Magana Cathcart & McCarthy

California Receives Lion’s Share in National Settlement with Drug Maker GlaxoSmithKline

GlaxoSmithKline Settlement

Earlier this month, GlaxoSmithKline, one of the world’s largest pharmaceutical companies, agreed to pay $105 million to settle claims that it illegally promoted off-label uses of the antidepressants Paxil and Wellbutrin and the asthma drug Advair. California will receive over $7 million in the case, which is the largest share of the 44-state settlement.

The issue in the case was Glaxo’s practice of providing incentive payments to the company’s salespeople, which encouraged them to promote the drug for off-label uses. Another prohibited practice was the drug maker’s use of paid doctors to promote its products.

It is not uncommon that after a drug hits the market, some new use for the drug is discovered that it was never developed for and therefore never safety-tested or approved for that use by the U.S. Food and Drug Administration (FDA). For instance, many people may recall the drug Bextra from about ten years ago, which was developed and approved to treat chronic pain. However, it was later heavily marketed to treat acute pain, and at dosage levels that went beyond the initial FDA approval. After users of Bextra for acute pain suffered heart attacks, strokes and other serious side effects, the drug was taken off the market entirely in 2005.

In addition to the huge monetary penalty Glaxo must pay, the Complaint and Stipulated Judgment also requires the pharmaceutical giant to reduce incentive payments in the future and make sure that it does not make any promotional claims that are not FDA-approved or that are false or misleading. Key features of the settlement can be gleaned from the press release issued by California Attorney General Kamala Harris on June 4th announcing the settlement.

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