Drugmaker GSK Settles Fraud Case for $3 Billion: A HealthCentral Explainer

ALTudor Editor
  • The giant drugmaker GlaxoSmithKline (GSK) has agreed to pay $3 billion in order to resolve criminal and civil charges rising from illegal promotion of some of their medications.


    What did GSK do?


    According to the U.S. Justice Department, GSK bribed doctors using high-priced forms of entertainment, such as Hawaiian vacations, spa programs, concert tickets, speaking engagements, and even a European pheasant hunt.


    These enticements were used in order to influence doctors so they’d be more willing to prescribe GSK drugs such as Imitrex, Lotronex, Valtrex, and Flovent, even if it wasn’t in a patient’s best interest.

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    The company also illegally promoted the use of some of their medications for conditions that the drugs were not approved to treat (so-called “off-label use”), and in the case of Avandia, ignored safety data on the risk of congestive heart failure and heart attack in patients who take the diabetes medication.


    What Does it Mean to Illegally Promote Medications?


    It’s illegal for a company to promote a drug for a use for which it doesn’t have U.S. Food and Drug Administration (FDA) approval. In this case, GSK promoted the use of Paxil as a treatment for depression in children, even though the drug was not approved for pediatric use.


    The corporation also promoted the drug Wellbutrin for weight loss, sexual dysfunction, substance addictions, and attention deficit hyperactivity disorder, although it was approved only for the treatment of major depressive disorder.


    Using a drug for an “off-label” purpose is something that doctors sometimes do when they feel it’s necessary for their patient’s care, but the drug company itself can’t promote their medication as treating a disorder without first getting FDA approval for the use of a medication for that particular condition.


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    The Problem With Avandia


    If you’re diabetic and have taken Avandia, you’re probably aware that the drug now has a “black-box warning” on the bottle. This warning comes after studies suggested the drug could increase a patient’s risk for heart attack and heart failure.


    According to U.S. prosecutors, GSK knew about Avandia’s link to heart problems and neglected to report safety data.


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    How Does the Fine Work?


    This $3 billion is the largest penalty ever paid by a drug company for a fraud case. Broken down, $2 billion of the fine is for civil penalties for Paxil, Wellbutrin and Avandia, as well as other drugs, while the other $1 billion goes toward criminal complaints about their failure to report Avandia’s safety data. In addition, GSK will be monitored by government officials for five years to ensure the company’s compliance.


    Whether this penalty will find its way back to consumers in the form of shifts in doctor’s prescribing practices, medication availability issues, or higher medication costs from GSK remains to be seen.

Published On: July 02, 2012