Pharmaceutical Company Pleads Guilty to Health Care Fraud, Agrees to Pay Record $3 Billion Penalty

320px-Avandia_2mg_oral_tablet.jpgGlaxoSmithKline (GSK), one of the world’s largest pharmaceutical companies, has entered into a plea agreement with the U.S. Department of Justice (DOJ) over allegations of fraud in marketing certain drugs and of failure to report safety data, according to a DOJ press release. The DOJ had filed a three-count criminal information against GSK for alleged violations of the federal Food, Drug and Cosmetic Act, including alleged promotion of certain drugs for uses not approved by the U.S. Food and Drug Administration (FDA). This is commonly known as “off-label promotion.” As part of its guilty plea, GSK has reportedly agreed to pay a total of $3 billion in penalties and civil settlements, the largest settlement by a pharmaceutical company in history.

According to the DOJ, GSK promoted off-label uses for at least five of its drugs: Advair, Lamictal, Paxil, Wellbutrin, and Zofran. In the case of the antidepressant Paxil, GSK allegedly promoted its use to treat depression in pediatric patients despite a lack of FDA approval for such a use. GSK also allegedly paid kickbacks to doctors for prescribing these five drugs and at least four more: Flovent, Imitrex, Lotroniex, and Valtrex. In regards to the diabetes drug Avandia, the DOJ accused GSK of making false or misleading statements to doctors and the FDA, in part by omitting mention of studies investigating concerns from European officials regarding possible complications certain cardiovascular patients. The DOJ further claimed that GSK reported false “best drug prices,” the lowest price charged to customers. As a result, the company allegedly underpaid rebates that it was required to pay to state Medicaid programs.

The DOJ’s criminal information, filed under seal in the United States District Court for the District of Massachusetts on or about October 26, 2011, alleged three counts against GSK. Two counts were for the introduction of “misbranded drugs,” specifically Paxil and Wellbutrin, into interstate commerce. The third count was for failure to report safety information to the FDA regarding Avandia. The federal government, along with multiple state governments, also had civil claims against GSK for alleged violations of the False Claims Act. The civil claims involved the alleged false claims about Avandia, Paxil, Wellbutrin, and other drugs. These claims also covered the allegedly fraudulent reporting of drug prices.

GSK’s guilty plea in the criminal case includes $1 billion in penalties. The company must pay a fine of $956,814,400, and it must forfeit assets totalling $43,185,600 in value. GSK will also pay $2 billion in settlement to the civil claimants.

The allegations against GSK should concern patients and their legal advocates because of the effect such actions can have on patients’ risk of injury. Doctors who receive inaccurate or fraudulent information about a particular drug cannot make informed decisions about their patients’ care, and this heightens the risk of dangerous drug interactions or pharmacy errors that can cause serious injury to patients.

The Maryland pharmacy error attorneys at Lebowitz & Mzhen can assist you if you have been injured by drugs prescribed, dispensed, or administered incorrectly. Contact us today online or at (800) 654-1949 to see if you may recover damages.

More Blog Posts:

Third Circuit Addresses Issue of Standing in “Off-Label” Pharmaceutical Marketing Litigation, Pharmacy Error Injury Lawyer Blog, July 12, 2012
Drug Shortages Shown to Contribute to Pharmacy Errors, While DEA Prescription Drug Crackdowns Shown to Contribute to Shortages, Pharmacy Error Injury Lawyer Blog, June 21, 2012
CEO of Fitness Website Pleads Guilty to Labeling “Drugs” as “Nutritional Supplements,” Pharmacy Error Injury Lawyer Blog, April 27, 2012
Photo credit: ‘Avandia 2mg oral tablet,’ see page for author [Public domain], via Wikimedia Commons.

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