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GlaxoSmithKline fine pales in comparison to profits

"dr wolfe"Today’s announcement of the largest health fraud settlement ever reached between a pharmaceutical company and federal and state governments demonstrates that despite the seemingly large sums, the fines imposed on pharmaceutical companies for dangerous and illegal conduct pale in comparison to the profits generated from such activity. The industry is therefore tacitly encouraged to continue its illegal activity.

In the settlement, GlaxoSmithKline (GSK) has agreed to pay $3 billion to resolve allegations stemming from illegal activity spanning 10 years and involving several of its biggest-selling drugs. The settlement breaks the previous $2.3 billion settlement record set in 2009 by Pfizer and includes the second-highest criminal fine ($1 billion) ever imposed on a pharmaceutical company.

GSK pleaded guilty to illegal off-label promotion of two widely used antidepressants, the blockbuster drug Paxil and Wellbutrin, and concealing critical evidence from the Food and Drug Administration (FDA) relating to the dangerous diabetes drug Avandia. GSK paid doctors to promote Paxil to children and adolescents at lavish resort conferences, despite evidence known to the company that the drug did not benefit, and actually harmed, this population, causing suicidal thoughts. The company also hid critical safety information that revealed Avandia’s deadly cardiovascular risks, which have since led to the drug’s withdrawal in Europe and severe restrictions on its use in this country. False claims about Avandia and criminally withholding safety information about the drug accounted for $899 million of the $3 billion fine. Public Citizen had petitioned the FDA to ban Avandia in 2008.

Today’s settlement of criminal and civil violations is nothing new for GSK. According to a 2010 Public Citizen report, GSK racked up more in fines and settlement payouts to the federal and state governments ($4.5 billion) than any other pharmaceutical company from 1991 through November 1, 2010.

Until more meaningful penalties and the prospect of jail time for company heads who are responsible for such activity become commonplace, companies will continue defrauding the government and putting patients’ lives in danger.

Dr. Sidney Wolfe is the director of Public Citizen’s Health Research Group