GlaxoSmithKline agrees to record settlement over illegal drug marketing

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December 1, 2011

GlaxoSmithKline agrees to record settlement over illegal drug marketing 

Matthew Malamud

In the largest settlement to date between a drug company and the federal government, GlaxoSmithKline will pay $3 billion to settle civil and criminal claims related to its marketing practices for several drugs and allegedly cheating the Medicaid program.

GlaxoSmithKline has agreed to pay $3 billion to the federal government to settle civil and criminal claims related to its marketing practices for several drugs and allegedly cheating the Medicaid program. It’s the largest settlement between a drug company and the government over illegal marketing practices, besting a $2.3 billion settlement paid by Pfizer in 2009.

The agreement brings to a close a long-running investigation by U.S. attorneys in Colorado and Massachusetts into Glaxo’s sales and marketing of nine top-selling drugs, including the off-label promotion of its antidepressant drug Wellbutrin. U.S. attorneys were also probing Glaxo’s efforts to influence physician prescriptions of its drugs through continuing medical education programs and clinical studies it sponsored as well as paying for travel and entertainment.

The agreement also concludes a Department of Justice (DOJ) investigation of Glaxo’s development and marketing of its diabetes drug Avandia. Last year, the FDA restricted the sale of Avandia as a medication of last resort for patients with diabetes who are unable to control blood sugar levels with other medications. Avandia was taken off the market last year by European countries.

Glaxo has been involved in multidistrict litigation (MDL) over Avandia that, among other things, claims that the drugmaker promoted Avandia as safe and effective when it knew that the drug could cause heart attacks and strokes. (In re Avandia Mktg., Sales Practices, and Prods. Liab. Litig., MDL No. 1871 (E.D. Pa. consolidated Feb. 28, 2008).)

The drug company has settled more than 10,000 cases in the MDL, agreeing to pay more than $700 million, and still faces about 20,000 more claims, according to plaintiff attorneys. Last month, the judge presiding over the MDL set a 75-day deadline to settle at least 85 percent of the remaining cases or she’ll begin setting trial dates.

“I am hopeful that attorneys will want to participate, and that [Glaxo] will enter in good-faith discussions to bring the cases to resolution,” Paul Kiesel of Los Angeles, who represents plaintiffs in the MDL, said in a statement.

“Everything that is happening in a global sense is a good thing for all interested parties, most importantly our clients,” said Samuel Lanham of Bangor, Maine, who also represents plaintiffs in the MDL. “They’re entitled to compensation for injuries they sustained as a result of using the drug.”

The settlement with the federal government also ends a DOJ investigation of allegations that Glaxo misled the government about the lowest prices it charged for certain drugs for purposes of Medicaid reimbursement.


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