GlaxoSmithKline to Pay $3 BN for Illegal MarketingJuly 2, 2012 — Drug company GlaxoSmithKline (GSK) has agreed to pay the U.S. government $3 billion to settle criminal and civil charges that the company illegally engaged in off-label drug marketing and failed to inform the U.S. Food and Drug Administration (FDA) of safety data. The fine includes $1 million in criminal fines and $2 billion in civil fines, the largest judgement ever against a pharmaceutical company. Government monitors will also ensure compliance at the company for the next five years.

 

GSK agreed to plead guilty to the following criminal counts:

  • Illegally promoting Paxil for off-label use in children with depression. The company engaged in this marketing from April 1998 through August 2003, despite the fact that the FDA never approved Paxil for people under 18 years old.
  • Illegally promoting Wellbutrin for off-label use in weight loss, treating sexual dysfunction, substance addictions, and attention deficit hyperactivity disorder (ADHD). The company engaged in this marketing from January 1999 to December 2003, despite the fact that Wellbutrin had only been approved by the FDA to treat major depressive disorder.
  • Illegally withholding the results of a post-marketing safety study which linked the drug Avandia to a higher risk of heart attack and congestive heart failure. The company engaged in this marketing from 2001 through 2007.

Pharmaceutical companies engage in off-label promotion of their drugs in an effort to make the drugs more profitable. It can take more than a decade of research and development and billions of dollars to get a drug to market. Once it is approved, the companies are under extreme pressure to make the drug a success. Although illegal, drug companies sometimes engage in off-label promotion of their drugs. This typically involves enticing physicians with “perks” to prescribe the drug to a wider group of patients than the FDA intended.

According to prosecutors, some examples of GSK “perks” included meals, spa treatments, Hawaiian vacations, European pheasant hunts, multimillion dollar speaking tours, and more.

The victims of this process are the patients and the U.S. taxpayer. GSK promoted Paxil for use in children, despite the fact that the FDA never approved the use of Paxil in children and it was never proven to be safe. Furthermore, when doctors choose to prescribe expensive new drugs, the added costs is typically levied onto the U.S. taxpayer through public health programs.

The Justice Department has become more aggressive in pursing cases against pharmaceutical companies in recent years. Part of the effort is in response to rapidly rising healthcare costs. Another reason the Justice Department is going after drug companies now is because, “For far too long, we have heard that the pharmaceutical industry views these settlements merely as the cost of doing business. That is why this administration is committed to using every available tool to defeat health care fraud,” said Acting Assistant Attorney General, Stuart F. Delery.

The second-highest judgement against a pharmaceutical company was in 2009, when Pfizer was forced to pay $2.3 billion for illegally promoting 13 different drugs.

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