Avandia

GlaxoSmithKline Agrees to Pay $3 Billion in Fraud Settlement

In the largest settlement involving a pharmaceutical company, the British drugmaker GlaxoSmithKline agreed to plead guilty to criminal charges and pay $3 billion in fines for promoting its best-selling antidepressants for unapproved uses and failing to report safety data about a top diabetes drug, federal prosecutors announced Monday. The agreement also includes civil penalties for improper marketing of a half-dozen other drugs.

The fine against GlaxoSmithKline over Paxil, Wellbutrin, Avandia and the other drugs makes this year a record for money recovered by the federal government under its so-called whistle-blower law, according to a group that tracks such numbers.

In May, Abbott Laboratories settled for $1.6 billion over its marketing of the antiseizure drug Depakote. And an agreement with Johnson & Johnson that could result in a fine of as much as $2 billion is said to be imminent over its off-label promotion of an antipsychotic drug, Risperdal.

No individuals have been charged in any of the cases. Even so, the Justice Department contends the prosecutions are well worth the effort — reaping more than $15 in recoveries for every $1 it spends, by one estimate.

Glaxo Settles Cases With US for $3 Billion

The British drug company GlaxoSmithKline said Thursday that it had agreed to pay $3 billion to settle United States government civil and criminal investigations into its sales practices for numerous drugs.

The settlement would be the largest yet in a wave of federal cases against pharmaceutical companies accused of illegal marketing, surpassing the previous record of $2.3 billion paid by Pfizer in 2009. In recent years, drug companies have been prime targets of federal fraud investigations, which have recovered tens of billions of dollars for Medicaid and Medicare.

The cases against GlaxoSmithKline include illegal marketing of Avandia, a diabetes drug that was severely restricted last year after it was linked to heart risks. Federal prosecutors said the company had paid doctors and manipulated medical research to promote the drug.

Glaxo To Take $2.4 Billion Hit Over Avandia Cases

Even for a flush drugmaker like GlaxoSmithKline, $2.4 billion dollars is a lot of money to wipe off the books in a single quarter.

Bottles of Avandia diabetes pills are seen at Jack’s Pharmacy on May 21, 2007, in San Anselmo, Calif.
Justin Sullivan/Getty Images
Yet, just hours after a panel of U.S. experts voted in favor of keeping Glaxo’s diabetes pill Avandia on the market, despite known heart risks, that’s what the drugmaker said it would do in its second quarter.

All that money wil go to cover the cost of a bunch of legal problems, including the settlement of lawsuits over harm allegedly linked to Avandia.

The company said “the substantial majority of the product liability cases relating to Avandia have now been settled.” Glaxo hasn’t disclosed how much money that involves. But Bloomberg reported the company has already agreed to pay about $460 million to put those cases to rest.

It could have been worse. Before the meeting of experts advising the Food and Drug Administration on Avandia concluded Tuesday, some analysts figured the Avandia costs could run as high as $6 billion, Reuters reported.

Avandia Side Effects May Have Hurt or Killed 100,000 People

A draft study by an FDA scientist has linked side effects of Avandia to tens of thousands of heart problems among elderly users, and suggests that more than 100,000 Americans may have suffered heart attacks, strokes or other problems from Avandia since the drug was introduced.

The draft Avandia study (pdf) was performed by drug safety reviewers from FDA and the Centers for Medicare and Medicaid Services (CMS). According to a story by Pharmalot, a drug reviewer at the FDA is pushing for the study to be published in a medical journal in the near future, while the FDA is continuing its own analysis of the safety of GlaxoSmithKline’s diabetes drug.

The researchers performed an observational study looking at data from more than 227,000 Avandia users over the age of 65 and compared those with users of the competing diabetes drug Actos, by Takeda Pharmaceuticals. They found that in that age group, Avandia increased the risk of stroke by 27%, the risk of heart failure by 25%, and the risk of death by 13%. Overall, the researchers estimated that 48,000 elderly users experienced an event attributable to Avandia side effects.

How Does the Avandia Settlement & TIDE Trial Affect Me?

If you’ve read the news lately, you may have heard that GlaxoSmithKline agreed to settle approximately 700 Avandia lawsuits for a reported $60 million. You may also have heard the calls to end the Avandia safety trial known as the TIDE trial. This may have you concerned about how these developments affect you, and rightfully so.

GlaxoSmithKline has reportedly agreed to settle 700 lawsuits for approximately $60 million. How this settlement affects you depends on where you are in the lawsuit process, if you are involved at all.

Obviously, if you’re one of the 700 lawsuits that have been settled, then your lawsuit is now done; you’ll receive your share of the settlement and no longer have to worry about the litigation.

If you are one of the remaining lawsuits (reported to number in the thousands), how this settlement affects you is less clear. Details about the settlement have been kept quiet. Based on how big businesses operate, my guess (this is just speculation here) is that GlaxoSmithKline has not admitted to any wrongdoing (something most businesses attach to their settlements). The settlement, however, shows that the drug maker is willing to sit down with plaintiff’s lawyers to negotiate, which could be a good thing for the remaining lawsuits.

* Word-Use Disclaimer

Legal funding is not a loan. It is the non-recourse purchase of an equitable lien in a plaintiffs’ legal claim. Words such as ‘loans,’ ‘lender,’ 'interest', ‘borrower,’ and phrases such as 'lawsuit loans' and 'settlement loans' are used for relatability, search, and marketing purposes only.
More info

TriMark Legal Funding LLC
1056 Green Acres Rd #102
Eugene, OR 97408