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Glaxo Pleads Guilty to Healthcare Fraud, Agrees to $3 Billion Settlement

Filed July 3rd, 2012 Laurie

GlaxoSmithKline has agreed to pay healthcare fraud settlement for promoting a number of its drugs for off-label purposes that were not approved by federal regulators. The company will pay the state of California $46 million.

The British drug maker pleaded guilty to federal charges and agreed to pay a total of $3 billion in the largest healthcare fraud settlement in U.S. History. The company will pay an additional $2 billion to settle allegations in connection with its sales, marketing, and pricing practices on the state and federal level.

California will receive $46 million – the largest sum of the 44 states involved in the settlement.

The government accused GSK of marketing its depression drug Paxil to patients under the age of 18, even though the Food and Drug Administration has not approved the drug for pediatric use. It also marketed Wellbutrin as a weight-loss drug and as a treatment for sexual dysfunction and substance abuse addictions, offering millions of dollars to doctors who were willing to promote the drugs for unapproved uses.

The law allows doctors to prescribe medications for off-label purposes, but drug companies are forbidden from marketing them for unapproved purposes.

GSK was also accused of failing to provide vital safety data to the FDA about its diabetes drug Avandia.

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