(By Balachander) GlaxoSmithKline Plc (NYSE:GSK) (LON: GSK) has agreed to pay $3 billion to resolve multiple federal investigations into the British pharmaceutical giant's marketing practices, its failure to report certain safety data, and alleged false price reporting, marking the largest health care fraud settlement in U.S. history.
The agreement resolves criminal and civil liabilities related to: a probe begun by the US Attorney's office of Colorado in 2004 and later taken over by the US Attorney's Office of Massachusetts into GSK's sales and marketing practices for nine products; the U.S. Department of Justice's (DOJ) investigation of possible inappropriate use of the nominal price exception under the Medicaid Rebate Program; and the Department of Justice's investigation of the marketing and regulatory submissions of Avandia.
Under the terms of the settlement, GSK has agreed to plead guilty related to certain aspects of the marketing of Paxil for paediatric use and of Wellbutrin for certain uses, and for failure to include information regarding the diabetes drug Avandia to the U.S. Food and Drug Administration (FDA) in mandatory reports.
The DOJ said GSK agreed to pay $1 billion under the terms of the plea agreement, which also includes non-monetary compliance commitments. In adddition, GSK agreed to pay $2 billion to resolve its civil liabilities with the federal government and states under the False Claims Act.
The nine prescription drugs covered by the settlement included Advair, Wellbutrin, Paxil, Lamictal, Zofran, Imitrex, Lotronex, Flovent and Valtrex.
The civil settlement reached with the U.S. government does not constitute an admission of any liability or wrongdoing in the selling and marketing of Lamictal, Zofran, Imitrex, Lotronex, Flovent, Valtrex, Avandia or Advair products, nor in its nominal pricing practices, GSK said in a statement.