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FOR IMMEDIATE RELEASE
July 03, 2012
Medicaid program to receive $8.7 million from huge national drug settlement

GlaxoSmithKline settles drug marketing and pricing claims

OLYMPIA –
Attorney General Rob McKenna today announced Washington state’s share of the largest healthcare fraud settlement in U.S. history.

“Thanks to a Medicaid-fraud fighting partnership between the states and the federal government, Washington will receive $8.9 million from this new settlement with GlaxoSmithKline,” said McKenna. “The recovered money will help fund health care services to the needy and support additional fraud-protection work.”

Under the terms of the settlement, GlaxoSmithKline (GSK) will pay $3 billion to resolve allegations that the company engaged in various illegal drug marketing and pricing schemes.  As part of the settlement, the drug maker will pay to the states and the federal government a total of $2 billion in damages and civil penalties to compensate various healthcare programs, including Medicaid, for harm allegedly suffered as a result of the illegal conduct.  In addition, GSK agreed to plead guilty to federal criminal charges relating to drug labeling and Food and Drug Administration (FDA) reporting, and pay a $1 billion criminal fine. 

The states and federal government alleged that GSK engaged in a pattern of “off-label marketing” –unlawfully promoting drugs for uses not approved by the FDA. GSK is also accused of making false representations regarding the safety and effectiveness of certain drugs; offering kickbacks to medical professionals; and underpaying rebates owed to government programs for various drugs paid for by Medicaid and other federally and state-funded healthcare programs.  The government alleged that GSK:

  • Marketed the depression drug Paxil for off-label uses, such as use by children and adolescents;
  • Marketed the depression drug Wellbutrin for off-label uses, such as for weight loss and treatment of sexual dysfunction, and at higher-than-approved dosages;
  • Marketed the asthma drug Advair for off-label uses, including first-line use for asthma;
  • Marketed the seizure medication Lamictal for off-label uses, including bipolar depression, neuropathic pain, and various other psychiatric conditions;
  • Marketed the nausea drug Zofran for off-label uses, including pregnancy-related nausea;
  • Made false representations regarding the safety and efficacy of Paxil, Wellbutrin, Advair, Lamictal, Zofran, and the diabetes drug Avandia;
  • Offered kickbacks, including entertainment, cash, travel, and meals, to healthcare professionals to induce them to promote and prescribe Paxil, Wellbutrin, Advair, Lamictan, Zofran, the migraine drug Imitrex, the irritable bowel syndrome drug Lotronex, the asthma drug Flovent, and the shingles and herpes drug Valtrex; and
  • Submitted incorrect pricing data for various drugs, and as a result, underpaid rebates owed to Medicaid and other federal healthcare programs. 

As part of the settlement, GSK also agreed to plead guilty to criminal charges that it violated the federal Food, Drug, and Cosmetic Act.  The government alleges that GSK introduced Wellbutrin and Paxil into interstate commerce when the drugs were misbranded, meaning labels that were not in accordance with their FDA approvals, and that GSK failed to report certain clinical data regarding Avandia to the FDA.

The settlement is based on four actions brought by private individuals in United States District Court in Massachusetts, as well as investigations conducted by the U.S. Attorney’s Office for the District of Massachusetts and the Civil Frauds Division of the U.S. Department of Justice.  A National Association of Medicaid Fraud Control Units team participated in the investigation and analysis of the claims and conducted the settlement negotiations on behalf of the settling states.

The total Washington settlement is $17,654,745, half of which is returned to the federal government to cover its share of losses in the state due to the alleged conduct. Settlement amounts for individual states are based on how much was improperly spent in each state as a result of a drug company’s conduct over a specific period of time.

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Media Contact:
Janelle Guthrie, Director of Communications, (360) 586-0725

 

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