Monday, July 02, 2012.
After a lengthy investigation and indictment, GlaxoSmithKline(GSK) has reached a plea agreement with the U.S. government and will pay $3 billion to settle one of the most significant health-care fraud cases in history. GlaxoSmithKline was charged with counts in violation of the United States Federal Food, Drug and Cosmetic Act: Distribution of a Misbranded Drug: False and Misleading Labeling, Inadequate Directions for Use, and Failure to Report Data to the Food and Drug Administration (FDA). According to the plea agreement, GSK will be penalized with up to $1 billion in criminal fines, and $2 billion in civil liabilities.
GlaxoSmithKline as a pharmaceutical giant distributes thousands of different prescription medicines but this case dealt most specifically with Paxil, Wellbutrin and Avandia.
Count one of the allegations addressed GlaxoSmithKline’s false and misleading labeling of Paxil. Paxil was approved by the FDA to help treat depression in young adults but was never approved to treat patients under 18 years of age. GlaxoSmithKline conducted three clinical studies which failed to establish the drugs’ efficacy for treating depression. The company did not publish the ineffective results nor did they disclose that the studies suggested a possible increase of suicidality in patients. Also, GlaxoSmithKline approved an article published in a Medical Journal Article stating that Paxil was effective, but with fabricated data to support its claim
Count two alleged GlaxoSmithKline’s inadequate directions for use with the drug Wellbutrin. Wellbutrin was FDA approved only for the treatment of depression in adults and not for the laundry list of uses as advertised. GlaxoSmithKline claimed that Wellbutrin could be used to aid with: weight loss, sexual dysfunction, alcohol or gambling addictions, anxiety, ADHD and bipolar disease. According to the allegations, sales representatives used to refer to it as the “happy, horny, skinny” drug.
Count three addressed GlaxoSmithKline’s failure to report adverse results in clinical studies reports to the FDA. The FDA requires a company to notify the agency when they initiate a study and again with the results. GlaxoSmithKline did not disclose that the study showed negative results for diabetics.
GlaxoSmithKline used its brand name to promote widespread usage through elaborate sales tactics and eventually became one of the ten most profitable pharmaceutical companies in the industry. It held forum events that were aimed at training its sales representatives but these lavish holidays consisted of fishing trips, kayaking, horseback riding etc. GlaxoSmithKline paid for all its sales representatives’ expenses and flew them to Bermuda and Jamaica for meetings. Pursuant to the plea agreement, The United States has set forth strict probation guidelines for the next five years including a $20,000 per day fine for failure to adhere to the guidelines.