GSK to Pay $3 Billion to Settle Criminal Charges on Avandia, Paxil and Wellbutrin

Washington, DCIn what is being touted as the largest case of healthcare fraud in US history, GlaxoSmithKline Plc (GSK) is pleading guilty to misdemeanor criminal charges and will pay $3 billion in settlement of those charges relating to its drugs Paxil, Wellbutrin, and Avandia.

According to allegations by the US Justice Department, GSK marketed the antidepressant drugPaxil for off-label use to patients under the age of 18, and marketed both Paxil and Wellbutrin for weight loss and treatment of sexual dysfunction, both indications that neither drug is approved for.

The company went to extreme lengths to promote the drugs, such as distributing a misleading medical journal article and providing doctors with meals and spa treatments that amounted to illegal kickbacks, prosecutors said.

Reuters News reports that GSK is also charged with failing to provide the US Food and Drug Administration with safety data about its diabetes drug Avandia, which is in violation of US law.

GSK engaged in these activities from the 1990s through to 2007, and each of the three violations associated with the three drugs carries a misdemeanor criminal charge.

The agreement between GSK and the US Justice Department "is unprecedented in both size and scope," said James Cole, the No. 2 official at the U.S. Justice Department. He called the action "historic" and "a clear warning to any company that chooses to break the law." The settlement includes $1 billion in criminal fines and $2 billion in civil fines.

Additionally, GSK has agreed to strict oversight of its sales force by the US government in an effort to prevent the use of kickbacks or other prohibited practices.