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Drug maker agrees to largest-ever fraud settlement
GlaxoSmithKline LLC, a global health care company, agreed to plead guilty and pay $3 billion, the largest health care fraud settlement in U.S. history, after illegally marketing certain prescription drugs, Department of Justice officials announced Monday.
GSK agreed to pay $3 billion to resolve criminal and civil charges for promoting the drugs Paxil and Wellbutrin for uses not approved by the Food and Drug Administration — such as treating children for depression and treating adult patients for obesity, anxiety, addiction and Attention Deficit Hyperactivity Disorder.
The company also failed to report clinical data about the drug Avandia to the FDA.
It will pay $1 billion in criminal fines and forfeitures and another $2 billion to resolve allegations that it caused false claims to be submitted to federal health care programs — marking the largest health care fraud settlement in history, said deputy attorney general James Cole.
“Today’s multi-billion dollar settlement is unprecedented in both size and scope,” Mr. Cole said. “It underscores this administration’s firm commitment to protecting the American people and holding accountable those who commit health care fraud.”
The DOJ has recovered more than $10.2 billion in settlements, judgements, fines, restitution and forfeiture in health care fraud cases in the three years since President Obama's administration created a new health care fraud prevention team and a Medicare strike force.
Earlier this year, officials said they had uncovered the largest Medicare fraud scheme in history, arresting a ring of Dallas-area health care professionals on suspicion of collecting $375 billion for phony medical claims.
GSK agreed to 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).
Under the terms of the plea agreement, GSK will pay a total of $1 billion, including a criminal fine of $956,814,400 and forfeiture in the amount of $43,185,600. The criminal plea agreement also includes certain non-monetary compliance commitments and certifications by GSK’s U.S. president and board of directors.
GSK’s guilty plea and sentence is not final until accepted by the U.S. District Court.
GSK will also pay $2 billion to resolve its civil liabilities with the federal government under the False Claims Act, as well as the states.The civil settlement resolves claims relating to Paxil, Wellbutrin and Avandia, as well as additional drugs, and also resolves pricing fraud allegations.
“For a long time, our health care system had been a target for cheaters who thought they could make an easy profit at the expense of public safety, taxpayers, and the millions of Americans who depend on programs like Medicare and Medicaid,” said Bill Corr, deputy secretary of the Department of Health and Human Services.
“But thanks to strong enforcement actions like those we have announced today, that equation is rapidly changing,” he said.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
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