PHM-Exch> Glaxo to pay $3 bn for largest health care fraud in US

[Claudio Schuftan]

From: Gopal Dabade <drdabade at gmail.com>


http://www.washingtonpost.com/national/health-science/glaxosmithkline-to-pay-3b-in-largest-healthcare-fraud-settlement-in-us-history/2012/07/02/gJQArBKIJW_story.html

 *Glaxo to pay $3 bn for largest health fraud in US*

By Associated Press, Tuesday, July 3, 5:38 AM

 TRENTON, N.J. — British drug maker GlaxoSmithKline will pay $3 billion in
fines — the largest health care fraud settlement in U.S. history — for
criminal and civil violations involving 10 drugs that are taken by millions
of people.

 The Justice Department said Monday that GlaxoSmithKline PLC will plead
guilty to promoting popular antidepressants Paxil and Wellbutrin for
unapproved uses. The company also will plead guilty to failing to report to
the government for seven years some safety problems with diabetes drug
Avandia, which was restricted in the U.S. and banned in Europe after it was
found in 2007 to sharply increase the risks of heart attacks and congestive
heart failure.

 In addition to the fine, Glaxo agreed to resolve civil liability for
promoting Paxil, Wellbutrin, asthma drug Advair and two lesser-known drugs
for unapproved uses. The company also resolved accusations that it
overcharged the government-funded Medicaid program for some drugs, and that
it paid kickbacks to doctors to prescribe several drugs including Flovent
for asthma and Valtrex for genital herpes.

 Sir Andrew Witty, Glaxo’s CEO, expressed regret Monday and said the
company has learned “from the mistakes that were made.”

 This is the latest in a string of settlements related to drug companies
putting profits ahead of patients. In recent years, the government has
cracked down on drug makers’ tactics, which include marketing medicines for
unapproved uses. While doctors are allowed to prescribe medicines for any
use, drug makers cannot promote them in any way that is not approved by the
U.S. Food and Drug Administration.

Glaxo is scheduled to plead guilty to the criminal charges and have the
settlement approved at a hearing Thursday in U.S. District Court in Boston.
In addition to the $3 billion penalty — which includes a $1 billion
criminal fine and forfeiture and $2 billion to resolve civil claims — Glaxo
agreed to be monitored by the government for five years to ensure that it
complies with marketing and other rules.

 The case against Glaxo was originally brought in January 2003 by two
whistleblowers, former Glaxo sales representatives Greg Thorpe and Blair
Hamrick. In January 2011, the federal government joined in the case.

 Prosecutors said Glaxo illegally promoted Paxil for treating depression in
children from 1998 to 2003, even though it wasn’t approved for anyone under
age 18. The company also promoted Wellbutrin from 1999 through 2003 for
weight loss, sexual dysfunction, substance addictions and attention deficit
hyperactivity disorder, although it was only approved for treatment of
major depression.

 Starting in 2001, Thorpe reported to his district manager, then to Glaxo’s
human resources department and finally to Glaxo’s chief of global
compliance about a number of improper marketing practices. The compliance
chief began an internal investigation, which confirmed Thorpe’s allegations
through various ways including marketing materials and interviews with
Hamrick and other sales representatives, according to lawyers for the two
men.

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