GSK pays $3b in criminal and civil settlement

 

GlaxoSmithKline (GSK) has agreed to pay $3 billion to settle US criminal and civil investigations into whether the company illegally marketed drugs and other matters.

The investigations include a Department of Justice review of the UK company’s controversial diabetes drug Avandia, which has been linked to heart risks.

The settlement follows clampdowns since the late 1990s in the US on unfair pharmaceutical industry practices that may have prioritised sales targets over payer and patient interests, such as marketing drugs for unapproved uses.

Andrew Witty, CEO of GSK, said: “This is a significant step toward resolving difficult, longstanding 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.”

Mr Witty said that the company has put in place a new bonus system for US sales, which no longer focuses on individual sales goals, but is now based on selling competency, customer evaluations and overall performance of the sale representative’s business unit.

Federal prosecutors began investigating GSK in 2004, into whether the company promoted drugs for unapproved indications, and into cases where the company may have potentially influenced doctors.

The inquiry involved nine of the company’s best-selling products from 1997 to 2004, including lung therapy Advair.

Gbola Amusa, an analyst at UBS AG in London, said: “This news essentially draws a line under a 10-year legal saga.”

Both civil and criminal settlements are expected to be finalised in 2012.