In the largest healthcare fraud settlement in US history, GlaxoSmithKline has confirmed it will pay $3 billion in fines for unlawful promotion of the antidepressant drugs Paxil and Wellbutrin and for failing to report safety data about its controversial diabetes drug Avandia.
The drugs giant had previously set aside $2.20 billion to cover the settlement, but the figures are eye-watering and details of the practices employed by GSK reps makes for very uncomfortable reading. 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).
The list of misdemeanours is a long one. In terms of Paxil, the US government alleges that from April 1998 to August 2003, GSK unlawfully promoted the drug 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 holidays to tickets for Madonna concerts.
The documents also note that GSK indirectly paid Drew Pinsky, a well-known broadcaster and doctor in the USA, $275,000 in just two months in 1999 to promote off-label uses of Wellbutrin on radio shows. During one show, he claimed that the drug could explain a case where a woman suddenly started having 60 orgasms a night. The list goes on and on.
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 programmes 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".
In the USA, he noted that "we have fundamentally changed our procedures for compliance, marketing and selling" and "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".
GSK has also signed up to a five-year corporate integrity agreement that require the company to "implement and/or maintain major changes to the way it does business [and] implement and maintain transparency in its research practices".
The fine tops the $2.30 billion Pfizer paid in 2009 for illegally promoting four drugs, notably the withdrawn anti-inflammatory Bextra (valdecoxib). Just last month, Abbott Laboratories agreed to pay $1.60 billion after reaching a settlement concerning past sales and marketing practices relating to its seizure drug Depakote (divalproex).