Large pharmaceutical company GlaxoSmithKline (GSK) has agreed to pay $3 billion in order to resolve charges of engaging in illegal schemes related to unlawful marketing and pricing of some of the drugs it manufactures in what has become the largest healthcare fraud scheme in the country's history.
New York Attorney General Eric T. Schneiderman announced Monday that as part of a national settlement with New York, 42 states, Washington, D.C. and the federal government, GSK will pay a total of $2 billion in damages and civil penalties in order to compensate for the company's illegal activities. GSK manufactures a number of big-name drugs including Paxil, Wellbutrin and Advair.
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GSK has also agreed to plead guilty to federal criminal charges for misconduct related to drug labeling and FDA reporting. They will pay an additional $1 billion criminal fine in connection with those charges and New York's Medicaid program will receive over $146 million in recoveries from the company.
New York state government, as well as the federal government, said that GSK was involved in a pattern of unlawfully marketing some of their drugs for uses not approved by the Food and Drug Administration (FDA). They also charged that the company was making false representations regarding the safety and efficacy of certain drugs; offering kickbacks to medical professionals; and underpaying rebates owed to government programs for various drugs paid for by Medicaid and other federally-funded healthcare programs.
"GlaxoSmithKline's misconduct was breathtaking in its scale and scope." said Schneiderman in a press release. "There are no excuses for deceptively marketing unapproved drugs to children, offering kickbacks to healthcare professionals and ripping off the taxpayers by defrauding Medicaid and other programs."
A spokesperson from Attorney General Shneiderman's office delined to comment further on the matter to Healthcare Finance News on Tuesday.
This record agreement settles charges that GSK engaged in the following activities:
Some of the charges that were settled Monday include marketing the depression drug, Paxil, for off-label uses, such as use by children and adolescents; marketing the depression drug, Wellbutrin, for off-label uses, such as for weight loss and treatment of sexual dysfunction, and at higher-than-approved dosages; and marketing the asthma drug, Advair, for off-label uses, including first-line use for asthma.
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As part of the settlement, GSK has also agreed to plead guilty to criminal charges that it violated the federal Food, Drug, and Cosmetic Act (FDCA) in connection with certain activities. The government alleged that GSK introduced Wellbutrin and Paxil into interstate commerce when the drugs were misbranded, meaning containing labels that were not in accordance with their FDA approvals, and that GSK failed to report certain clinical data regarding Avandia to the FDA.
A National Association of Medicaid Fraud Control Units (NAMFCU) team participated in the investigation and analysis of the claims and conducted the settlement negotiations with GSK on behalf of the settling states. In addition to New York, members included representatives from Massachusetts, California, Colorado and Ohio.
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