Historic $3 Billion Settlement Reached With GlaxoSmithKline

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 for uses that were not approved by the Food and Drug Administration, its failure to report certain safety data, and its civil liability for alleged false price reporting practices, the Justice Department announced. GSK also offered kickbacks to medical professionals. The resolution is the largest health care fraud settlement in U.S. history and the largest payment ever by a drug company.

In addition to the criminal and civil resolutions, GSK has executed a five-year Corporate Integrity Agreement (CIA) with OIG. The plea agreement and CIA include novel provisions that require that GSK implement and/or maintain major changes to the way it does business.

The settlement is based on four whistleblower actions brought by private individuals and federal investigations. A National Association of Medicaid Fraud Control Units team combined with several federal agencies to investigate the matter and conduct settlement negotiations with the defendants.

“Our five-year integrity agreement with GlaxoSmithKline requires individual accountability of its board and executives,” Inspector General Daniel R. Levinson said. “For example, company executives may have to forfeit annual bonuses if they or their subordinates engage in significant misconduct, and sales agents are now being paid based on quality of service rather than sales targets.”

The Orlando Business Journal reports that Florida will receive more than $56 million as part of the settlement.

“My office has worked with others to reach the largest healthcare fraud settlement in United States history. I am proud to say that this agreement makes Florida whole for the deceptive practices that misled consumers and defrauded the Medicaid program out of money,” Bondi said in a press release.

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