GlaxoSmithKline Agrees to Pay $750 Million to Settle Whistleblower's Tainted Drugs Lawsuit

by Tony Isaacs

British drug giant GlaxoSmithKline has agreed to pay $750 million to settle criminal and civil complaints as a result of a whistleblower lawsuit that said the company knowingly sold tainted drugs for years, including GlaxoSmithKline mainstay drugs Avandia, Paxil and Tagemet and a contaminated baby ointment.

Altogether, GlaxoSmithKline sold 20 drugs made at a GlaxoSmithKline plant in Cidra, Puerto Rico according to court papers filed in Boston federal court under the U.S. False Claims Act. The whistleblower's lawsuit was originally filed against GlaxoSmithKline in 2004 and alleged that the company submitted false claims to government health programs because drugs manufactured at the plant weren't safe and effective, and thus shouldn't have been covered by government programs.

Cheryl Eckard, the company's quality manager, asserted in her whistleblower suit that she warned Glaxo of the problems but, instead of addressing the problems, the company fired her instead. Among the problems Eckard reported were contaminated products as well as product mix-ups.

GlaxoSmithKline agreed to pay $150 million in criminal fines and $600 million in civil penalties, according to U.S. Attorney Carmen Ortiz. Officials said that the settlement is the largest whistleblower award ever in a health-care fraud case, officials said today.

The big settlement is hardly the first time that GlaxoSmithKline has faced other scandals and bad news about its drugs and its practices. In August of 2004 GlaxoSmithKline became embroiled in scandal when it was revealed that the firm had sponsored studies which used orphans and babies as young as three months old as human guinea pigs in potentially dangerous medical experiments involving HIV medications. The following year, GlaxoSmithKline agreed to pay $150 million to settle Medicare price fraud settlements with 40 states.

In 2005, after Glaxo had denied repeated reports of Paxil causing addiction and severe withdrawal effects, a federal judge ordered the maker to stop all television commercials nationwide that say the drug is not habit-forming and said that the commercials were "misleading and created inaccurate expectations about the ease of withdrawal from the drug".

In 2008 it was revealed that GlaxoSmithKline hid suicide risks associated with the popular antidepressant paroxitene risks for 15 years. According to court documents, GlaxoSmithKline had trial data dating to 1989 that demonstrated that the drug, marketed under the trade names Paxil and Seroxat, had an eight-fold suicide risk increase. GlaxoSmithKline did not alert providers or the public of the increased risk until 2006.

The Associated Press reported in August of last year that GlaxoSmithKline commissioned sales reps to recruit doctor-authors for ghostwritten articles supporting Paxil use. Glaxo even named the program after everyone's favorite friendly ghost and called it the "CASPPER" program.

In January of this year, a study published in the Journal of the American Medical Association found that the Paxil and another GlaxoSmithKline antidepressant, imipramine, do not help patients with mild, moderate and even severe depression much more than an inactive placebo.

In February of this year, a 334 page report was released by the Senate Finance Committee which revealed that GlaxoSmithKline knew that its blockbuster diabetes drug Avandia was linked to tens of thousands of heart attacks but went out of its way to hide the information from the public. It was also revealed this year that 90 percent of the scientists who backed Avandia diabetes drug had financial ties to drug companies. Avandia is now severely restricted in the US and banned outright in Europe.

After years of denial of harm and claims of efficiency, GlaxoSmithKline agreed this year to pay $1 billion of its $2.4 billion legal expense budget to settle hundreds of Paxil lawsuits.

Sources included:

http://www.nytimes.com/2010/10/27/business/27drug.html?_r=1&hp
http://www.guardian.co.uk/world/2004/apr/04/usa.highereducation
http://blogs.newsobserver.com/business/gsk-to-settle-federal-drug-suit-for-750-million
http://www.usatoday.com/money/industries/health/drugs/2005-09-20-glaxo-fraud_x.htm
http://www.naturalnews.com/028233_GlaxoSmithKline_Avandia.html
http:// www.naturalnews.com/029268_financial_ties_Avandia.html