International pharmaceutical giant GlaxoSmithKline, LLC (GSK) recently pleaded guilty to alleged criminal activities and agreed to resolve civil issues including "unlawful promotion of certain prescription drugs, its failure to report certain safety data, and its civil liability for alleged false price reporting practices."1 The alleged crimes committed by GSK include the following:
Paxil
Wellbutrin
Avandia
Civil Settlement Agreement
According to terms of the civil settlement agreement, GSK was found guilty of promoting the drugs Paxil, Wellbutrin, Advair, Lamictal and Zofran for off-label, non-covered uses, and paying kickbacks to physicians to prescribe those drugs as well as the drugs Imitrex, Lotronex, Flovent and Valtrex; making false and misleading statements concerning the safety of Avandia; reporting false best prices and underpaying rebates owed under the Medicaid Drug Rebate Program.
The punishment: Pay $3 billion to resolve its criminal and civil liability; execute a five-year corporate integrity agreement with the Department of Health and Human Services.
The above is taken directly from the press release issued by the U.S. Department of Justice.1 And while this all sounds like a big bust for the feds, this is how GSK reported the event:2 "Under the terms of the settlement, GSK will plead guilty to misdemeanor violations"; "Fundamental changes to US compliance, marketing and selling procedures [were] implemented in recent years"; and "GSK will make payments totalling $3 [billion] which are covered by existing provisions and will be funded through existing cash resources." [Emphasis added]
So, at the end of the day, after getting caught in a well-orchestrated scheme of fraud, kickbacks and rewards that influenced many MDs and potentially endangered the lives of millions of patients, many of those children, GSK pleads guilty to a few misdemeanors, pays some fines from cash reserves and agrees to marketing changes, most of which were already in place. In fact, "GSK stock rose after news of the settlement, climbing 1.6% to a share price of $46.30."3
Perhaps the saddest part of all is that GSK can go right on selling the very drugs in question. It didn't lose its license to sell these drugs and is not banned from making more money in the Medicare and Medicaid programs.
Make no mistake: This was a marketing campaign that is probably similar to campaigns used to market most drugs. In this case, GSK got caught and had to give back some of its profits; but the power of Big Pharma is still growing and still impacting the health of most consumers.
References
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