Glaxo to pay $105 million in multistate settlement

June 4, 2014

GlaxoSmithKline Plc, the United Kingdom's largest drugmaker, will pay $105 million to settle claims by California, New York, Indiana and more than 40 other states that it illegally promoted asthma and antidepressant drugs.

The accord will prohibit Glaxo from providing incentive payments to salespeople that encourage uses of the drugs not indicated on their labels, and from using paid doctors to promote its products. The agreement announced Wednesday covers the asthma drug Advair and two antidepressants, Paxil and Wellbutrin.

Indiana will receive nearly $2.1 million in the settlement, the attorney general's office disclosed Wednesday.

California’s portion of the settlement, the largest of any state, is $7.1 million, Kamala Harris, the state’s attorney general, said in a statement. Legal documents describing the agreement will be filed Wednesday in state court in San Diego, according to Harris.

Glaxo said about a week ago that it faces a criminal probe in the U.K. following allegations in China that its employees bribed doctors, hospitals and medical associations to boost sales. Accusations of wrongdoing by company employees also have surfaced in Iraq, Poland, Jordan and Lebanon.

The U.S. Justice Department began looking in 2010 into whether Glaxo and other drugmakers violated a federal law against bribing officials in foreign countries.

Antidepressant uses

The $105 million settlement is a fraction of what Glaxo has paid over the years to resolve claims it illegally marketed Paxil and Wellbutrin. In 2012, the drugmaker pleaded guilty and paid $3 billion to resolve criminal and civil allegations that it pushed the sale of the antidepressant drugs for unapproved uses and failed to properly turn over clinical data on its Avandia diabetes drug. Indiana received $6.3 million in that settlement.

Under U.S. law, a doctor can prescribe a medicine for any condition, as long as the drug is approved by the U.S. Food and Drug Administration as safe and effective. Drug companies, however, aren’t allowed to promote a drug for uses other than those approved by FDA regulators.

The company also was forced to pay out more than $1 billion to settle lawsuits claiming Glaxo officials hid that Paxil could cause birth defects.

Glaxo didn’t admit to any wrongdoing as part of Wednesday's $105 million settlement with the state attorneys general, Mary Ann Rhyne, a company spokeswoman, said in an e-mailed statement.

Glaxo, based in London, violated California consumer protection laws by misrepresenting the uses and qualities of certain drugs, according to Harris.

‘Significant penalty’

The settlement requires GlaxoSmithKline to “pay a significant penalty and imposes strong new rules designed to prevent future misrepresentations,” Harris said.

States participating in the settlement include Alabama, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin and Wyoming. The District of Columbia also took part.


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