Drug giant, GlaxoSmithKline, which produces products such as Aquafresh, Abreva, and Nicorette will plead guilty to the biggest health care fraud settlement in American history.
GlaxoSmithKline was forced to pay $3 billion for unlawful promotion of particular prescription drugs. They pled guilty to three counts of criminal information, two counts of introducing misbranded antidepressant drugs Paxil and Wellbutrin to interstate commerce and one count of failing to inform the Food and Drug Administration (FDA) on the safety data regarding the diabetes drug Avandia.
Out of the $3 billion, $1 billion will go to criminal complaints, and the $2 billion will go to resolving civil liabilities concerning Paxil, Wellbutrin and Avandia, as well as other drugs and allegations of pricing fraud.
According to the Justice Department, GlaxoSmithKline illegally promoted Paxil for treating depression among patients under the age of 18 without approval from the FDA for pediatric use. The government also alleged the company is responsible for publishing and distributing misleading medical journal articles, which misrepresented the drug’s effectiveness in treating depression in adolescents, also sponsoring dinners, spa programs and other activities for researchers.
Along with issuing misleading information, the Justice Department argues that GlaxoSmithKline paid millions of dollars to doctors to market Wellburtin, which was approved for depression, for off-label uses by funding meetings, which occasionally took place at lavish resorts.
Regarding Avandia, GlaxoSmithKline failed to inform safety data between 2001 and 2007 that ultimately led to "black box" warning labels stating the drug’s potential to increase risk for heart attack and heart failure.
In 2011 alone, GlaxoSmithKline returned to their shareholders in dividends and share buy-backs – an increase of 75 percent versus 2010. Compared to the $3 billion GlaxoSmithKline is forced to pay, they generated £5.6 billion, which converts to a little over $7 billion dollars.
This settlement indicates the end of a massive investigation involving the FDA, FBI and Department of Health and Human Services.