GSK Agrees to Resolve Healthcare Conflicts at the Expense of $3 Billion
Glaxo-SmithKline (GSK), British drug manufacturer, agrees to pay $3 billion as a fine on Monday by the US Justice Department to settle criminal and civil liability for unapproved uses of its best-selling medicines to millions of people.
In this settlement, the company will have to pay $1 billion as a criminal fine and $2 billion to settle civil claims for illegal actions involving kickbacks, mis-branding and other misconducts to market the drugs.
The company failed to give the U.S. Food and Drug Administration (FDA) safety data about Avandia, the diabetes drug. It kept on marketing the antidepressant Paxil to patients under age 18 when the drug has been approved for adults only. Moreover, the company sold the drug, Wellbutrin, for unapproved uses such as weight loss and the treatment of sexual dysfunction.
The misconduct continued from the late 1990s through 2007 in the case of safety data of Avandia.
The agreement to settle the charges "is unprecedented in both size and scope," said James Cole, the No. 2 official at the U.S. Justice Department. He referred the action as "historic" and "a clear warning to any company that chooses to break the law."
Sir Andrew Witty, CEO GSK, 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.”
Legal claims to the company were announced in November 2011. The company has reported in a statement that it would pay the fines through existing cash resources.
This is the biggest healthcare fraud settlement in the history of U.S. as reported by government officials. Previously, Pfizer Inc. paid $2.3 billion in 2009 to resolve the conflicts.