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GlaxoSmithKline Pleads Guilty and is Sentenced to Pay One Billion Dollars in Criminal Fine and Forfeiture
July 5, 2012

BOSTON - GlaxoSmithKline LLC (“GSK”) pled guilty and was sentenced in federal court today for (1) illegal promotion of the anti-depressant drug Paxil with false and misleading statements about the safety of the drug for use in children; (2) illegal off-label promotion of the anti-depressant drug Wellbutrin for weight loss, sexual function, and other uses for which it was not approved; and (3) failure to provide clinical data regarding cardiovascular safety of the diabetes drug Avandia to the Food & Drug Administration in its required periodic reports.

The global health care giant GSK was sentenced by U.S. District Court Judge Rya W. Zobel to pay a criminal fine of $956,814,400, and criminal forfeiture in the amount of $43,185,600, for a total amount of $1 billion in connection with the criminal wrongdoing. GSK also agreed to pay restitution to the federal health care programs together with other civil payments to the United States in the amount of an additional $2 billion.

The United States told the Court that this resolution was in the government’s interest because it was about real change at GlaxoSmithKline. In lieu of a term of probation, the parties agreed that GSK would implement and continue certain compliance measures set forth in an addendum to the plea agreement and in the agreement with the Department of Health and Human Services, Office of Inspector General (HHS-OIG). GSK agreed to undertake these compliance measures to ensure better behavior by its sales force, and to ensure full, fair and accurate reporting of scientific data from GSK studies. Those measures include, among others:

  • Abolishment of incentive sales compensation; instead, the sales force will be compensated based on business acumen, customer engagement, and scientific knowledge of GSK products;
  • Clawback of up to 3 years of annual performance pay (annual bonus and long term incentives) for executives discovered to be involved in significant misconduct;
  • Publication of all GSK human research studies, not just those with positive outcomes for GSK drugs;
  • Publication of final clinical trial protocols to allow outside researchers to meaningfully analyze the results of GSK studies;
  • Removal of commercial influence on the determination of which GSK studies will be conducted; instead, studies will be conducted on scientific merit;
  • Removal of commercial influence on the determination of which GSK studies will be published and when; instead, studies will be published when the study is complete, not to create a buzz around a drug;
  • Annual certifications by the GSK’s Board of Directors that the GSK compliance program is effective, and by GSK’s U.S. President that the compliance measures continue and reportable incidents have been properly reported.

“This case demonstrates our continuing commitment to ensuring that the messages provided by drug manufacturers to physicians and patients are true and accurate and that doctors’ decisions as to what drugs are prescribed to sick patients are based on best medical judgments, not false and misleading claims or bad science,” said Carmen Ortiz, U.S. Attorney for the District of Massachusetts. She added, “with these groundbreaking changes, GSK has committed to putting patients before profits; science before sales. We hope the rest of the pharmaceutical industry follows suit.”

With regard to the specific charges, had the case proceeded to trial, the Government’s evidence would have proven that the following:

Paxil: From April 1998 to August 2003, GSK unlawfully promoted Paxil for treating depression in patients under age 18, even though the FDA has never approved it for pediatric use. The United States alleges that, among other things, GSK participated in preparing, publishing and distributing a misleading medical journal article that misreported that a clinical trial of Paxil demonstrated efficacy in the treatment of depression in patients under age 18, when the study failed to demonstrate efficacy. At the same time, the United States alleges GSK did not make available data from two other studies in which Paxil also failed to demonstrate efficacy in treating depression in patients under 18. The United States further alleges that GSK sponsored dinner programs, lunch programs, spa programs and similar activities to promote the use of Paxil in children and adolescents. GSK paid a speaker to talk to an audience of doctors and paid for the meal or spa treatment for the doctors who attended. Since 2004, Paxil, like other antidepressants, included on its label a “black box warning” stating that antidepressants may increase the risk of suicidal thinking and behavior in short-term studies in patients under age 18. GSK pled guilty to misbranding Paxil in that its labeling was false and misleading regarding the use of Paxil for patients under 18, and was sentenced to pay a criminal fine in the amount of $159,768,000 for its unlawful conduct concerning Paxil.

Wellbutrin: From January 1999 to December 2003, GSK promoted Wellbutrin, approved at that time only for Major Depressive Disorder, for weight loss, the treatment of sexual dysfunction, substance addictions and Attention Deficit Hyperactivity Disorder, among other off-label uses. The United States contends that GSK paid millions of dollars to doctors to speak at and attend meetings, sometimes at lavish resorts, at which the off-label uses of Wellbutrin were routinely promoted and also used sales representatives, sham advisory boards, and supposedly independent Continuing Medical Education (CME) programs to promote Wllbutrin for these unapproved uses. GSK pled guilty to misbranding Wellbutrin in that its labeling did not bear adequate directions for these off-label uses, and was sentenced to pay a criminal fine in the amount of $554,433,600 for its unlawful conduct concerning Wellbutrin.

Avandia: Between 2001 and 2007, GSK failed to include certain safety data about Avandia, a diabetes drug, in its Annual Reports to the FDA that are meant to allow the FDA to determine if a drug continues to be safe for its approved indications and to spot drug safety trends. The missing information included data regarding certain post-marketing studies, as well as data regarding two studies undertaken in response to European regulators’ concerns about the cardiovascular safety of Avandia. Although GSK provided the data to the FDA in other forms, it was not provided as required in the Annual Reports. Since 2007, the FDA has added two black box warnings to the Avandia label to alert physicians about the potential increased risk of (1) congestive heart failure, and (2) myocardial infarction (heart attack). GSK pled guilty to failing to report data to the FDA and was sentenced to pay a criminal fine in the amount of $242,612,800 for its unlawful conduct concerning Avandia.

Ortiz’s Health Care Fraud Team

Over the last three years, prior to this $3 billion resolution with GSK, Ortiz’s health care fraud unit recovered more than $5.5 billion in settlements, judgments, fines, restitution, and forfeiture in health care fraud cases under the False Claims Act and the Food, Drug and Cosmetic Act. The Boston Office leads the nation in successfully prosecuting complex crime in this arena, bringing to bear all of the available law enforcement tools - criminal, civil and administrative - and fully accounting for half of the nation’s $10.2 billion in recoveries during that same time period. This additional $3 billion in criminal fines and civil damages from GSK underscores the talent, dedication, perseverance, and commitment of the career health care fraud prosecutors in Ortiz’s Office.

The prosecution was led by Assistant U.S. Attorneys Sara Bloom and Susan Winkler, together with Patrick Jasperse, a Trial Lawyer with the Consumer Protection Branch of the Civil Division of the Department of Justice. Significant contributions to the criminal case were also made by Assistant U.S. Attorneys Shannon Kelly, Amanda Strachan, and Brian Perez-Dapple of Ortiz’s Health Care Fraud Unit. The related civil settlements were reached by these attorneys and others in the Civil Division. The Corporate Integrity Agreement with HHS-OIG was negotiated by Mary Riordan and Christina McGarvey of the Office of Counsel to the Inspector General.

This matter was investigated by agents from the HHS-OIG; the FDA’s Office of Criminal Investigations; the Defense Criminal Investigative Service of the Department of Defense; the Office of the Inspector General for the Office of Personnel Management; the Department of Veterans Affairs; the Department of Labor; TRICARE Program Integrity; the Office of Inspector General for the U.S. Postal Service, and the FBI.



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