Largest Health Care Fraud Settlement in U.S. History Nets $3 Billion

July 12, 2012 -- Drug giant GlaxoSmithKline (GSK) is probably a little under the weather these days. As a result of improperly marketing three of its drugs for non-FDA approved uses, the company has agreed to resolve its criminal and civil liability for $3 billion. This amount includes approximately $1 billion in criminal fines and $2 billion for the settlement of false claims to federal and state governments.

The settlement arises from the company’s participation in a misleading medical journal article which misreported that a clinical trial of Paxil was effective in the treatment of depression in patients under the age of 18. This information is in direct contradiction to a warning on Paxil’s label stating that antidepressants may increase the risk of suicidal thinking and behavior in studies of patients under age 18. The government contended that from April 1998 to August 2003, the drug company sponsored dinner programs and similar activities to promote the drug for non-approved uses and failed to disclose other studies that contradicted their own misleading article.

In similar fashion, the drug giant promoted an anti-depressant drug called Wellbutrin for non-FDA approved uses such as weight loss, treatment of sexual dysfunction, substance addictions, and Attention Deficit Hyperactivity Disorder. The government contended that from January 1999 to December 2003, GSK paid millions to doctors to speak at and attend lavish resorts, where the drug was promoted, and used sham boards and sales representative to promote the drug for off-label uses.

A third major drug, Avandia, was FDA approved for use in the treatment of diabetes. However, government prosecutors alleged that between 2001 and 2007, GSK failed to advise the FDA of safety data from post-marketing studies indicating concerns regarding the cardiovascular safety of Avandia.

This potential $3 billion settlement would also resolve additional charges of non-approved uses of several other drugs; payments of kickbacks to doctors to prescribe the drugs; reporting false best prices; and underpaying rebates under the Medicaid Drug Rebate Program.

The investigation involved a number of investigative agencies, including the U.S. Postal Service Office of Inspector General.