GSK to Pay $3B For Illegal Marketing of Avandia, Paxil, Wellbutrin

Drug maker GlaxoSmithKline has agreed to pay $3 billion to resolve federal criminal and civil charges stemming from the illegal marketing and promotion of some of their top selling medications, including Avandia, Paxil and Wellbutrin.

Under the terms of the deal reached with the U.S. Department of Justice, which represents the largest settlement for healthcare fraud in U.S. history, Glaxo will pay a total of $1 billion to resolve criminal charges, including a fine of $956,814,400, and another $2 billion to resolve civil claims under the federal government’s False Claims Act.

The settlement stems from a whistleblower lawsuit originally brought by four employees of the company, who will be entitled to recover a portion of the civil settlement obtained under the qui tam provisions of the False Claims Act of 1863.

According to the claim, GlaxoSmithKline illegally promoted their blockbuster antidepressant drug Paxil for treating depression in children from April 1998 to August 2003. However, the FDA had not approved it for use by anyone under the age of 18.

The drug maker also promoted another of their antidepressants, Wellbutrin, from January 1999 to December 2003, for weight loss and the treatment of sexual dysfunction, as well as for substance addictions and attention deficit hyperactivity disorder, although the medication was only approved for treatment of major depressive disorder.

The settlement also resolves claims involving the controversial diabetes drug Avandia, which GlaxoSmithKline was accused of trying to secretly market for uses other than what it was approved for. The DOJ began investigating GSK in 2004, for both off-label marketing and Medicaid fraud.

In 2009, Pfizer reached a similar settlement with the U.S. government, agreeing to pay $2.9 billion for illegally marketing a number of drugs, in what was the largest healthcare fraud settlement until this Glaxo deal was reached.

Although the fines and settlements are designed to deter pharmaceutical companies from placing their desire for profits before consumer safety, critics have suggested that such payments, as well as settlements paid to resolve product liability lawsuits, have become just another cost of doing business for pharmaceutical companies.

Critics have called for fines to be larger and for corporate executives to face actual jail time over illegal business decisions.