By Jesse J. Holland, The Associated Press, in Globe and Mail, July 2, 2012
GlaxoSmithKline LLC will pay $3 billion and plead guilty to promoting two popular drugs for unapproved uses and to failing to disclose important safety information on a third in the largest health care fraud settlement in U.S. history, the Justice Department said Monday.
The $3 billion fine also will be the largest penalty ever paid by a drug company, Deputy Attorney General James M. Cole said. The corporation also agreed to be monitored by government officials for five years to attempt to ensure the company's compliance, Cole said.
“Let me be clear, we will not tolerate health care fraud,” Mr. Cole told a news conference at the Justice Department. He would not say whether any company executives were under investigation. The company's guilty plea and sentence have to be approved by a federal court in Massachusetts.
“For far too long, we have heard that the pharmaceutical industry views these settlements merely as the cost of doing business,” Acting Assistant Attorney General Stuart F. Delery, head of Justice's civil division, said at the news conference. “That is why this administration is committed to using every available tool to defeat health care fraud.”
Mr. Delery added, “Today's resolution seeks not only to punish wrongdoing and recover taxpayer dollars, but to ensure GSK's future compliance with the law.” He noted that a similar recent settlement with Abbott Laboratories also included continuing compliance monitoring.
It is illegal to promote uses for a drug that have not been approved by the Food and Drug Administration — a practice known as off-label marketing.
Prosecutors said GlaxoSmithKline illegally promoted the drug Paxil for treating depression in children from April 1998 to August 2003, even though the FDA never approved it for anyone under age 18. The corporation also promoted the drug Wellbutrin from January 1999 to December 2003 for weight loss, the treatment of sexual dysfunction, substance addictions and attention deficit hyperactivity disorder, although it was only approved for treatment of major depressive disorder.
Justice Department officials also said that between 2001 and 2007 GlaxoSmithKline failed to report to the FDA on safety data from certain post-marketing studies and from two studies of the cardiovascular safety of the diabetes drug Avandia. Since 2007, the FDA has added warnings to the Avandia label to alert doctors about potential increased risk of congestive heart failure and heart attack.
The drug corporation also agreed to resolve civil liability for promoting the drugs Paxil, Wellbutrin, Advair, Lamictal and Zofran for off-label, non-covered uses. The company also resolved accusations that it paid kickbacks to doctors to prescribe those drugs as well as the drugs Imitrex, Lotronex, Flovent and Valtrex.
“GSK's sales force bribed physicians to prescribe GSK products using every imaginable form of high priced entertainment, from Hawaiian vacations to paying doctors millions of dollars to go on speaking tours to a European pheasant hunt to tickets to Madonna concerts, and this is just to name a few,” said Carmin M. Ortiz, U.S. attorney in Massachusetts.
Of the penalties, $1 billion covers criminal fines and forfeitures and $2 billion is for civil settlements with the federal government and the state governments of Massachusetts and Colorado.
While it is uncertain whether even an historic fine of $3 billion will begin to limit the culture of cozy dependency between the pharmaceutical industry and the medical profession, one has to welcome this investigation and decision by the Justice Department.
If only they were as aggressive about the white collar crime on Wall Street that plunged the country, and many parts of the world economy into recession in 2008, that would truly be something to cheer about.
If GlaxoSmithKline considers $3 billion "just the cost of doing business" then there is little wonder about the high cost of prescription drugs. The consumer pays both ways, medically by using drugs for purposes for which they were not approved by the FDA, and financially for the "cost of doing business" as described by the companies in the sector.
Pushing the envelop, through over-aggressive marketing, abuses the relationship between drug company and prospective patient, not to mention the relationship between doctor and drug company. This issue must also be addressed by the medical schools, where there needs to be a course in medical practice that includes the business practices of the pharmaceutical companies, and the doctors' obligation to resist their seductions.
Even if there were a case of this magnitude every month for the next four years, the incestuous relationship between doctors and drug companies would not be eliminated. There would still be doctors willing to accept what are literally "bribes" for using a company's products, considered "part of doing business" by those companies.
Is this another case of "too big to be monitored" and regulated...as is the case with the big banks?