Big Pharma Strikes Again – Glaxo Settles Largest Healthcare Fraud Case in History

By Jason Enzler

Earlier this month, GlaxoSmithKline entered into the largest settlement in healthcare fraud history — a whopping $3 billion — to settle a broad range of criminal and civil charges involving the company’s drugs and marketing practices.  Glaxo’s settlement easily surpasses the previous record for healthcare fraud, Pfizer’s $2.3 billion payout in 2009 to settle criminal and civil charges for improper marketing of its painkiller, Bextra.

According to the Department of Justice, Glaxo agreed to pay roughly $1 billion and plead guilty to settle three criminal charges: two counts for misbranding Paxil and Wellbutrin and one count for failing to report safety data about its diabetes drug Avandia to the FDA.  Glaxo will pay another $2 billion to settle pricing fraud and federal and state False Claims Act allegations relating to several drugs, including Paxil, Wellbutrin, and Avandia.  The landmark settlement is the culmination of a nine-year investigation triggered by four qui tam lawsuits filed by former Glaxo employees turned whistleblowers, two sales reps, a marketing development manager, and a regional vice president.

Much of the conduct involved promoting drugs for uses that were unapproved by the FDA.  For example, Glaxo was marketing Paxil, a powerful anti-depressant, for use by children despite the fact that the drug was not tested or approved for their use.  Likewise, Glaxo was promoting Wellbutrin, another anti-depressant, for all kinds of unapproved uses, ranging from treatment of sexual dysfunction to weight loss.  The company marketed the drug as the “happy, horny, skinny pill.”  Other allegations include Glaxo’s payment of kickbacks to doctors to promote their illegal scheme.  Many of these allegations were brought internally to senior management at Glaxo before lawsuits were ever filed.  As early as 2001, one of the sales rep whistleblowers from the qui tam lawsuits reported the fraud to his supervisors, as far up as the head of compliance for global pharmaceuticals, but the company took no action:

This is not some minor violation of policy, the conduct I have attempt to report could result in severe legal and monetary penalties if left unchecked.  I think that should be very evident and need no further explanation.  I do not want to be the one responsible for a child’s injury or worse because we PAID a physician, who wrote a book on ADHD, to tell others that Wellbutrin SR was a great drug for ADHD.  Nor do I want to be responsible for paying a Nurse Practitioner to tell 200 others that Amerge is a great drug for Pediatric migraine.

And:

We have been told that “public perception” is everything now.  Well just imagine the call I received ten minutes ago from a physicians assistant, not a physician, ordering a 1) 65 minute deep tissue massage a [sic] 2) a 60 minute Colrado cleansing facial 3) a 30 minute foot reflexology and 4) a pedicure and French manicure.  This would be after her “lunch at the Broadmoor” and 30 minute lecture by Brendan Montano, MD who flew in fromConnecticutfor several thousand dollars to talk about weight loss and the benefits of Wellbutrin SR!!!!  I want to promote the benefits of my products, but this sickens even me.

Additional correspondence between the company and one of the whistleblowers is available by clicking here.

This is not the first time Glaxo has made the news for healthcare fraud.  In 2010, Glaxo, settled a different set of charges for $750 million, that time relating to its sale of ineffective and contaminated drugs.  The whistleblower there received almost $100 million for her trouble.  Although there has been no determination how much the four whistleblowers will receive for their efforts, it is safe to bet that they are likely to receive a similar prize.

The Department of Justice’s press release is available by clicking here.

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