Pharma giant to pay $3bn in healthcare fraud case

Pharmaceutical giant GlaxoSmithKline has agreed to plead guilty and pay $3bn (€2.38bn) to resolve criminal and civil allegations that it illegally promoted prescription drugs and failed to report safety data, the US said.

The settlement, the largest ever in a healthcare fraud case in the US, includes a criminal fine of $956.8m. London-based Glaxo will also forfeit $43m, the US said.

GSK will plead guilty to marketing the drugs Paxil and Wellbutrin for uses not approved by the US Food and Drug Administration and for failing to report clinical data on Avandia, federal prosecutors said. The company has agreed to admit to the charges, which are misdemeanors, according to filings by the US in federal court in Boston.

British drugmaker Glaxo last year set aside £2.2bn (€2.74bn) to cover the cost of the settlement, which resolves a seven-year investigation of the company’s marketing practices for the three drugs. The reserve brought to $6.4bn the amount the drugmaker has set aside for legal costs tied to Avandia and the other medicines.

Federal prosecutors began an investigation in Colorado in 2004, later taken over by the US attorney in Massachusetts, into whether Glaxo promoted drugs for unapproved uses and into ways Glaxo potentially influenced doctors. The probe concerns nine of the company’s best-selling products from 1997 to 2004.

The company does not admit to any liability or wrongdoing in connection with marketing of Avandia, Advair, and six other drugs, GSK said.

The US claimed GSK failed to provide certain safety data to regulators about Avandia, a diabetes drug, from 2001 to 2007. Since 2007, the FDA has added two black-box warnings to the Avandia label to alert doctors about the potential risk of congestive heart failure and heart attack, the US said.

Glaxo promoted Paxil, which is approved for adult use, for the treatment of depression in patients under 18 through sales calls, spa programmes, and a “false and misleading” medical journal article, according to a US justice department fact sheet.

It promoted Wellbutrin, a depression medication, for unapproved uses including weight loss, sexual dysfunction, and substance abuse. Some sales representatives referred to the drug as “the happy, horny, skinny pill”, according to the fact sheet.

Under federal law, while doctors are allowed to prescribe medications for unapproved uses, drug companies are barred from promoting such sales.

The settlement includes $1.04bn resolving civil allegations of off-label marketing of these and other drugs.