Bloomberg News has reported that GlaxoSmithKline has agreed to pay $3 billion to resolve federal investigations into the marketing of some of its drugs, including Type 2 diabetes drug Avandia. The deal with the U.S. Justice Department would account for GlaxoSmithKline’s largest legal settlement to date. The deal is not expected to be finalized until 2012.
According to the New York times, the settlement brings to a close an eight year old investigation into GlaxoSmithKline’s marketing practices of numerous top selling prescription drugs, including Avandia, Paxil and Wellbutrin between 1997 and 2004. The settlement will also resolve an investigation into the development of Avandia. Whistle blowers and federal prosecuters allege that GlaxoSmithKline paid physicians and manipulated medical research to promote Avandia. Additionally, the New York Times reports, the $3 billion will cover a U.S. Justice Department investigation into allegations that GlaxoSmithKline manipulated Medicaid rules to squeeze more money out of the state financed health care system for low-income Americans.
“Although $3 billion is a very big number in terms of drug industry settlements, it’s not a very big number in relation to almost $50 billion in annual revenue for the world’s fourth-largest pharmaceutical company,” Frances H. Miller, a Boston University law professor and health policy expert, said
“Who at Glaxo is going to jail as a part of this settlement? Who in management is being excluded from doing future business with the U.S. government?” asked Patrick Burns, spokesman for Taxpayers Against Fraud, an advocacy group for whistle-blowers, according to the New York Times.