient obesity, anxiety, addiction and ADHD when it was not authorised to do so, US prosecutors said.

The criminal settlement also covered claims that GSK had failed to provide the FDA with "certain safety data" about diabetes drug Avandia. The FDA's role is to assess whether drugs are safe to be used, but GSK had failed to include inform it of the results of "post-marketing studies" and studies conducted following concerns expressed by European regulators over the "cardiovascular safety" of the drug. Subsequently the FDA has said that Avandia can potentially cause heart failure or heart attacks in patients that use the drug, the US Department of Justice (the DoJ) said

The company has also agreed to pay $2bn to settle civil claims, the DoJ said. Amongst the allegations made were claims that the company had made "false and misleading representations" to doctors about the "safety profile" of Avandia, and that those submissions had led consumers to make "false claims" for the product under US health care programs. 

In addition it was claimed that GSK had paid "kickbacks" to physicians as way of inducing them to promote certain drugs to patients and that the pharmaceuticals giant had underpaid on rebates it was supposed to pay after falsely reporting the price of drugs, the DoJ said.

"This landmark settlement demonstrates the Department’s commitment to protecting the American public against illegal conduct and fraud by pharmaceutical companies," Stuart Delery, acting assistant attorney general for the Justice Department’s civil division, said in a statement.

"Doctors need truthful, fair, balanced information when deciding whether the benefits of a drug outweigh its safety risks," he said. "By the same token, the FDA needs all necessary safety-related information to identify safety trends and to determine whether a drug is safe and effective." 

"Unlawful promotion of drugs for unapproved uses and failing to report adverse drug experiences to the FDA can tip the balance of those important decisions, and the Justice Department will not tolerate attempts by those who seek to corrupt our health care system in this way," Delery added.

The DoJ said that the settlement had been reached over activities GSK had allegedly engaged in as far back as the mid-1990s. The company has committed to a five-year 'Corporate Integrity Agreement' which requires it to change its business practices. Under the agreement GSK will have to change how executives are compensated so that senior managers can be stripped of their annual bonuses and other incentives if they, or others, "engage in significant misconduct."

GSK chief executive Sir Andrew Witty expressed "regret" on behalf of the company for what had happened in a "different era" and insisted that it had "learnt from the mistakes that were made." He said the company had already deployed changes to how it operates and would continue to strive for further improvement.

"We are deeply committed to doing everything we can to live up to and exceed the expectations of those we work with and serve," Sir Andrew said. "Since I became CEO, we have had a clear priority to ingrain a culture of putting patients first, acting transparently, respecting people inside and outside the organisation and displaying integrity in everything we do."

"We have a vital role to play in bringing innovative medicines to patients and we understand how important it is that our medicines are appropriately promoted to healthcare professionals and that we adhere to the standards rightly expected by the US Government," he added.