Thursday, July 5, 2012

Largest Healthcare Fraud Settlement in US History

By Tariq Hafeez

British drug maker GlaxoSmithKline (GSK) has agreed to pay $3 billion US in criminal and civil fines and plead guilty to misdemeanor criminal charges related to the sale and marketing of its antidepressants Paxil and Wellbutrin and the diabetes drug Avandia in the largest health-care fraud settlement in U.S. history.

The case was brought against GSK under the federal government’s whistle-blower law, known as the False Claims Act.  Whistle-blowers get a share of any money received by the federal government.  The case stems from claims made by four employees of GSK, including a former senior marketing development manager for the company and a regional vice president, who informed the government about a range of improper practices from the late 1990s to the mid 2000s. 

The British drug maker admitted, as part of its settlement, that it misbranded antidepressants Paxil and Wellbutrin. It also admitted to marketing them for uses not approved by the FDA including treatment of children for depression and treatment for obesity, addition, ADHD and anxiety. The company also admitted that it failed to inform the FDA that its diabetes drug Avandia might cause heart problems.

GlaxoSmithKline will pay $1 billion in criminal fines and forfeitures and the remaining $2 billion will go to settle state and federal civil allegations regarding false claims that it submitted to the federal health care programs. According to the Michigan Attorney General Bill Schuette, Michigan is in line to get $23.8 million as part of the settlement, as Michigan was among the states that sued GSK.

If you have any questions relating to health care fraud, contact Mark Mandell or Tariq Hafeez at (248) 380-0000.

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