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UK drugs giant GSK pleads guilty to US health care fraud

The US Justice Department (DOJ) on Monday said UK-headquartered pharmaceuticals giant GlaxoSmithKline has agreed to plead guilty to criminal charges in respect of company's sales, marketing, and pricing practices. The guilty plea constitutes the largest health care fraud settlement in United States history. 

Under the agreements announced, GSK will plead guilty to criminal charges and pay $1bn in criminal fines and forfeitures for illegally marketing and promoting the drugs Paxil and Wellbutrin for uses not approved by the FDA (Federal Drug Administration) -- including the treatment of children for depression, and the treatment of other patients for ailments ranging from obesity, to anxiety, to addiction and ADHD - - and for failing to report important clinical data about the drug Avandia to the FDA.

GSK will pay an additional $2bn to resolve civil allegations that it caused false claims to be submitted to federal health care programs for these and other drugs as a result of the company's illegal promotional practices and payments to physicians. 

The DOJ said this settlement also resolves a civil investigation of the company's alleged underpayment of rebates that were required under the Medicaid Drug Rebate Program.

Finfacts Team, July 3, 2012