GlaxoSmithKline is the latest pharmaceutical company to reach a settlement agreement with federal prosecutors over the illegal marketing practices associated with several of its products. The company has agreed to pay the U.S. government $3 billion in order to settle civil and criminal investigations into the sales of a number of their drugs.
One of the more popular products being targeted in government’s investigation is Glaxo’s diabetes drug, Avandia. Formerly a best-selling product for GSK, the use of Avandia was severely limited after studies revealed the drug was linked to serious heart risks. Federal prosecutors alleged that GSK paid doctors and manipulated research in order to promote sales of the drug.
Glaxo’s $3 billion settlement would be the largest in a string of federal cases against pharmaceutical companies. The previous record was made by Pfizer in 2009 after the company paid $2.3 billion in order to settle similar charges with the U.S. government. Drug companies are fast becoming primary targets of fraud investigation by Federal regulators. The billions of dollars recovered as a result of these investigations fund programs like Medicaid and Medicare. The final settlement agreement between GSK and the U.S. government should be complete sometime next year.