Arkansas to get $2 million in Glaxo drug fraud settlement | Arkansas Blog

Monday, July 2, 2012

Arkansas to get $2 million in Glaxo drug fraud settlement

Posted By on Mon, Jul 2, 2012 at 2:07 PM

The pharmaceutical company GlaxoSmithKline has settled a health care fraud case for a record $3 billion.

The company pushed an adults-only antidepressant, Paxil, on patients under 18; promoted Wellbutrin for off-label uses such as weight loss and sexual dysfunction, and failed to provide safety data about a diabetes drug, Avanida, according to the complaint.

GSK targeted the antidepressant Paxil to patients under age 18 when it was approved for adults only, and it pushed the drug Wellbutrin for uses it was not approved for, including weight loss and treatment of sexual dysfunction, according to an investigation led by the U.S. Justice Department. The fraud included a misleading journal article and freebies for doctors that amounted to kickbacks, prosecutors said.

The states were part of the settlement. Arkansas will get $2.065 million for its Medicaid program as a result. Federal matching funds makes the payment worth $7.6 million for Medicaid. More details follow.

ATTORNEY GENERAL NEWS RELEASE

LITTLE ROCK – Attorney General Dustin McDaniel announced today that Arkansas, other states and the federal government have reached an agreement in principle with pharmaceutical company GlaxoSmithKline to resolve allegations that the company engaged in illegal marketing and pricing practices related to certain drugs it manufactures.

Under the terms of the settlement, GSK agreed to pay $2 billion in damages and civil penalties to the federal government and the states. An additional fine of $1 billion will be paid in connection with federal criminal charges related to drug labeling and FDA reporting.

Arkansas’s Medicaid program will receive $2.065 million. With federal matching funds added, $7,654,782.22 will go to Arkansas Medicaid.

“Arkansas taxpayers and beneficiaries of Medicaid should not be shortchanged by companies that choose to put profits over people,” McDaniel said. “I am pleased that the states and federal government have pursued this settlement, and that money will be restored to the Arkansas Medicaid program as a result.”

The state and federal governments alleged that GSK engaged in a pattern of unlawfully marketing certain drugs for uses for which the drugs were not approved by the FDA; made false representations regarding the safety and efficacy of certain drugs; offered kickbacks to medical professionals; and underpaid rebates owed to government programs for various drugs paid for by Medicaid and other federally-funded healthcare programs.

As part of the settlement, GSK has also agreed to plead guilty to criminal charges that it violated the federal Food, Drug, and Cosmetic Act in connection with certain activities.

The settlement was filed in the U.S. District Court of Massachusetts.

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