GlaxoSmithKline agrees $3 billion fraud payout
IT'S a hefty pill to swallow.
GlaxoSmithKline has agreed to pay $3 billion for introducing "misbranded" drugs and failing to report safety data, following a criminal investigation by the US Department of Justice.
The settlement is the largest for healthcare fraud in US history.
"This historic action is a clear warning to any company that chooses to break the law," said James Cole, the US Deputy Attorney General, in a statement.
The charges related mainly to three drugs.
The investigators found that between 1998 and 2003, GSK unlawfully promoted an antidepressant, trade name Paxil, for treating depression in people under 18, despite no approval for this from the US Food and Drug Administration.
Likewise, from 1999 to 2003, GSK promoted Wellbutrin, a drug approved at that time only for major depressive disorder, for a host of other conditions, including sexual dysfunction and addiction to drugs.
Finally, the investigation found that between 2001 and 2007, GSK failed to send the FDA safety data which revealed that the diabetes drug Avandia carried risks of congestive heart failure and heart attacks.
"I want to express our regret and reiterate that we have learnt from the mistakes that were made," said Andrew Witty, chief executive officer of GSK, in a statement.
He added that the offences were symptomatic of conduct that is no longer tolerated.
"The company reached this settlement with the government to avoid the delay, expense, inconvenience and uncertainty of protracted litigation," said Witty.
The company's annual report reveals that GSK posted an operating profit last year of more than quadruple the fine, at $12.4 billion, and turnover of $43 billion.