British pharmaceutical manufacturer GlaxoSmithKline has agreed to plead guilty to criminal charges in the US and pay $US3 billion in fines for promoting its best-selling antidepressants for unapproved uses and failing to report safety data about a top diabetes drug.
According to US federal prosecutors the deal with GlaxoSmithKline, the world’s fourth-largest pharmaceutical company measured by 2009 prescription drug sales after Pfizer, Novartis and Sanofi, also includes penalties for it improperly marketing half-dozen other drugs and comes on top of a $1.6 billion fine levied in May on Abbott Laboratories over the marketing of the antipsychotic drug Depakote, while an agreement with Johnson & Johnson over its off-label promotion of another antipsychotic drug, Risperdal, could see the pharmaceutical giant fined as much as $2 billion.
However, while the fines being levied against “big pharma” are sizable, critics claim that even fines of this magnitude are not enough to deter drug companies from unlawful behavior.
GlaxoSmithKline fine just a drop in the ocean
According to IMS Health, a data group that consults for drugmakers, the $3 billion represents only a portion of what GlaxoSmithKline made on the drugs with Avandia racking up $10.4 billion in sales, Paxil $11.6 billion, and Wellbutrin $5.9 billion during the years covered by the settlement.
“Money doesn’t deter corporate malfeasance. The only thing that will work in my view is CEO’s and officials being forced to resign and individual culpability being enforced”, says Eliot Spitzer, who, as New York’s attorney general, sued GlaxoSmithKline in 2004 over similar accusations involving Paxil.
The settlement with GlaxoSmithKline arose following claims by four employees, including a former senior marketing development manager and a regional vice president, about a range of improper practices from the late 1990s to the mid-2000s, including that GlaxoSmithKline had tried to win over doctors by paying for trips to Jamaica and Bermuda, as well as spa treatments and hunting excursions.
USA False Claims Act
Though no individuals have been charged in any of the cases, US Justice Department officials claim the prosecutions under its so-called whistle-blower law, officially the False Claims Act, are well worth the effort, generating more than $15 in recoveries for every $1 it spends.
Prosecutors said GlaxoSmithKline had marketed Wellbutrin for conditions like weight loss and sexual dysfunction when it was approved only to treat major depressive disorder, while with Avandia, whose use was severely restricted in 2010 after it was linked to heart risks, the company had failed to report data from studies detailing the safety risks to the US-FDA.
US deputy attorney general James M. Cole said, “today’s multibillion-dollar settlement is unprecedented in both size and scope. It underscores the administration’s firm commitment to protecting the American people and holding accountable those who commit health care fraud.”
Andrew Witty, chief executive of GlaxoSmithKline, said the company has since changed many of its policies, including no longer rewarding sales representatives for the number of drug prescriptions sold.
“On behalf of GSK, I want to express our regret and reiterate that we have learned from the mistakes that were made”, Mr Witty said.
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