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Diabetes, Asthma, Antidepressant Drug Firm Fined $3 Billion!

by JC Spencer July 2012

This case is reported to be the largest healthcare fraud in U.S. history. The British drug giant, GlaxoSmithKline is to plead guilty and is to pay $3 billion ($1 billion in criminal fines and $2 billion in civil fines) from their existing cash resources while their stock increases on the same day on the New York Stock Exchange.

The GSK settlement is the largest criminal case involving a drugmaker in U.S. history. In 2009, Pfizer Inc agreed to pay $2.3 billion to settle allegations it improperly marketed 13 drugs. GSK failed to give the U.S. Food and Drug Administration safety data about its diabetes drug Avandia, in violation of U.S. law, prosecutors said.

The diabetes medication Avandia is one of the three drugs concerned in the fraud case with a total involvement of 10 drugs, including Advair, Paxil, and Wellbutrin. It agreed to resolve civil liability for promoting asthma drug Advair and two lesser-known drugs for unapproved uses. The company reportedly paid "Lifechangers" host Dr. Drew Pinsky $275,000 to promote the antidepressant Wellbutrin for non-approved uses such as obesity, addictions and sexual dysfunction. The Justice Department's complaint against Dr. Drew found that he never revealed he was a paid spokesman. In a statement to Forbes, Dr. Drew defended comments on Wellbutrin, citing a clinical study he conducted over a decade ago.

Carmin Ortiz, US attorney said that GSK was also found guilty of paying kickbacks to doctors. "The sales force bribed physicians to prescribe GSK products using every imaginable form of high-priced entertainment, from Hawaiian vacations [and] paying doctors millions of dollars to go on speaking tours, to tickets to Madonna concerts."

The company went to extreme lengths to promote the drugs, such as distributing a misleading medical journal article and providing doctors with meals and spa treatments that amounted to illegal kickbacks, prosecutors said.

Chief Executive Officer Andrew Witty said the misconduct originated "in a different era for the company" and will not be tolerated. "I want to express our regret and reiterate that we have learnt from the mistakes that were made," he said in a written statement.