AG Gansler Secures Settlement with GlaxoSmithKline
Pharmaceutical company pays $3.6 million to resolve Medicaid fraud allegations
Baltimore, MD ( Jan. 3, 2013) - Attorney General Douglas F. Gansler announced today that Maryland has entered into a settlement agreement with GlaxoSmithKline LLC (GSK) to resolve allegations that the pharmaceutical company engaged in various illegal schemes related to the marketing and pricing of drugs it manufactures. Under the terms of the settlement, GSK paid $3,620,452 to the Maryland Medicaid program.
"Consumers have the right to expect drug manufacturers are upfront and honest about their products," said Attorney General Gansler. "When a pharmaceutical company engages in marketing outside the scope for which a drug was approved, it unnecessarily drives up prescription costs, which this office will not stand for."
The State alleged that GSK engaged in a pattern of unlawfully marketing certain drugs for uses for which the drugs were not approved by the Food and Drug Administration (FDA); offering kickbacks to medical professionals; and underpaying rebates owed to government programs for various drugs paid for by Medicaid and other federally-funded healthcare programs.
Specifically, the State alleged that GSK engaged in the following activities:
- Marketing the depression drug Paxil for off-label uses, such as use by children and adolescents;
- Marketing the depression drug Wellbutrin for off-label uses, such as for weight loss and treatment of sexual dysfunction, and at higher-than-approved dosages;
- Marketing the asthma drug Advair for off-label uses, including first-line use for asthma;
- Marketing the seizure medication Lamictal for off-label uses, including bipolar depression, neuropathic pain and various other psychiatric conditions;
- Marketing the nausea drug Zofran for off-label uses, including pregnancy-related nausea;
- Making false representations regarding the safety and efficacy of Paxil, Wellbutrin, Advair, Lamictal and Zofran.
- Offering kickbacks, including entertainment, cash, travel and meals, to healthcare professionals encouraging them to promote and prescribe Paxil, Wellbutrin, Advair, Lamictan, Zofran, the migraine drug Imitrex, the irritable bowel syndrome drug Lotronex, the asthma drug Flovent, and the shingles and herpes drug Valtrex; and
- Submitting incorrect pricing data for various drugs, thereby underpaying rebates owed to Medicaid and other federal healthcare programs.
The settlement is related to a $3 billion settlement with the federal government and other states announced in July.
The settlement is based on four qui tam actions brought by private individuals pursuant to state and federal false claims acts and filed in or transferred to the United States District Court for the District of Massachusetts, as well as investigations conducted by the U.S. Attorney's Office for the District of Massachusetts and the Civil Fraud Division of the U.S. Department of Justice.
A team from the National Association of Medicaid Fraud Control Units (NAMFCU) participated in the investigation and analysis of the claims and conducted the settlement negotiations with GSK on behalf of the settling states. Team members included representatives from Massachusetts, California, Colorado, New York, and Ohio. In announcing the settlement, Attorney General Gansler thanked Assistant Attorney General Shelly Marie Martin and Medicaid Fraud Control Unit Chief Auditor Ruth Jarrell for their work on this matter.