GlaxoSmithKline Agrees to $3 Billion Settlement in Healthcare Fraud Case

Tuesday, July 10, 2012

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

GlaxoSmithKline (GSK), a prescription drug manufacturer, has agreed to pay $3 billion in fines to resolve healthcare fraud allegations. The settlement was announced by federal prosecutors on July 1, 2012, and in a press release from the Florida Attorney General on July 2, 2012. This is the largest healthcare fraud settlement in U.S. history.

Settlement Resolves List of Allegations Related to Healthcare Fraud.

The settlement resolves allegations that GSK:

  • Marketed the depression drug Paxil for off-label uses, such as use by children and adolescents; 
  • Marketed the depression drug Wellbutrin for off-label uses, such as for weight loss and treatment of sexual dysfunction, and at higher-than-approved dosages; 
  • Marketed the asthma drug Advair for off-label uses, including first-line use for asthma;
  • Marketed the seizure medication Lamictal for off-label uses, including bipolar depression, neuropathic pain, and various other psychiatric conditions; 
  • Marketed the nausea drug Zofran for off-label uses, including pregnancy-related nausea; 
  • Made false representations regarding the safety and efficacy of Paxil, Wellbutrin, Advair, Lamictal, Zofran, and the diabetes drug Avandia;
  • Offered kickbacks to healthcare professionals to induce them to promote and prescribe certain prescription drugs; and
  • Submitted incorrect pricing data for various prescription drugs, thereby underpaying rebates owed to Medicaid and other federal healthcare programs.

GSK to Plead Guilty to Criminal Charges as Part of Settlement.

As part of the settlement, GSK has also agreed to plead guilty to criminal charges that it violated the federal Food, Drug, and Cosmetic Act (FDCA). Allegedly, GSK introduced Wellbutrin and Paxil into interstate commerce when the drugs contained labels that were not in accordance with their FDA approvals. Additionally, GSK allegedly failed to report certain clinical data regarding Avandia to the FDA.

Florida to Receive $56 Million In Settlement.

Florida will receive more than $56 million as part of the settlement with GSK. Florida Attorney General, Pam Bondi, announced the state's participation in the settlement on July 2, 2012.

Settlement Stems From Whistleblower Actions.

The settlement is based on four qui tam, or whistleblower, actions brought by individuals pursuant to state and federal false claims. To view the federal False Claims Act, click here. A National Association of Medicaid Fraud Control Units team, along with several other federal agencies, investigated the matter and conducted settlement negotiations with the defendants. Florida’s civil investigation was handled by the Attorney General’s Complex Civil Enforcement Bureau, which is part of the Medicaid Fraud Control Unit.

Contact Health Law Attorneys Experienced in Healthcare Fraud Cases.

The Health Law Firm represents physicians, medical practices, pharmacists, pharmacies, and other health providers in healthcare fraud cases, including investigations, regulatory matters, litigation, and audits involving government health programs (Medicare, Medicaid, TRICARE).

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Sources Include:

Meale, Jenn. "Attorney General Bondi's Office Reaches Historic Healthcare Fraud Settlement." Florida Office of the Attorney General. (July 2, 2012). Press Release. From:
http://www.myfloridalegal.com/newsrel.nsf/newsreleases/E494FDADFF113AC885257A2F0068F790

Schmidt, Michael S. and Katie Thomas. "GlaxoSmithKline Agrees to Pay $3 Billion in Fraud Settlement." New York Times. (July 2, 2012). From:
http://www.nytimes.com/2012/07/03/business/glaxosmithkline-agrees-to-pay-3-billion-in-fraud-settlement.html?pagewanted=all

About the Author:  George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

Tag words: Florida, Attorney General, GlaxoSmithKline, GSK, settlement, FDA, False Claims Act, healthcare fraud, Medicare, Medicaid, fraud defense attorneys, audit, Florida Medicaid, fraud schemes, whistleblower, qui tam, realtor, Medicaid Fraud Control Unit, MFCU

7/10/2012

Like this blog? Add your public comments:

Items in bold indicate required information.