JUSTICE DEPARTMENT OFFICIAL COMMENTS ON $3 BILLION GSK SETTLEMENT

FROM:  U.S. DEPARTMENT OF JUSTICE
Acting Assistant Attorney General for the Civil Division Stuart F. Delery Speaks at the GSK Press Conference Washington, D.C. ~ Monday, July 2, 2012
Thank you, Bill, for that introduction.

As Deputy Attorney General Cole mentioned, today’s $3 billion resolution resolves several major investi gations of the company.  Specifically, t he global settlement resolves allegations relating to three major issues:

First, GSK will pay $1.8 billion to resolve criminal and civil liability related to off-label marketing.   This includes $757 million in criminal fines and forfeitures for misbranding the drugs Paxil and Wellbutrin, and $1.043 billion under the False Claims Act to resolve civil allegations regarding off-label promotion and the payment of kickbacks involving these and other drugs.

The second investigation resolved today relates to the diabetes drug Avandia.   GSK will pay a $243 million criminal fine for failing to report required safety data to FDA.   In the related civil settlement, GSK will pay $657 million to resolve allegations about representations it made concerning Avandia’s safety and efficacy.

The third investigation involves allegations of false best prices and the underpaying of rebates owed under the Medicaid Drug Rebate Program. GSK will pay $300 million to resolve civil liability under the False Claims Act related to these allegations.

In a moment, U.S. Attorney Carmen Ortiz will describe the conduct revealed by our investigations.   But today’s resolution is significant not just because GSK’s conduct was egregious or because it is the largest health care fraud settlement in the Department’s history.
 
Health care fraud is an epidemic that touches every aspect of our lives. And yet, for far too long, we have heard that the pharmaceutical industry views these settlements merely as the cost of doing business.   That is why this Administration is committed to using every available tool to defeat health care fraud.

As we did with Abbott Laboratories a few weeks ago, today’s resolution seeks not only to punish wrongdoing and recover taxpayer dollars, but to ensure GSK’s future compliance with the law.  The Corporate Integrity Agreement, which Department of Health and Human Services Inspector General Dan Levinson will describe in a moment, exemplifies best practices in compliance.  Both that agreement and the plea agreement require GSK to maintain certain compliance policies that the company has recently put into effect.

In addition, for the next five years, the plea agreement requires GSK to report to the Department of Justice any probable violations of the Federal Food, Drug, and Cosmetic Act concerning promotional activities and reporting obligations.   And GSK’s U.S. President and Board of Directors must personally certify the company’s compliance with the law every year.
And for every day that one of these reports or certifications is late, or one of these policies is not maintained, GSK agrees to pay the government $20,000 in stipulated damages.

The changes we are requiring of GSK and others may not end health care fraud, but they will go a long way to bringing about much-needed change in the way the pharmaceutical industry conducts business.   And because we know that many companies already play by the rules, these changes will help level the playing field, reduce the incentives to cut corners, and make clear that good compliance is also good business.

I want to echo the Deputy Attorney General’s comments about all of the many public servants in Boston, Colorado and across the country that contributed to this matter.   In particular, I want to recognize the dedicated attorneys, investigators and support staff of the Civil Division – here in Washington – who are the backbone of all of our health care fraud enforcement efforts.

Now, it’s my pleasure to introduce Carmen Ortiz, the U.S. Attorney for the District of Massachusetts.