GlaxoSmithKline to Pay $3 Billion Healthcare Fraud Settlement

[Jemima]

"GlaxoSmithKline was socked with $3 billion in fines by US authorities Monday over charges it marketed drugs for unauthorized uses, held back safety data, and cheated the government's Medicaid program.

 

The Justice Department said GSK was fined over misbranding its drugs Paxil and Wellbutrin, and for holding back data while making unbacked claims for its diabetes drug Avandia.

 

GSK pleaded guilty and agreed to the fines in what the department called the largest health care fraud settlement in US history.

 

GSK, one of the world's largest health care and pharmaceuticals companies, admitted to charges that it had promoted antidepressants Paxil and Wellbutrin for uses not approved for by US regulators, including treatment of children and adolescents."

 

Read more here: http://news.yahoo.com/glaxosmithkline-fined-3bn-us-155153887.html

[Barbarannamated]

And NOW will enter into CORPORATE INTEGRITY AGREEMENT that, if like Abbott Labs' CIA, will last for 5 YEARS and be self-enforced:

 

"The five-year CIA requires, among other things, that Abbott's board of directors review the effectiveness of the company's compliance program, that high-level executives certify to compliance, that Abbott maintain standardized risk assessment and mitigation processes, and that the company post on its website information about payments to doctors."

 

http://www.justice.gov/opa/pr/2012/May/12-civ-585.html

 

Fox....henhouse...

[Brandy]

http://www.latimes.c...0,1752316.story

 

GlaxoSmithKline to pay $3 billion healthcare fraud settlement, U.S. says

 

By Tiffany Hsu

10:35 AM PDT, July 2, 2012

 

Pharmaceutical drug maker GlaxoSmithKline will pay $3 billion and plead guilty to federal charges to resolve a slew of criminal and civil issues stemming from its use of kickbacks, mis-branding and other misconduct to market drugs such as Paxil, Wellbutrin and Advair, the U.S. government announced.

 

The agreement is the largest healthcare fraud settlement in history, spanning nearly every state, according to the Justice Department. It’s also the largest payment ever by a drug company.

 

...

 

 

The company will plead guilty to three federal criminal charges, two of them for introducing mis-branded Paxil and Wellbutrin drugs and one for not reporting safety data about the cardiovascular effects of diabetes drug Avandia to the Food and Drug Administration.

 

 

Before you get excited - no jail sentences despite their pleading guilty...

 

(And nothing I can find about how to file a claim for damages from that tiny percentage of their huge profits.)

 

I love this comment that appeared on the latimes website:

 

lankee at 5:35 PM July 02, 2012

 

Anybody go to prison? No, then this whole exercise accomplished what? Salesmen made their money, executives made their money, doctors made their money, patients got hurt, some probably died, and nobody got sent to prison. And they call this justice?

I'm thinking of (scathing) comments to post on the LA Times and other sites. Thought others might want to also.

[alexjuice]

This is weird.

 

... "Glaxo will plead guilty..." how does Glaxo plead anything? Glaxo has no mouth. Glaxo exists as an entity only in the legal sense.

 

Maybe I don't read the paper enough??. I didn't know corporations could be charged in criminal matters.

[BentBuddha]

 

sweet

[Brandy]

Glaxo has no mouth.

 

Its lawyers do lol.

 

And yes, corporations can be sued. Easier said than done, but they do have responsibilities (and rights) surprisingly similar to human beings.

 

There's more information at the Dept. of Justice site linked to in the excerpt I quoted (which in turn contains a LOT of links to court documents from the site - none of which I've read. I'm no lawyer.

 

Re my comments on my previous post - I'm actually not someone who thinks these meds should be banned. This may create controversy (please don't attack me! - please...) but I've known of some cases where psychotropic meds are the lesser of the evils.

 

But I believe there should be full disclosure from the pharmaceutical companies, including what they learn after releasing drugs that are still being marketed, and this information should be given to patients already taking the meds as well as those being newly prescribed.

 

That wasn't and still isn't being done.

 

I'd like to see the legal system put those with such knowledge who didn't inform patients (not even doctors) in prison and throw away the key. And polydrug them, then after 13+ years (my time on paxil), take away all meds in quick succession using the tapering instructions they themselves have issued (and which was only when forced to by law).

 

Three billion bucks is probably a small "slush fund" that's part of doing business to these corporations. And will continue to be in newer "safer" (as they always say) drugs they create in the future...

[alexjuice]

Yeah, $3b is a big fine. Glax has $11b in cash and equivalents though. That's money just sitting on the balance sheet, probably ready to pay a fine.

 

I'm still quite confused as to how a corporation could commit a crime. Bernie Madoff's invested firm was probably organized as a C-corp. Politicking wrist slap, and not a stern one at that. The stock moved a half dollar on the news, still higher than it started the day.

