Drug giant GlaxoSmithKline to pay $35 million to Massachusetts Medicaid program as part of $3 billion national settlement over marketing

Pharmaceutical giant GlaxoSmithKline has agreed to pay more than $35 million to the Massachusetts Medicaid program as part of the British drug maker’s $3 billion settlement Monday with federal and state authorities in the largest US health care fraud case ever.

The massive case centers around the promotion of prescription drugs for uses not approved by federal regulators, which is illegal. Although doctors may prescribe drugs for off-label treatments, companies must limit their marketing to approved uses.

“These were drugs that are very well known,’’ Massachusetts Attorney General Martha Coakley said. Her office led a five-state delegation in the settlement negotiations. “Widespread marketing, with misrepresentations about the safety and efficacy of these drugs, can give doctors a false sense of security,’’ Coakley said. “And this ultimately has an impact on consumer safety.’’


Under the national settlement, GlaxoSmithKline will plead guilty to two counts of introducing misbranded drugs, Paxil and Wellbutrin, into interstate commerce and one count of failing to report safety data about the diabetes drug Avandia to the Food and Drug Administration.

GlaxoSmithKline will pay a total of $1 billion to resolve the criminal allegations, including a fine of $956.8 million and a forfeiture of $43.2 million. The settlement still must be approved by the US District Court.

Separately, it will pay $2 billion to resolve civil liabilities with the federal government and states under the False Claims Act. The civil settlement resolves unlawful promotion and pricing fraud charges relating to Paxil, Wellbutrin, and Avandia.

In a statement, GlaxoSmithKline said it will fund the settlement through existing cash resources and has taken steps to change its compliance and marketing procedures in the United States.

“Today brings to resolution difficult, long-standing matters,’’ GlaxoSmithKline chief executive Sir Andrew Witty said in a company statement. “Whilst these originate in a different era for the company, they can not and will not be ignored. On behalf of GSK, I want to express our regret and reiterate that we have [learned] from the mistakes that were made.’’

Loading Comments...