Attorney General Kamala D. Harris, joined by other attorneys general and the U.S. government, this week announced a $3 billion settlement with GlaxoSmithKline (GSK) to resolve allegations the pharmaceutical company engaged in various illegal schemes related to the marketing and pricing of drugs it manufactures.
This week’s action is the largest healthcare fraud settlement in history. California will receive more than $46 million, the largest share among the states under the settlement.
The $3 billion settlement includes $2 billion in damages and civil penalties to compensate state and federal healthcare programs, including California’s Medi-Cal program, for harm allegedly suffered as a result of the illegal conduct.
In addition, GSK has agreed to plead guilty to federal criminal charges related to drug labeling and FDA reporting and pay a $1 billion criminal fine.
“California consumers have the right to expect that their health and well-being – and not profit – drives decisions about their care,” said Harris. “This settlement protects consumers and puts an end to unscrupulous marketing practices, kickbacks and illegal labeling of prescription drugs.”
California, along with 44 other states and the federal government, alleged that GSK engaged in a pattern of unlawfully marketing certain drugs for uses for which they were not approved by the Food and Drug Administration (FDA); making false representations regarding the safety and efficacy of certain drugs; offering kickbacks to medical professionals; and underpaying rebates owed to government programs for various drugs paid for by Medicaid and other federally-funded healthcare programs.
The government alleged that GSK marketed depression drug Paxil for off-label uses, such as use by children and adolescents.
The company marketed the depression drug Wellbutrin for off-label uses, such as for weight loss and treatment of sexual dysfunction, and at higher-than-approved dosages; and it marketed the asthma drug Advair for off-label uses, including first-line use for asthma and the nausea drug Zofran for off-label uses, including pregnancy-related nausea.
The company also offered kickbacks, including entertainment, cash, travel, and meals, to healthcare professionals to induce them to promote and prescribe its drugs.