GSK agrees $3bn fine
GlaxoSmithKline today agreed to one of the largest fines ever levied on a pharmaceuticals firm to settle a trio of long-running disputes with the US government.
The UK drugs giant will pay $3bn (€2.18bn) to end three separate legal cases that stretch back to 1997 and relate to the sales and marketing of nine drugs.
The actions related to the sales and marketing of anti-depressants Paxil and Wellbutrin, the Medicaid Rebate Program, and the Department of Justice’s investigation into the development and marketing of diabetes drug Avandia.
GlaxoSmithKline said it had already made provisions for the fine in its accounts, but would now have to pay the cash costs.
The Brentford-based firm set aside $4bn in its last financial year to cover long-standing legal claims, including many relating to its controversial diabetes drug Avandia, which was taken off the market in Europe following allegations it caused an increased risk of heart attack.
Chief executive Andrew Witty said: “This is a significant step toward resolving difficult, long-standing matters which do not reflect the company that we are today.
“In recent years, we have fundamentally changed our procedures for compliance, marketing and selling in the US to ensure that we operate with high standards of integrity and that we conduct our business openly and transparently.”
Glaxo added that since 2008, its US sales team was paid on an assessment of how effective treatments were rather than the number of prescriptions written.
Shares rose by 0.5% as analysts said the payment cleared up some of the uncertainty surrounding its US litigation, especially as the firm did not expect to have to pay any additional monies in the final settlement.
