GSK to Pay $3B in Biggest Health Care Settlement in U.S. History

According to an announcement by the U.S. Justice Department, "Global health care giant GlaxoSmithKline LLC (GSK) agreed to plead guilty and to pay $3 billion to resolve its criminal and civil liability arising from the company’s unlawful promotion of certain prescription drugs, its failure to report certain safety data, and its civil liability for alleged false price reporting practices, the Justice Department announced today. The resolution is the largest health care fraud settlement in U.S. history and the largest payment ever by a drug company."

"Today’s multi-billion dollar settlement is unprecedented in both size and scope. It underscores this Administration’s firm commitment to protecting the American people and holding accountable those who commit health care fraud," stated U.S. Deputy Attorney General James M. Cole at a press conference today on the settlement. "Health care fraud is an epidemic that touches every aspect of our lives. And yet, for far too long, we have heard that the pharmaceutical industry views these settlements merely as the cost of doing business. That is why this Administration is committed to using every available tool to defeat health care fraud," added his colleague, Acting Assistant Attorney General Stuart Delery.

GSK stated that the charges stem from a "different era" for the company, and its corporate mission now centers on "putting patients first, acting transparently, respecting people inside and outside the organisation and displaying integrity in everything we do."

The DOJ suit pertains to "the company’s unlawful promotion of certain prescription drugs, its failure to report certain safety data, and its civil liability for alleged false price reporting practices" and centers on a trio of GSK drug brands (read the full list of charges on the DOJ website):

• Paxil: In the criminal information, the government alleges that, from April 1998 to August 2003, GSK unlawfully promoted Paxil for treating depression in patients under age 18, even though the FDA has never approved it for pediatric use.  
• Wellbutrin: The United States also alleges that, from January 1999 to December 2003, GSK promoted Wellbutrin, approved at that time only for Major Depressive Disorder, for weight loss, the treatment of sexual dysfunction, substance addictions and Attention Deficit Hyperactivity Disorder, among other off-label uses. 
• Avandia: The United States alleges that, between 2001 and 2007, GSK failed to include certain safety data about Avandia, a diabetes drug, in reports to the FDA that are meant to allow the FDA to determine if a drug continues to be safe for its approved indications and to spot drug safety trends.

In addition to the criminal and civil resolutions, "GSK has executed a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services, Office of Inspector General (HHS-OIG).  The plea agreement and CIA include novel provisions that require that GSK implement and/or maintain major changes to the way it does business, including changing the way its sales force is compensated to remove compensation based on sales goals for territories, one of the driving forces behind much of the conduct at issue in this matter."

GSK CEO Andrew Witty commented in a statement:

“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.

“In the US, we have taken action at all levels in the company. We have fundamentally changed our procedures for compliance, marketing and selling. When necessary, we have removed employees who have engaged in misconduct. In the last two years, we have reformed the basis on which we pay our sales representatives and we have enhanced our ability to ‘claw back’ remuneration of our senior management. 

“We have a vital role to play in bringing innovative medicines to patients and we understand 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.”