GSK agreed to plead guilty to three misdemeanor criminal counts, one each related to three drugs and pay USD 3 billion in settlement in US courts, as Chinese authorities demanded, for the second time, that it recall the drug Augmentin which was found to contain plasticizers.
The British drugmaker pleaded guilty to breaking U.S. laws in the development and marketing of pharmaceuticals by aiming Paxil, an antidepressant, to patients under age 18 when it was approved for adults only, and for pushing Wellbutrin, another one of its drugs, for weight loss and treatment of sexual dysfunction, uses it was not approved for, the investigation led by the U.S. Justice Department found.
GSK pleaded guilty to deceiving the public by distributing a misleading medical journal article. Moreover, the company accepted that it had gone to extreme lengths to promote the drugs, providing doctors with meals and spa treatments that amounted to illegal kickbacks, prosecutors said.
In the case of the diabetes drug Avandia, GSK failed to give the U.S. Food and Drug Administration safety data in violation of U.S. law, prosecutors said.
In an earlier ruling, Hong Kong’s Department of Health last month ordered GlaxoSmithKline Limited (GSK) recall from its consumers another UK-made antibiotic for paediatric patients, Augmentin powder and syrup due to the detection of two plasticizers in the product. Now, GSK has been ordered to recall 375mg tablet forms of Augmentin for the same reason.
The plasticisers under scrutiny include DEHP (diethylhexyl phthalate), DIDP (diisodecyl phthalate) and DINP (diisononyl phthalate), according to Hong Kong’s Department of Health. Analyses carried out by Hong Kong’s Government Laboratory found levels of DIDP in samples of Augmentin up to 2.7 parts per million, as well as 1.1ppm of DEHP and 3.5ppm of DINP.
In the US case against GSK prosecutors said that the misconduct beginning in the late 1990s continued for years and, in the case of Avandia’s safety data, through 2007. Guilty pleas in cases of alleged corporate misconduct are exceedingly rare, making GSKagreement especially unusual.
James Cole, the No. 2 official at the U.S. Justice Department called the agreement to settle "unprecedented in both size and scope," describing the action as "historic" and "a clear warning to any company that chooses to break the law."
The GSK settlement which includes $1 billion in criminal fines and $2 billion in civil fines surpasses what had been the largest criminal settlement involving a drugmaker in U.S. history. In 2009, Pfizer Inc agreed to pay $2.3 billion to settle allegations it improperly marketed 13 drugs.
As part of the settlement, GlaxoSmithKline agreed to new restrictions by the U.S. government to prevent the use of kickbacks or other prohibited practices. The inspector general of the U.S. Department of Health and Human Services will oversee the "Corporate Integrity Agreement" for five years.
Almost exactly a year ago GSK agreed to pay nearly $41 million to 37 states and the District of Columbia in an unrelated case about substandard manufacturing processes at a Puerto Rico factory. In 2010, the company took a $2.4 billion charge in connection with Avandia to settle claims from patients.
The case is U.S. v. GlaxoSmithKline LLC, U.S. District Court for the District of Massachusetts, No. 12-cr-10206.