GlaxoSmithKline has agreed to pay $3 billion as part of a guilty plea for drug fraud charges. California's take on that payment will be $46 million. According to wide-spread news reports, the British pharmaceutical company agreed to pay the $3 billion for drug fraud related to Paxil, Avandia and Wellbutrin.
The fraud is related to inappropriate marketing and potentially dangerous side effects for the three well-known drugs. Oddly, a different type of pharmaceutical side effect occurred when GSK stock rose 79 cents to $46.36 as the settlement and guilty plea made the news.
When the Food and Drug Administration approves a drug for release, it does so with specific purposes and therapeutic treatments tied to that drug. For each of the three drugs, the fraud charge was related to a slightly different misrepresentation or usage that was not approved by the FDA.
Paxil and Wellbutrin are drugs used for major depression. These drugs were inappropriately marketed by GSK. Paxil was marketed for use by those younger than 18 years of age. It is well known that teenagers are not the same as adults, and can have different drug reactions. Pediatric use of Paxil was not approved by the FDA.
The government charged GlaxoSmithKline with promoting Wellbutrin for weight-loss, sexual dysfunction and substance abuse addictions. U.S. Justice Department prosecutors also accused GSK of paying doctors to promote the unapproved uses of Wellbutrin.
Avandia is used to treat diabetes. GSK was accused of neglecting to include important potential side effects connected with the use of Avandia.
For its part, GlaxoSmithKline executives said that those practices were old news. An executive said the company wanted, "to put behind us these long-standing investigations of what was, for the most part, very old conduct."
Detractors claim that GSK got off easy and killed three birds with one very large boulder. The company committed different types of fraud for these three drugs, and could have been liable for three different sets of consequences. Detractors also claim that inappropriate marketing practices such as these are likely to continue due to the lack of any criminal consequences for company leaders who are responsible.
As a separate issue, if there are people in California or elsewhere, who suffered a personal injury due to the side effects of Paxil, Wellbutrin or Avandia, GlaxoSmithKline could be held liable for damages, including pain and suffering.
Source: Los Angeles Times, "GlaxoSmithKline settles drug-marketing case for $3 billion," William D'Urso, July 2, 2012