Attorney General's News Release

July 2, 2012

GlaxoSmithKline to pay $3 billion to settle drug marketing and pricing claims-- Missouri to receive more than $31 million --

Jefferson City, Mo. -- Attorney General Chris Koster announced today that Missouri will receive more than $31 million as part of the largest healthcare fraud settlement in U.S. history.

Under the terms of the settlement, GlaxoSmithKline (GSK) has agreed to pay a total of $3 billion to resolve allegations that it engaged in various illegal schemes related to the marketing and pricing of its drugs, including the anti-diabetic drug Avandia, the depression drug Wellbutrin, and the asthma drug Advair. Of the $3 billion, $2 billion constitutes damages and civil penalties for harm suffered as a result of the illegal conduct. The other $1 billion is a criminal fine in connection with GSK’s guilty plea to federal drug labeling and FDA reporting charges. Missouri will receive a total of $31,865,497.89 from GSK for its Medicaid program.

“The Medicaid program relies on the honesty and integrity of all of its providers so it can operate efficiently and fairly,” Koster said. “GSK cost Medicaid tremendous sums through improper pricing and marketing. We are pleased to have recovered the amounts attributable to that conduct.”

The state and federal governments alleged that GSK engaged in a pattern of unlawfully marketing certain drugs for uses that were not approved by the Food and Drug Administration (FDA), making false representations regarding the safety and efficacy of certain drugs, offering kickbacks to medical professionals, and underpaying rebates owed to government programs for various drugs paid for by Medicaid and other federally funded healthcare programs. Specifically, the governments alleged that GSK engaged in the following activities:

• Failing to report certain clinical data regarding Avandia to the FDA.
• Marketing the depression drug Paxil for off-label uses, such as use by children and adolescents;
• Marketing the depression drug Wellbutrin for off-label uses, such as for weight loss and treatment of sexual dysfunction, and at higher-than-approved dosages;
• Marketing the asthma drug Advair for off-label uses, including use for asthma;
• Marketing the seizure medication Lamictal for off-label uses, including bipolar depression, neuropathic pain, and various other psychiatric conditions;
• Marketing the nausea drug Zofran for off-label uses, including pregnancy-related nausea;
• Making false representations regarding the safety and efficacy of Paxil, Wellbutrin, Advair, Lamictal, Zofran, and the diabetes drug Avandia;
• Offering kickbacks, including entertainment, cash, travel, and meals, to healthcare professionals to induce them to promote and prescribe Paxil, Wellbutrin, Advair, Lamictan, Zofran, the migraine drug Imitrex, the irritable bowel syndrome drug Lotronex, the asthma drug Flovent, and the shingles and herpes drug Valtrex; and
• Submitting incorrect pricing data for various drugs, thereby underpaying rebates owed to Medicaid and other federal 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 (“FDCA”) by selling Wellbutrin and Paxil under labels that did not comply with FDA regulations.

Koster said citizens should report suspected Medicaid provider fraud or abuse and neglect to his Medicaid Fraud Hotline toll free at 800-286-3932, by e-mail at attorney.general@ago.mo.gov, by completing a complaint form at the Attorney General’s Medicaid Fraud Website at http://ago.mo.gov/divisions/medicaid-fraud-control-unit-faqs.htm.