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GlaxoSmithKline Pleads Guilty to Federal Charges

GlaxoSmithKline, a major British pharmaceutical company, is pleading guilty to federal charges that it misbranded and mismarketed two of its drugs in ways that adversely affected customers and the United States. The company is slated to pay $3 billion to the United States in fines and is pleading guilty to three misdemeanor charges related to three of its’ medications: depression drugs Paxil and Wellbutrin and diabetes drug Avandia. It remains to be seen whether consumers who may have suffered from the false marketing plan on pressing charges via class-action or individual lawsuits.

News sources indicate that GlaxoSmithKline, also known as GSK, came under fire from the U.S. Justice Department for allegedly misleading consumers, ignoring U.S. Food and Drug Administration rules, and bribing doctors for over a decade. Investigations into the violations began in 2004 in Colorado and later progressed to a national level.

The company admitted to marketing two of its’ medications, Paxil and Wellbutrin, to demographics and for uses for which they had not been legally approved. GSK marketed Paxil, an antidepressant, to teenagers despite the fact that the FDA had found increased risk of suicide in minors who take antidepressants. GSK also allegedly marketed Wellbutrin, another antidepressant, as a treatment for maladies ranging from sexual dysfunction to ADHD to weight loss. None of these claims had been substantiated by the FDA.

GSK allegedly used misleading tactics to make these claims look viable, including producing and distributing a medical article that purported that Paxil was an effective treatment for teenage depression. From 1998 to 2003, the company also allegedly provided perks such as spa trips and dinners for physicians (including pediatricians) to try to encourage them to prescribe the drug to minors.

Finally, GSK admitted that it withheld information pertaining to the safety of Avandia, one of its’ diabetes medications. Although several medical studies showed that Avandia may cause cardiovascular complications, the company alleged failed to notify the FDA of these findings.

“We have fundamentally changed our procedures for compliance, marketing and selling. When necessary, we have removed employees who have engaged in misconduct,” GSK’s CEO said in a statement after the announcement hit the press. “At every level, we are determined to stop practices that jeopardize patients’ health; harm taxpayers; and violate the public trust — and this historic action is a clear warning to any company that chooses to break the law.” The $3 billion settlement is the largest U.S. healthcare fraud settlement to date, with $1 billion in fines and forfeitures and $2 billion to settle federal and state health care claims.

The latter $2 billion is being paid in response to allegations that GSK failed to report its ‘best prices’ to Medicaid, thus overcharging the program for use of its’ medications. Some of the funds will also reportedly be awarded to persons eligible to receive rewards through the False Claims Act, which allows persons who help prosecute medical fraud to receive compensation for their efforts. It is not clear how many of these persons were involved in the case, nor is it clear how much they are entitled to.