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PRESS RELEASE
July 2, 2012, 10:42 a.m. EDT
Whistleblowers played major role in Glaxo case, leading to Glaxo's record settlement
WASHINGTON, July 2, 2012 /PRNewswire via COMTEX/ -- Two whistleblowers represented by Phillips & Cohen LLP provided the government with overwhelming evidence that was at the heart of the government's case against GlaxoSmithKline GSK +1.34% and the record-setting settlement announced today.
The whistleblowers - Thomas Gerahty, a former senior marketing development manager for Glaxo, and Matthew Burke, a former regional vice president -- provided invaluable insider information that Glaxo was engaging in corrupt nationwide schemes to push sales of Advair, Wellbutrin, Imitrex and other popular prescription drugs for "off-label" (unapproved) uses, that it used improper financial inducements to market its drugs, and that it misrepresented the safety and efficacy of those drugs. Glaxo's illegal practices caused Medicare, Tricare - the healthcare program for the military -- and Medicaid to incur huge losses.
The civil settlement of Gerahty and Burke's whistleblower case and a separate whistleblower lawsuit filed in Colorado total $1.017 billion out of total settlement. It is the largest civil, False Claims Act (whistleblower) settlement on record. (Two other whistleblower lawsuits that alleged another improper practice concerning Advair marketing settled for $25 million, for a total of $1.042 billion paid under the settlement agreement for the four whistleblower cases.)
Gerahty, Burke and Phillips & Cohen worked closely with the U.S. Attorney's Office in Boston and the Justice Department since they filed their "qui tam" (whistleblower) case in early 2003 in Boston's federal district court.
Gerahty and Burke gave the government new and detailed information about Glaxo's nationwide improper marketing practices, including the use of financial inducements to doctors to prescribe Glaxo's drugs and the promotion of Advair, Wellbutrin, Imitrex, Lamictal, Zofran and Valtrex for off-label, unapproved uses. Unapproved use of prescription drugs can create significant risks to patients, and drug manufacturers are prohibited by federal law from promoting their drugs for unapproved treatments.
As the government investigation progressed, the whistleblowers and their attorneys made a significant difference in particular in the government's case against Glaxo for its off-label marketing of Advair for mild asthma. Gerahty, Burke and Phillips & Cohen devoted substantial effort and time preparing the legal case that helped demonstrate Glaxo improperly marketed Advair as a first-line asthma treatment and for asthma patients previously treated with only a short-acting inhaler.
As a result, Glaxo paid $686 million out of the total settlement to resolve claims involving the off-label marketing of Advair to treat mild asthma - by far the largest amount Glaxo paid to settle any of the civil charges. (See the settlement agreement at www.glaxowhistleblowers.com .)
Kelton and Phillips & Cohen also represented the whistleblower whose qui tam lawsuit against Pfizer alleging the off-label marketing of the prescription painkiller, Bextra, helped the government recover $1.8 billion as part of a record-setting $2.3 billion settlement in 2009.
"The gravity of Glaxo's conduct cannot be overstated," Kelton said. "The company's improper marketing practices extended across a wide range of its prescription drug portfolio. Given what we saw with Glaxo, Pfizer and other pharma companies, it's fair to conclude there has been almost no limit to what pharma companies have done to sell their products."
Read the rest here
More on the massive GSK fine
Here GlaxoSmithKline to pay $3 billion for health fraud.
Here (Reuters) - GlaxoSmithKline Plc has agreed to plead guilty to misdemeanor criminal charges and pay $3 billion to settle the largest case of healthcare fraud in U.S. history.
The settlement includes $1 billion in criminal fines and $2 billion in civil fines in connection with the sale of the drug company's Paxil, Wellbutrin and Avandia products, according to filings in federal court on Monday.
Deputy U.S. Attorney General James Cole said at a news conference in Washington that the settlement "is unprecedented in both size and scope."
Also at Pharmagossip MONDAY, JULY 02, 2012--
GlaxoSmithKline to Plead Guilty and Pay $3 Billion to Resolve Fraud Allegations and Failure to Report Safety Data--
Largest Health Care Fraud Settlement in U.S. History
Global health care giant GlaxoSmithKline LLC (GSK) agreed to plead guilty and to pay $3 billion to resolve its criminal and civil liability arising from the company’s unlawful promotion of certain prescription drugs, its failure to report certain safety data, and its civil liability for alleged false price reporting practices, the Justice Department announced today. The resolution is the largest health care fraud settlement in U.S. history and the largest payment ever by a drug company.
And Pharmalot Biggest Deal Ever: Glaxo Pays $3B For Bad Behavior.
And Seroxat Sufferers Stand Up and Be Counted.
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GSK Press Release: CEO Andrew Witty nearly apologizes, but doesn't--uses word "regret" and read to part that says it is not an admission of liability or wrongdoing regarding the sales of certain drugs listed in the lawsuit settlement:
GlaxoSmithKline concludes previously announced agreement in principle to resolve multiple investigations with US Government and numerous states
"Commenting on the agreement, GlaxoSmithKline CEO Sir Andrew Witty said: “Today brings to resolution difficult, long-standing matters for GSK. Whilst these originate in a different era for the company, they cannot and will not be ignored. On behalf of GSK, I want to express our regret and reiterate that we have learnt from the mistakes that were made.
“We are deeply committed to doing everything we can to live up to and exceed the expectations of those we work with and serve. Since I became CEO, we have had a clear priority to ingrain a culture of putting patients first, acting transparently, respecting people inside and outside the organisation and displaying integrity in everything we do.
“In the US, we have taken action at all levels in the company. We have fundamentally changed our procedures for compliance, marketing and selling. When necessary, we have removed employees who have engaged in misconduct. In the last two years, we have reformed the basis on which we pay our sales representatives and we have enhanced our ability to ‘claw back’ remuneration of our senior management.
“We have a vital role to play in bringing innovative medicines to patients and we understand how important it is that our medicines are appropriately promoted to healthcare professionals and that we adhere to the standards rightly expected by the US Government.”
Under the terms of the settlement, GSK will plead guilty to misdemeanor violations of the Federal Food, Drug, and Cosmetic Act related to certain aspects of the marketing of Paxil for paediatric use and of Wellbutrin for certain uses, and for failure to include information about the initiation or status of certain Avandia studies in Periodic and Annual Reports submitted to FDA.
The civil settlement reached with the Government does not constitute an admission of any liability or wrongdoing in the selling and marketing of Lamictal, Zofran, Imitrex, Lotronex, Flovent, Valtrex, Avandia or Advair products, nor in its nominal pricing practices. "
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