Wednesday 21 August 2013

GlaxoSmithKline in $3bn fraud scandal




Global healthcare and pharmaceuticals company, GlaxoSmithKline (GSK) has pleaded guilty to promoting two drugs for unapproved uses and also failing to report safety data about a diabetes drug to the United States Food and Drug Administration (FDA).
The case concerns the drugs Paxil (paroxetine), an antidepressant; Wellbutrin, a typical antidepressant and smoking cessation aid and Avandia, medication for the treatment of type II diabetes.

GSK will pay the sum of $3bn, which includes a $1bn criminal fine and forfeiture and $2bn to resolve civil settlements with the federal and state governments. This is the largest healthcare fraud settlement in US history.

Deputy Attorney General, James Cole, speaking in Washington, DC said that the settlement was "unprecedented in both size and scope".
"Let me be clear, we will not tolerate health care fraud," Cole said.
Prosecutors said that GSK illegally promoted Paxil for treating depression in children from 1998 to 2003, even though it was not approved for anyone under age 18.
 
The company also promoted Wellbutrin from 1999 through 2003 for weight loss, sexual dysfunction, substance addictions and attention deficit hyperactivity disorder, although it was only approved for treatment of major depression.
The company also conceded charges that it held back data and made unsupported safety claims over its diabetes drug Avandia.
"The sales force bribed physicians to prescribe GSK products using every imaginable form of high-priced entertainment, from Hawaiian vacations to paying doctors millions of dollars to go on speaking tours, and even tickets to Madonna concerts," said US attorney Carmin Ortiz.

As part of the settlement, GSK agreed to be monitored by government officials for five years to ensure that it complies with marketing and other rules. GSK, in a statement, said it would pay the fines through existing cash resources.
Andrew Witty, the chief executive, said procedures for compliance, marketing and selling had been changed at GSK's US unit.
"We have learnt from the mistakes that were made. When necessary, we have removed employees who have engaged in misconduct," Witty said.

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