Drugs firm GlaxoSmithKline will pay $3bn (€2.4bn) in fines after admitting to the largest healthcare fraud in US history.
The UK’s largest pharmaceutical company was accused of bribing doctors in America to prescribe medicines for unapproved uses, with potentially dangerous side effects.
Glaxo, which is based in west London and has household names such as Lucozade and Ribena under its brand, is due to plead guilty to criminal and civil offences involving 10 drugs taken by millions of people.
It promoted the popular anti-depressants Paxil and Wellbutrin for unapproved uses.
Prosecutors said that between 1998 and 2003 Glaxo illegally promoted Paxil for treating depression in children, even though it was not approved for under 18s.
The company also promoted Wellbutrin from 1999 to 2003 for weight loss, sexual dysfunction, substance addictions and attention deficit hyperactivity disorder, although it was approved only for treatment of major depression.
And Glaxo will admit failing to report to the government for seven years on safety problems with the diabetes drug Avandia, which was restricted in the US and banned in Europe after it was found in 2007 to sharply increase the risks of heart attacks and congestive heart failure.
Glaxo has also agreed to resolve civil liability for promoting asthma drug Advair and two lesser-known drugs for unapproved uses.
The company also resolved accusations that it overcharged the government-funded Medicaid programme for some drugs and that it bribed doctors to prescribe several medicines including asthma drug Flovent and herpes medicine Valtrex.
Sir Andrew Witty, Glaxo’s chief executive, expressed regret yesterday and said the company had learned “from the mistakes that were made”.
He 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. 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.”
Sir Andrew said the company had “fundamentally changed” its procedures for compliance, marketing and selling, and that Glaxo understood “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”.
In addition to the three billion-dollar penalty – which includes a $1bn criminal fine and forfeiture and $2bn to resolve civil claims – Glaxo agreed to be monitored by the government for five years to ensure the company complies with marketing and other rules.
While doctors are allowed to prescribe medicines for any use, pharmaceutical firms cannot promote them in any way not approved by the Food and Drug Administration.
“Let me be clear, we will not tolerate health care fraud,” US deputy attorney general James Cole said at the Justice Department in Washington yesterday.
Stuart Delery, acting assistant attorney general and head of the Justice Department’s civil division, added: “For far too long we have heard that the pharmaceutical industry views these settlements merely as the cost of doing business.
“Today’s resolution seeks not only to punish wrongdoing and recover taxpayer dollars, but to ensure GSK’s future compliance with the law.”
Glaxo is due to plead guilty to the criminal charges and have the settlement approved at a hearing on Thursday in Boston, Massachusetts.