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Glaxo Agrees to pay $3 Billion for Pharmaceutical Fraud Regarding Welbutrin, Paxil, and Avandia
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GlaxoSmithKline, the British Pharmaceutical company responsible for making Welbutrin, Paxil, and Avandia, has pleaded guilty to a series of criminal charges and agreed to pay $3 billion in their settlement. The money will go to the U.S. government and to the whistleblowers who defected from Glaxo, and who profit from the settlement according to the whistleblower law (officially “the False Claims Act”).

The charges stem not from the defectiveness of the drugs, except that Glaxo did not report some of the side effects of Avandia on the heart, but on such things as “off label” marketing. This sort of marketing is when drug-companies recommend their product for uses not approved by the FDA. Welbutrin, for instance, had been marketed to treat weight loss and sexual dysfunction, though only approved to treat major depressive disorder. Though doctors are free to prescribe whatever drugs they want for whatever condition, drug companies are not free to promote them for those conditions.

They pleaded guilty to the three misdemeanors, one for misreporting Avandia, and two for wrongly promoting Paxil and Welbutrin. Deputy Attorney General James M. Cole said that this settlement was “unprecedented in size and scope,” and “underscores our robust commitment to protecting the American people from the scourge of health-care fraud.”


Some critics are not so certain if we should be optimistic. Glaxo has made $10.4 billion of Avandia, $11.6 billion on Paxil, and $5.9 billion on Welbutrin. Said Patrick Burns, spokesmen for the whistleblower advocacy group Taxpayers Against Frauds, “A $3 billion settlement for half a dozen drugs over 10 years can be rationalized as a cost of doing business.” He think targeting CEOs for criminal prosecution would be more effective way to bar fraud. After all, these sorts of cases are common: Johnson & Johnson agreed to pay $2 billion for their off-label promotion of the antipsychotic Risperdol, and Pfizer agreed to pay $2.3 billion in 2009 for similar charges.

Andrew Witty, the new CEO of Glaxo, wants to assure us it is otherwise, that they are changing. “On behalf of GSK, I want to express our regret and reiterate that we have learned from the mistakes that were made. 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 organization, and is playing integrity in everything we do.”

Greg Thorpe and Blair Hamrick, the whistle-blowers who had worked in Colorado, were represented by Plymouth lawyers Brian Kenney and Tavy Deming. Two more whistleblowers, from Philadelphia, Thomas Gerahty and Matthew Burke, were represented by Erika A. Kelton.

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