Glaxo to Pay $105 Million to Settle Promotion Claims

GlaxoSmithKline Plc (GSK), the U.K.’s largest drugmaker, will pay $105 million to settle claims by California, New York and more than 40 other states that it illegally promoted asthma and antidepressant drugs.

The accord announced today prohibits Glaxo from providing incentive payments to salespeople that encourage uses of the drugs not indicated on their labels, and from using paid doctors to promote its products. The agreement covers the asthma drug Advair and two antidepressants, Paxil and Wellbutrin.

California’s portion of the settlement, the largest of any state, is $7.1 million, Kamala Harris, the state’s attorney general, said in a statement. Legal documents describing the agreement will be filed today in state court in San Diego, according to Harris.

Glaxo said on May 27 that it faces a criminal probe in the U.K. following allegations in China that its employees bribed doctors, hospitals and medical associations to boost sales. Accusations of wrongdoing by company employees also have surfaced in Iraq, Poland, Jordan and Lebanon. The U.S. Justice Department began looking in 2010 into whether Glaxo and other drugmakers violated a federal law against bribing officials in foreign countries.

Photographer: Justin Sullivan/Getty Images

California’s portion of the settlement, the largest of any state, is $7.1 million, Kamala Harris, the state’s attorney general, said in a statement. Close

California’s portion of the settlement, the largest of any state, is $7.1 million,... Read More

Close
Open
Photographer: Justin Sullivan/Getty Images

California’s portion of the settlement, the largest of any state, is $7.1 million, Kamala Harris, the state’s attorney general, said in a statement.

Antidepressant Uses

The $105 million settlement is a fraction of what Glaxo has paid over the years to resolve claims it illegally marketed Paxil and Wellbutrin. In 2012, the drugmaker pleaded guilty and paid $3 billion to resolve criminal and civil allegations that it pushed the sale of the antidepressant drugs for unapproved uses and failed to properly turn over clinical data on its Avandia diabetes drug.

Under U.S. law, a doctor can prescribe a medicine for any condition, as long as the drug is approved by the U.S. Food and Drug Administration as safe and effective. Drug companies, however, aren’t allowed to promote a drug for uses other than those approved by FDA regulators.

Glaxo also was forced to pay out more than $1 billion to settle lawsuits claiming company officials hid that Paxil could cause birth defects.

Glaxo didn’t admit to any wrongdoing in today’s settlement with the state attorneys general, Mary Ann Rhyne, a company spokeswoman, said in an e-mailed statement.

Glaxo, based in London, violated California consumer-protection laws by misrepresenting the uses and qualities of certain drugs, according to Harris.

Deceptive Claims

Under the accord, Glaxo officials agreed not to provide any marketing materials that make “false, misleading or deceptive claims” about any of the company’s products, Texas Attorney General Greg Abbott said in an e-mailed statement. Texas stands to get $6.2 million under the deal.

Glaxo also is required to reduce financial incentives to its sales force to engage in off-label marketing until at least March 2019, Abbott added.

Pennsylvania and New Jersey, who are also part of the settlement, stand to receive $4.1 million and $2.45 million, respectively, as part of the deal, according to state officials.

“Today’s settlement hopefully will result in a sea change of how pharmaceuticals are promoted and marketed to consumers,” Pennsylvania Attorney General Kathleen Kane said in an e-mailed statement.

Other states participating in the settlement include Alabama, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, Wisconsin and Wyoming. The District of Columbia also took part.

To contact the reporters on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net; Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Joe Schneider, Peter Blumberg

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.