GlaxoSmithKline reaches $3 billion settlement for fraud

British Prime Minister David Cameron is joined by Site Quality Director Ian Broadgate during a visit to GlaxoSmithKline's plant at Ulverston in Cumbria on March 22, 2012.

David Brancaccio: Part two now of a developing theme of British companies in hot water ahead of America's Independence Day. GlaxoSmithKline, the British drug maker, has agreed to plead guilty and pay $3 billion in criminal and civil penalties in the U.S.

Marketplace's Mitchell Hartman reports.


Mitchell Hartman: The Justice Department says Glaxo engaged in fraudulent marketing of Paxil and Wellbutrin -- both anti-depressants -- and Avandia, a diabetes drug.

Glaxo's sales force treated doctors to spa-and-ski junkets. Meanwhile, it was encouraging them to prescribe the anti-depressants to young people, when those drugs weren't approved for use with non-adults by the FDA.

Bob Goldberg of the Center for Medicine in the Public Interest says doctors prescribe drugs "off-label" all the time.

Bob Goldberg: Individual doctors are perfectly free to use these products as they see fit without the company coming in and making claims beyond what they've submitted to the FDA originally.

In the case of Avandia, Glaxo didn't inform the FDA of crucial safety information. The drug now carries a warning about potential heart risk. The legal settlement must still be approved by a judge.

I'm Mitchell Hartman for Marketplace.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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