In the largest healthcare fraud settlement in US history, GlaxoSmithKline has confirmed it will pay $3 billion in fines for the unlawful promotion of antidepressant drugs Paxil and Wellbutrin and for failing to report safety data about its controversial diabetes drug Avandia.
According to an article for PharmaTimes, the firm agreed to plead guilty to a three-count criminal information, and will pay $1 billion covering those charges, plus another $2 billion to resolve its civil liabilities relating to Paxil (paroxetine) Wellbutrin (bupropion) and Avandia (rosiglitazone).
According to reports, the US government alleges that from April 1998 to August 2003, GSK unlawfully promoted Paxil for treating depression in patients under age 18, while from January 1999 to December 2003, it pushed Wellbutrin, approved at that time only for major depressive disorder, for weight loss, sexual dysfunction, substance addictions and attention-deficit hyperactivity disorder, among other off-label uses.
As for Avandia, it is alleged that between 2001 and 2007, GSK failed to include certain safety data in reports to the US Food and Drug Administration, including information regarding two studies undertaken in response to concerns about the treatments cardiovascular safety.
Documents released concerning the settlement show the extent of kickbacks paid to doctors. Carmen Ortiz, the US Attorney for Massachusetts, noted that GSK’s sales force bribed physicians to prescribe products “using every imaginable form of high-priced entertainment”, from Hawaiian vacations to tickets for Madonna concerts.
The “historic settlement is a major milestone in our efforts to stamp out healthcare fraud,” said Bill Corr, deputy secretary of the Department of Health and Human Services. He added that “for a long time, our healthcare system had been a target for cheaters who thought they could make an easy profit at the expense of public safety, taxpayers, and the millions of Americans who depend on programs like Medicare and Medicaid”.
Commenting on the agreement, GSK chief executive Sir Andrew Witty said it “brings to resolution difficult, long-standing matters” for the firm. He added that “whilst these originate in a different era for the company, they cannot and will not be ignored. On behalf of GSK, I want to express our regret and reiterate that we have learnt from the mistakes that were made”. He went on to say the company made necessary changes as letting go personnel involved, etc.
The fine tops the $2.30 billion Pfizer paid in 2009 for illegally promoting four of their drugs, as well as the $1.60 billion Abbott Laboratories has agreed to pay after reaching a settlement concerning Depakote (divalproex).
But, is it enough of a penalty to send a big enough message that this is unacceptable behavior?
One, US watchdog group doesn’t thinks so. Public Citizen believes bigger penalties are necessary to stop such practices.
However, “despite the seemingly large sums”, Sidney Wolfe, director of Public Citizen’s Health Research Group believes it is not enough.
He claimed that the fines imposed on pharmaceutical companies “for dangerous and illegal conduct pale in comparison to the profits generated from such activity”. In his view, “the industry is therefore tacitly encouraged to continue its illegal activity”.
Dr. Wolfe went on to say that the settlement of criminal and civil violations “is nothing new for GSK”. He made reference to a 2010 Public Citizen report, which states that the firm “racked up more in fines and settlement payouts to the federal and state governments ($4.5 billion) than any other pharmaceutical company from 1991 through November 1, 2010”.
Dr. Wolfe says that “until more meaningful penalties and the prospect of jail time for company heads who are responsible for such activity become commonplace, companies will continue defrauding the government and putting patients’ lives in danger”.