Glaxo agrees to pay $150m in drug-price fraud case
WASHINGTON -- GlaxoSmithKline PLC will pay $150 million to settle claims it overcharged the government for two antinausea drugs, and prosecutors say they're looking into 150 cases of drug price fraud.
Scrutiny of the pharmaceutical industry has increased along with the portion of healthcare costs attributable to prescription drugs. That attention is likely to grow as the government readies a drug insurance program for older Americans under Medicare that is expected to increase sharply its spending on medicines.
The Glaxo settlement is the latest in a series of whistle-blower claims that have resulted in $2.4 billion in payments from drug companies in recent years.
Glaxo engaged in a scheme to inflate the price of Zofran and Kytril for the Medicare and Medicaid programs, which reimburse healthcare providers based on the manufacturers' prices, the government said. The drugs, typically administered in doctors' offices or hospitals, are used mainly to counter nausea brought on by chemotherapy and radiation.
The company charged healthcare providers less for the drugs, knowing they would get to keep the difference and would be more likely to prescribe them again, the Justice Department said.
Glaxo admitted no wrongdoing as part of the settlement. ''We believe that our price reporting was lawful and was done in good faith, but we've agreed to this settlement to avoid the delay, expense, and uncertainty of litigation," said Mary Anne Rhyne, a company spokeswoman.
The case resulted from a whistle-blower lawsuit filed by Ven-A-Care of the Florida Keys Inc., a small home-infusion company that has won several suits that made similar allegations against other drug makers.
Senator Charles Grassley, an Iowa Republican, Congress' leading advocate for whistle-blower protection, said the ''importance of whistle-blowers will only increase as the new Medicare prescription drug benefit takes effect. Bad actors in the industry should know that these good guys are on the case."
