Glaxo to pay $750 million settlement for defective, unsafe medicines

Oct 28 2010

The New York Times: "GlaxoSmithKline, the British drug giant, has agreed to pay $750 million to settle criminal and civil complaints that the company for years knowingly sold contaminated baby ointment and an ineffective antidepressant — the latest in a growing number of whistle-blower lawsuits that drug makers have settled with multimillion-dollar fines."  The 20 medicines that were produced with "questionable safety" measures included "Avandia, a troubled diabetes drug; Coreg, a heart drug; and Tagamet an acid reflux drug."

"No patients were known to have been sickened, although such cases would be difficult to trace." A wave of new lawsuits, largely unnoticed due to judicial secrecy, "have asserted that drug makers misled patients and defrauded federal and state governments that, through Medicare and Medicaid, pay for much of health care. Using claims from industry insiders, federal prosecutors are not only demanding record fines but are hinting at more severe actions" (Harris and Wilson, 10/26).

The Wall Street Journal: "The suit had been filed on behalf of the U.S. under a federal law designed to encourage people with knowledge of suspected wrongdoing to notify the government. Under the law, such whistleblowers are entitled to a portion of monetary amounts recovered by the government. In this case, [former quality-assurance manager at Glaxo, Cheryl] Eckard stands to receive $96 million from the federal share of the settlement, according to the Justice Department." According to a Department of Justice Official, Glaxo's settlement was "the fourth-largest amount a drug company has ever paid to resolve a government probe." Approximately "$600 million of the settlement amount will go to the federal government and participating states to resolve the civil false-claims allegations" (Loftus and Kamp, 10/27).