British Company, GlaxoSmithKline, Pay $3 Billion in Avandia, Paxil and Wellbutrin Settlement

In the largest case of health-care fraud in US history, GlaxoSmithKline (GSK) pleads guilty to misdemeanor criminal charges and will pay out $3 billion in settlement charges.

GSK is pleading guilty to failing to provide the US Food and Drug Administration with safety data about Avandia, the diabetes drug they manufacture.  The data was withheld between 2001 and 2007 and showed the potential increased risk for heart failure and heart attack while taking Avandia.

GlaxoSmithKline unlawfully marketed Paxil for treatment of depression in patients under the age of 18 without having FDA approval for pediatric use.  Paxil and Wellbutrin were also marketed as weight loss treatment and sexual dysfunction treatment, both of which neither drug had been approved for.

The company went to great lengths to promote the drugs, even as far as distributing a misleading medical journal article and providing doctors with illegal kickbacks.

The agreement between GSK and the US Justice Department “is unprecedented in both size and scope,” said James Cole, the No. 2 official at the U.S. Justice Department. He went on to say the outcome is “historic” and “a clear warning to any company that chooses to break the law.”  The settlement includes $1 billion in criminal fines and $2 billion in civil fines.

In addition, GSK has agreed to strict oversight of its sales force by the US government in order to prevent the use of kickbacks or other prohibited practices.