In one of the biggest fraud settlement payouts in US history, British pharmaceutical company GlaxoSmithKline (GSK) is to pay a record $3 billion as part of a settlement for healthcare fraud after it was discovered that the pharmaceutical company was responsible for bribing doctors and even encouraging the prescription of inappropriate drugs to minors.
The $3 billion settlement amount will go towards covering criminal fines that have been levied upon the company as well as civil settlement payouts. The amount in itself has been described as "unprecedented in both size and scope" by Deputy US Attorney General James Cole and GSK itself stands considerably chastened, with company CEO Andrew Witty contritely commenting, "We have learnt from the mistakes that were made. When necessary, we have removed employees who have engaged in misconduct."
The settlement follows after GSK itself admitted to promoting drugs that had not been approved for certain users and failing to report safety data about one of its diabetes’ drugs to the US Food and Drug Administration (FDA). In addition to this, it was learnt that GSK had also been bribing doctors and physicians to get them to prescribe certain antidepressant drugs to minors and adolescents, whereas it was found that the drugs in question, Paxil and Wellbutrin, were unsuitable to the users, as they had only been approved for adults. This practice, that is bribing doctors to recommend certain drugs, is known as "off-label marketing" and GSK was found to be heavily involved in it.
US attorney Carmin Ortiz details, "The (GSK) sales force bribed physicians to prescribe GSK products using every imaginable form of high-priced entertainment, from Hawaiian vacations [and] paying doctors millions of dollars to go on speaking tours, to tickets to concerts."
Details of numerous doctors given generous payments, lavish hotel treatments and many other such ‘bonuses’ have been given in court documents and besides Paxil and Wellbutrin, GSK also admitted to corporate misconduct regarding the asthma drug, Advair. Regarding the diabetes drug Avandia, the company has admitted that it withheld data from the FDA and also made "unsupported safety claims" about the drug.
According to data group, IMS Health, GSK respectively made sales of $10.4 billion from Avandia, $11.6 billion from Paxil and $5.9 billion from Wellburtin.
As a part of its settlement agreement, GSK has agreed to government monitoring for five years and said that it would make the settlement payments from existing cash resources. CEO Witty further added, "Whilst these [matters] originate in a different era for the company, they cannot and will not be ignored. On behalf of GlaxoSmithKline I want to express our regret and reiterate that we have learnt from the mistakes that were made."