Justice Department, GlaxoSmithKline settle charges for $3 billion

The Justice Department announced that drugmaker GlaxoSmithKline had agreed to pay $3 billion and plead guilty to criminal and civil charges related to the off-label marketing of several drugs, including the diabetes drug Avandia and the anti-depressant Paxil.

Avandia reached the market but was later pulled because it was found to cause heart problems in patients.

Paxil remains on the market, but the government alleged that from April 1998 to August 2003 GSK illegally promoted Paxil for treating depression in patients under age 18, even though the FDA has never approved it for pediatric use.

GSK is based in London, but has big operations in the Philadelphia area.

The $3 billion figure is the new record for pharmaceutical company financial settlements with the government over illegal marketing of drugs. The previous mark was the $2.3 billion paid by Pfizer in 2009.

“Today’s multi-billion dollar settlement is unprecedented in both size and scope," James M. Cole, Deputy Attorney General, said in a statement. "It underscores the Administration’s firm commitment to protecting the American people and holding accountable those who commit health care fraud. At every level, we are determined to stop practices that jeopardize patients’ health, harm taxpayers, and violate the public trust – and this historic action is a clear warning to any company that chooses to break the law.”

GlaxoSmithKline CEO Sir Andrew Witty said in statement, “Today brings to resolution difficult, long-standing matters for GSK. 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."

“We are deeply committed to doing everything we can to live up to and exceed the expectations of those we work with and serve. Since I became CEO, we have had a clear priority to ingrain a culture of putting patients first, acting transparently, respecting people inside and outside the organization and displaying integrity in everything we do.

“In the U.S., we have taken action at all levels in the company. We have fundamentally changed our procedures for compliance, marketing and selling. When necessary, we have removed employees who have engaged in misconduct. In the last two years, we have reformed the basis on which we pay our sales representatives and we have enhanced our ability to ‘claw back’ remuneration of our senior management."

A link to the Justice Department page with a batch of documents is here.

A link to the GlaxoSmithKline statement is here.