GlaxoSmithKline Returns $3 Billion to Government in Largest Health Care Fraud Settlement in U.S. History

It has been announced today that a record $3 billion settlement has been reached between GlaxoSmithKline (GSK), a London-based pharmaceutical company, and the United States government regarding the resolution of several investigations into GSK’s unlawful marketing and pricing tactics.  GSK has agreed to pay $3 billion to resolve 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.

GSK has agreed to pay a $956.8 million criminal fine and plead guilty to a three-count criminal information, including two counts of introducing misbranded drugs, Paxil and Wellbutrin, into interstate commerce and one count of failing to report safety data about the drug Avandia to the Food and Drug Administration (FDA).

In addition, GSK has agreed to pay $2 billion to quiet allegations raised in False Claims Act qui tam actions, detailing GSK’s off-label promotions of various products, as well as pricing fraud allegations. Specifically, the whistleblowers revealed that GSK was (1) promoting the drugs Paxil, Wellbutrin, Advair, Lamictal and Zofran for off-label, non-covered uses and paying kickbacks to physicians to prescribe those drugs as well as the drugs Imitrex, Lotronex, Flovent and Valtrex; (2) making false and misleading statements concerning the safety of Avandia; and (3) reporting false best prices and underpaying rebates owed under the Medicaid Drug Rebate Program.

Back on November 3, 2011, GSK announced that a settlement in principle had been reached with the Government.  The initial investigation began by the United States Attorney’s Office in the District of Colorado and was later spearheaded by the United States Attorney’s Office in the District of Massachusetts.

The relators alleged that from the late 1990s until the filing of the complaint, GSK was falsely and fraudulently engaged in illegal and fraudulent marketing practices resulting in GSK profiting to the tune of billions of dollars.  The submissions of false claims were the result of off-label uses (label uses not indicated and approved by the FDA) and illegal kickbacks that included illegal remuneration to physicians.  These unlawful payments included payments for unrestricted grants,  participation in speaker’s bureaus, advisory boards, preceptorships and lavish dinners and entertainment events; all to induce physicians and other health care providers to prescribe GSK medications in violation of the federal and state anti-kickback laws.

Nolan & Auerbach believes that this record payment signifies that pharmaceutical fraud continues to drain funds from Medicare and Medicaid at an alarming rate.  Otherwise unchecked, the Government relies on courageous whistleblowers to come forward and report wrongdoing.  The monies otherwise lost would have been staggering in this case.

More information for whistleblowers is located at the Nolan & Auerbach, P.A. website.