In a stunning settlement, GlaxoSmithKline has agreed to a $3 billion fine.
In the largest settlement involving a pharmaceutical company, the British drugmaker GlaxoSmithKline agreed to plead guilty to criminal charges and pay $3 billion in fines for promoting its best-selling antidepressants for unapproved uses and failing to report safety data about a top diabetes drug, federal prosecutors announced Monday. The agreement also includes civil penalties for improper marketing of a half-dozen other drugs.
The fine against GlaxoSmithKline over Paxil, Wellbutrin, Avandia and the other drugs makes this year a record for money recovered by the federal government under its so-called whistle-blower law, according to a group that tracks such numbers.
In May, Abbott Laboratories settled for $1.6 billion over its marketing of the antipsychotic drug Depakote. And an agreement with Johnson & Johnson that could result in a fine of as much as $2 billion is said to be imminent over its off-label promotion of another antipsychotic drug, Risperdal.
No individuals have been charged in any of the cases. Even so, the Justice Department contends the prosecutions are well worth the effort — reaping more than $15 in recoveries for every $1 it spends, by one estimate.
But critics argue that even large fines are not enough to deter drug companies from unlawful behavior. Only when prosecutors single out individual executives for punishment, they say, will practices begin to change.
“What we’re learning is that money doesn’t deter corporate malfeasance,” said Eliot Spitzer, who, as New York’s attorney general, sued GlaxoSmithKline in 2004 over similar accusations involving Paxil. “The only thing that will work in my view is C.E.O.’s and officials being forced to resign and individual culpability being enforced.”
We’ll see if these fines deter future behavior. I can’t imagine that a fine of this size won’t have an impact in the industry.
That said, the laws on disclosure of risks surrounding drugs need to be enforced and people hiding results need to be held accountable.
