Connecticut Joins Federal-State Settlement With GlaxoSmithKline
To Resolve Drug Marketing and Pricing Claims
State to Receive $11.1 million From Largest Healthcare Fraud Settlement in U.S. History
Attorney General George Jepsen announced today that Connecticut is among the states, along with the federal government, which have reached an agreement in principle with GlaxoSmithKline (GSK) for the largest healthcare fraud settlement in U.S. history.
Under the terms of the settlement, GlaxoSmithKline has agreed to pay $3 billion to resolve allegations that the company engaged in various illegal schemes related to the marketing and pricing of drugs it manufactures, among them the depression-treatment drugs Paxil and Wellbutrin and a diabetes drug, Avandia.
As part of the settlement, GSK will pay to the states and the federal government a total of $2 billion in damages and civil penalties to compensate various federal healthcare programs, including Medicaid, for harm allegedly suffered as a result of the illegal conduct.
Connecticut’s will receive an estimated $11.1 million, of which the net state share is $5.7 million, in recoveries from GSK.
“This settlement is important to consumers because it will shut down a practice by one of the largest drug manufacturers of marketing drugs for uses not approved by the federal Food and Drug Administration (FDA),” said Attorney General George Jepsen. “Stopping those marketing and pricing practices will benefit consumers and help Connecticut save money on what it spends for prescription drugs through state programs.”
Chief State’s Attorney Kevin T. Kane expressed his appreciation to the Medicaid Fraud Control Unit in the Office of the Chief State’s Attorney, the Office of the Attorney General and the Department of Social Services for their continued collaboration to protect taxpayer resources through the investigation and prosecution of fraud in public programs.
In addition, GSK has agreed to plead guilty to federal criminal charges relating to drug labeling and FDA reporting and has agreed to pay a $1 billion criminal fine in connection with those allegations.
The state and federal governments alleged that GSK engaged in a pattern of unlawfully marketing certain drugs for uses for which the drugs were not approved by the Food and Drug Administration; making false representations regarding the safety and efficacy 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-funded healthcare programs. Specifically, the government alleged that GSK engaged in the following activities:
• Marketing the depression drug Paxil for off-label uses, such as use by children and adolescents;
• Marketing the depression drug Wellbutrin for off-label uses, such as for weight loss and treatment of sexual dysfunction, and at higher-than-approved dosages;
• Marketing the asthma drug Advair for off-label uses, including first-line use for asthma;
• Marketing the seizure medication Lamictal for off-label uses, including bipolar depression, neuropathic pain, and various other psychiatric conditions;
• Marketing the nausea drug Zofran for off-label uses, including pregnancy-related nausea;
• Making false representations regarding the safety and efficacy of Paxil, Wellbutrin, Advair, Lamictal, Zofran, and the diabetes drug Avandia;
• Offering 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
• Submitting incorrect pricing data for various drugs, thereby underpaying rebates owed to Medicaid and other federal healthcare programs.
As part of the settlement, GSK has also agreed to plead guilty to criminal charges that it violated the federal Food, Drug, and Cosmetic Act (“FDCA”) in connection with certain activities. The government alleges that GSK introduced Wellbutrin and Paxil into interstate commerce when the drugs were misbranded, meaning they bore labels that were not in accordance with their FDA approvals, and that GSK failed to report certain clinical data regarding Avandia to the FDA.