 

Cronyism.

[Brandy]

Yeah, $3b is a big fine.

They won't even miss it.

 

Nothing compared to their profits.

[Barbarannamated]

The drugs estimated profit during this time was $18 billion.

 

They will NOW enter into a Corporate Integrity Agreement which is policed by GSK Board of Directors. Fox...henhouse??

 

If it's similar to Abbott's recent CIA, it is a 5 year agreement. Then back to 'lack of integrity agreement'??

 

Cost of doing business.

[alexjuice]

It's a good model if you're Satan.

 

Step 1. Misrepresent

Step 2. Buy off medical, regulatory and political authorities

Step 3. Take in 10x of profits

Step 4. People get hurt... political authorities 'discover' some crime, prosecute though no one goes to jail.

Step 5. Pay fine of 2x and promise not to misbehave anymore.

Step 6. Politicians declare victory. 'Streets are safe again.'

Step 7. Begin cycle again, this time starting with contributions

 

$3b is nothing when you have 11b sitting in the bank and your businesses are making profits in the billions annually. Though it's still a big fine relative to the charges... GSK has committed way, way worse crimes and coverups, betmylife. I read a synopsis and Texas' case against JNJ seemed way meatier... This is like going after Hitler (I don't want o think up anybody more current) for claiming his laundry room as a home office on his tax return.

[Barbarannamated]

Yep. And the media -incidentally supported by pharma - plays it up so it appears that everyone is doing their jobs and getting the bad guys.

 

And the cycle starts again.

[fefesmom]

for an interesting comment on this situation you can go to blogs.psychcentral.com/mindfulness. It is on the left, the second topic down. FM

[Altostrata]

This is just the US. Maybe other countries will see a good way to get some income, too.

[alexjuice]

I took a look at the finance page too see how this is being interpreted. First, I learned that NY state will receive $126 million from settlement which monies will shifted to help meet expenditures in Medicaid.... So right back to the docs and drug companies.

 

http://finance.yahoo.com/news/ny-state-146-million-glaxo-150828198.html

 

In the bigger picture, this doesn't move the needle much. Finance site thestreet.com runs this headline -- glaxo's 'Massive' Fines Just Cost of Doing Business

 

As a trader, here's what you need to know: How much of a fix will this put Glaxo in, and will it impact the way drug companies do business? But the only way to answer this central question is to put Glaxo's fine into perspective.

 

Too many media outlets don't even attempt it.

 

NBC News, for example, ran a segment calling the fine "massive," but offering no sense of proportion. This makes the $3 billion (a lot to you and me) sounds onerous.

 

The New York Times gave you the perspective you need: "Despite the large amount," The Times wrote, "$3 billion represents only a portion of what Glaxo made on the drugs. Avandia, for example, racked up $10.4 billion in sales, Paxil brought in $11.6 billion, and Wellbutrin sales were $5.9 billion during the years covered by the settlement." Put like that, it is clear: the fine will be rationalized as the cost of doing business and change little.

 

http://www.thestreet.com/story/11605087/1/glaxos-massive-fines-just-cost-of-doing-business.html?puc=yahoo&cm_ven=YAHOO

[Barbarannamated]

It's all a show.

 

With the recent Abbott case, I know the money to pay fines was set aside years before in anticipation of being busted.

[Altostrata]

I believe it was in Ralph Nader's "Unsafe at Any Speed" that the corporate practice of factoring in potential lawsuits as a cost of doing business was revealed.

 

In other words, they predict $x,xxx,xxx in deaths and lawsuits and add that to projected costs.

[Barbarannamated]

I apologize if this Roche news was posted elsewhere; will post separately also.

 

80,000 adverse events and 15,000 deaths overlooked - OOPS.

 

"Regulators visiting a Roche ($RHHBY) facility in the U.K. found a surprise lurking in the company's computer system: 80,000 uninvestigated adverse reaction reports from the U.S. The reports are on a hodgepodge of drugs made by the Swiss company and include more than 15,000 reports of deaths, with some of the notices dating back 5 years."

 

http://www.fiercepharma.com/story/roche-overlooks-80000-adverse-reaction-complaints/2012-06-21

[Barbarannamated]

GSK extends $2.6 billion bid to buy Human Genome Sciences the same week as their $3 billion fraud suit settled. Interesting.

 

http://www.pharmafeed.com/gsk-again-extends-its-2-6-billion-bid-for-hgs

[Barbarannamated]

Linking the different threads on this case.

 

http://survivingantidepressants.org/index.php?/topic/2565-glaxosmithkline-to-pay-3-billion-healthcare-fraud-settlement/page__pid__26035#entry26035

[Altostrata]

Thanks, Barb.