GSK hit with $750m fine

 
Steve Dinneen
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GlaxoSmithKline yesterday agreed to pay $750m (£473m) after pleading guilty to manufacturing and distributing adulterated drugs from a plant in Puerto Rico.

The company admitted in July it had reached an agreement in principle relating to problems at the plant and would pay out to resolve the allegations.

The case centred around the anti-nausea medicine Kytril, skin ointment Bactroban, anti-depressant Paxil CR and diabetes drug Avandamet, which were made at the plant between 2001 and 2005.

Of the $750m, Glaxo will pay $600m to settle allegations that, because the drugs were adulterated, false claims for reimbursement were submitted to government healthcare programs.

SB Pharmco Puerto Rico, the plant where the drugs were manufactured, will plead guilty to releasing adulterated medicines and pay a $150m, including forfeiture of $10m in assets.

The whistleblower who filed a lawsuit under the US False Claims Act will receive about $96m from the federal share of the settlement, the Justice Department said.

A federal judge must approve the plea agreement.

Glaxo expressed regret that its factory did not operate within the necessary standards and practices.

A company spokesman said: “We worked hard to resolve fully the manufacturing issues at the facility prior to its closure in 2009 and we are committed to continuous improvement in our manufacturing processes.”

The company no longer owns the facility.