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FOR IMMEDIATE RELEASE
November 02, 2010
Drug maker pays Washington $6M in settlement over impure, watered-down and contaminated drugs

GlaxoSmithKline agrees to resolve case over Paxil and other drugs 

OLYMPIA – Washington State Attorney General Rob McKenna announced today that the state will receive over $6 million from a settlement with international drug manufacturer GlaxoSmithKline (GSK).

The settlement with the federal government and several states resolves allegations of poor manufacturing practices in the GSK facility in Cidra, Puerto Rico. As a result, state and federal health programs paid for drugs in strengths, purity and quality levels below standards set by the U.S. Food and Drug Administration (FDA).

“Strict rules protect government health programs and the taxpayers who fund them,” McKenna said. “Every drug purchased by Medicaid must meet FDA standards. Companies seeking to do business with this program must follow the rules or face the legal and financial consequences.”

About $3 million will be split between the state’s Medicaid program and the general fund. The rest of Washington state’s portion of proceeds will be returned to the federal government to cover its share of Medicaid spending on the drugs for Washingtonians. So far this year, the Washington State Attorney General’s Office has recovered $24.8 million through legal action against drug companies.

The GSK investigation grew out of a false claims action filed in 2004 in U.S. District Court in Massachusetts. A whistleblower alleged that GSK knowingly manufactured, distributed and sold four drugs in violation of FDA standards. In the case of Paxil CR, the controlled-release antidepressant was produced in a way that created split tablets. Patients received tablets with no active ingredient, only the active ingredient layer, and/or tablets with no controlled release mechanism.

In addition, the diabetes medication Avandamet was produced with tablets containing higher or lower amounts of the active ingredient than specified. The anti-nausea drug Kytril was labeled as sterile but some vials contained impurities. And some Bactroban antibiotic ointments and creams were contaminated with microorganisms.

The National Association of Medicaid Fraud Control Units joined the federal government to reach an agreement in principle with the pharmaceutical manufacturer. As a result, GSK will pay the states and the federal government $600 million in civil damages and penalties for Medicaid and other federally-funded health care programs. Proceeds for individual states are determined based on how much was improperly spent on the drugs during the time period in question.

Additionally, GSK subsidiary, SB Pharmaco of Puerto Rico, has agreed to plead guilty to a felony violation of the U.S. Food, Drug, and Cosmetic Act, and has agreed to pay $150 million in criminal fines and forfeitures.


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Contacts:

Janelle Guthrie, AGO Communications Director, (360) 586-0725

 

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