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Pharma Giant GlaxoSmithKline Fined Record $3 Billion for Healthcare Fraud

HeadlineJul 03, 2012

Pharmaceutical company GlaxoSmithKline has agreed to a $3 billion fine and a guilty plea on criminal charges in what has been described as the biggest case of healthcare fraud in U.S. history. A Justice Department-led probe found the company promoted antidepressants Paxil and Wellbutrin for unapproved uses, including marketing Paxil to children when it was only approved for adults. Prosecutors say GlaxoSmithKline promoted the drugs by distributing a misleading journal article and giving doctors perks that amounted to illegal kickbacks. Prosecutors also contend the company failed to give the U.S. Food and Drug Administration safety data about the diabetes drug Avandia, which has been linked to heart risks. Deputy Attorney General James Cole unveiled the settlement on Monday.

James Cole: “This action constitutes the largest healthcare fraud settlement in United States history. We are determined to stop practices that jeopardize patients’ health, harm taxpayers and violate the public trust.”

Consumer advocacy group Public Citizen said the $3 billion settlement does not go far enough because the fines “pale in comparison” to the drug company’s profits. In a statement, Public Citizen said: “Until more meaningful penalties and the prospect of jail time for company heads responsible for such activity become commonplace, companies will continue defrauding the government and putting patients’ lives in danger.”

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