Glaxo will pay $3bn to settle US fraud case

 
City A.M. Reporter
GLAXOSMITHKLINE has agreed to plead guilty to misdemeanor criminal charges and pay $3bn (£1.bn) to settle the largest case of healthcare fraud in US history.

The settlement includes $1bn in criminal fines and $2bn in civil fines in connection with the sale of the drug company’s Paxil, Wellbutrin and Avandia products, according to filings in federal court yesterday.

The agreement, which still needs court approval, would resolve allegations that the London-listed drugmaker broke US laws in the marketing of several pharmaceuticals.

Deputy US attorney general James Cole said at a news conference in Washington that the settlement “is unprecedented in both size and scope”.

As part of the deal, Glaxo agreed to strict oversight of its sales force by the US government to prevent the use of kickbacks or other prohibited practices. GSK said in a statement it would pay the fines through existing cash resources. The firm announced a $3bn charge in November related to legal claims.

Chief executive Andrew Witty said GSK’s US unit has “fundamentally changed our procedures for compliance, marketing and selling. When necessary, we have removed employees who have engaged in misconduct.”