GlaxoSmithKline Reaches Plea Agreement Over Drug Labeling
By Jef Feeley and David Voreacos - Jul 2, 2012 10:17 AM ET
A U.S. unit of GlaxoSmithKline Plc (GSK) agreed to plead guilty and pay a criminal fine of $956.8 million for marketing drugs for unapproved uses, according to documents filed in federal court inBoston.
In a charging document filed today, London-based Glaxo admits to illegally promoting Paxil for children and adolescents, wrongfully marketing Wellbutrin for weight loss and purposes other than those approved by U.S. regulators, and failing to report data regarding the safety of its Avandia diabetes drug to regulators. The company has agreed to admit to the charges, which are misdemeanors, according to the filings.
Glaxo, the U.K.’s largest drugmaker, last year set aside 2.2 billion pounds ($3.5 billion) to cover the cost of the settlement, which resolves a seven-year investigation of the company’s marketing practices for the three drugs. The reserve brought to $6.4 billion the amount the drugmaker has set aside for legal costs tied to Avandia and the other medicines.
Glaxo also has paid more than $700 million to resolve patient lawsuits alleging Avandia caused heart attacks and strokes, according to people familiar with the accords, with settlements in those cases averaging around $50,000.
Many of those cases had been consolidated before a federal judge in Philadelphia as part of a multidistrict litigation for pretrial exchanges of information.
Federal prosecutors began an investigation in Colorado in 2004, later taken over by the U.S. attorney in Massachusetts, into whether Glaxo promoted drugs for unapproved uses, and into ways Glaxo potentially influenced doctors. The probe concerns nine of the company’s best-selling products from 1997 to 2004, including the Advair lung treatment, Glaxo said in its annual report.
The case is U.S. v. GlaxoSmithKline LLC, 12-10206, U.S. District court, District of Massachusetts (Boston).
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