July 2, 2012
Pennsylvania to receive more than $13 million as part of GlaxoSmithKline healthcare fraud settlement
HARRISBURG - Attorney General Linda Kelly today announced that Pennsylvania will receive more than $13 million as part of the largest healthcare fraud settlement in United States history.
Kelly said that GlaxoSmithKline, a British based pharmaceutical company that operates worldwide, has agreed to pay $3 billion to resolve allegations that the company engaged in various illegal schemes related to the marketing and pricing of drugs it manufactures, such as Paxil, Wellbutrin and Avandia.
According to the settlement, the states and federal government allege that GlaxoSmithKline engaged in a pattern of unlawfully marketing certain drugs for uses that were not approved by the Food and Drug Administration (FDA), such as:
Kelly said as part of the settlement GlaxoSmithKline will pay the states and the federal government $2 billion in damages and civil penalties, which will compensate various federal healthcare programs, including Medicaid, for harm allegedly suffered as a result of the illegal conduct. Pennsylvania will receive more than $13 million as part of the settlement.
Additionally, GlaxoSmithKline will pay $1 billion in criminal fines relating to drug labeling and FDA reporting.
As part of the settlement, GlaxoSmithKline also agreed to plead guilty to criminal charges that it violated the federal Food, Drug, and Cosmetic Act following allegations that the drugs Wellbutrin and Paxil were introduced into interstate commerce despite the drugs being misbranded.
Kelly said that the labels of the misbranded drugs were allegedly not in accordance with their FDA approvals. Additionally, GlaxoSmithKline failed to report certain clinical data regarding the drug Avandia to the FDA.
The settlement is based on four qui tam actions brought by private individuals pursuant to state and federal false claims acts and filed in or transferred to the United States District Court for the District of Massachusetts, as well as investigations conducted by the U.S. Attorney's Office for the District of Massachusetts and the Civil Frauds Division of the U.S. Department of Justice.
A team from the National Association of Medicaid Fraud Control Units (NAMFCU) participated in the investigation and analysis of the claims and conducted the settlement negations with GlaxoSmithKline on behalf of the settling states. Team members included representatives from Massachusetts, California, Colorado, New York, and Ohio.
The Commonwealth's case was handled by Chief Deputy Attorney General William Helm of the Attorney General?s Medicaid Fraud Control Section.
Kelly noted that the money Pennsylvania receives in the settlement will go to the Pennsylvania Department of Public Welfare (DPW).
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