GlaxoSmithKline to Pay $4.4 Million to MaineCare Program in Nation?s Largest Ever Healthcare Fraud Settlement

July 2, 2012

$3 Billion Total to Resolve Drug Marketing and Pricing Claims

AUGUSTA ? Attorney General William J. Schneider announced today that Maine, various other states and the federal government reached an agreement for the largest healthcare fraud settlement in U.S. history. Under the terms of the settlement, GlaxoSmithKline (GSK) has agreed to pay $3 billion to resolve allegations of unlawful promotion of certain prescription drugs, failure to report certain safety data, and false price reporting practices.

GSK will pay to the states and the federal government a total of $2 billion in damages and civil penalties to compensate various federal healthcare programs, including Medicaid, for harm allegedly suffered as a result of the illegal conduct. In addition, GSK has agreed to plead guilty to federal criminal charges relating to drug labeling and FDA reporting and will pay a $1 billion criminal fine in connection with those allegations.

As part of this settlement, Maine will receive a total of $4,402,994.

?This worldwide pharmaceutical heavyweight put the health of patients at risk and imposed enormous costs on Medicaid and taxpayers,? said Attorney General Schneider. ?Today?s outsized multi-billion dollar settlement should alert even the largest corporations that they will be held accountable for healthcare fraud.?

The state and federal governments alleged that GSK engaged in a pattern of unlawfully marketing certain drugs for uses for which the drugs were not approved by the Food and Drug Administration (FDA); making false representations regarding the safety and efficacy of certain drugs; offering kickbacks to medical professionals; and underpaying rebates owed to government programs for various drugs paid for by Medicaid and other federally-funded healthcare programs. Specifically, the government alleged that GSK engaged in the following activities:

? Marketing the depression drug Paxil for off-label uses, such as use by children and adolescents;

? Marketing the depression drug Wellbutrin for off-label uses, such as for weight loss and treatment of sexual dysfunction, and at higher-than-approved dosages;

? Marketing the asthma drug Advair for off-label uses, including first-line use for asthma;

? Marketing the seizure medication Lamictal for off-label uses, including bipolar depression, neuropathic pain, and various other psychiatric conditions;

? Marketing the nausea drug Zofran for off-label uses, including pregnancy-related nausea;

? Making false representations regarding the safety and efficacy of Paxil, Wellbutrin, Advair, Lamictal, Zofran, and the diabetes drug Avandia;

? Offering kickbacks, including entertainment, cash, travel, and meals, to healthcare professionals to induce them to promote and prescribe Paxil, Wellbutrin, Advair, Lamictan, Zofran, the migraine drug Imitrex, the irritable bowel syndrome drug Lotronex, the asthma drug Flovent, and the shingles and herpes drug Valtrex; and

? Submitting incorrect pricing data for various drugs, thereby underpaying rebates owed to Medicaid and other federal healthcare programs.

The settlement is based on four qui tam actions brought by private individuals pursuant to state and federal false claims acts and filed in or transferred to the United States District Court for the District of Massachusetts, as well as investigations conducted by the U.S. Attorney?s Office for the District of Massachusetts and the Civil Frauds Division of the U.S. Department of Justice.

Maine was represented by Assistant Attorney General Michael Miller, Director of the Healthcare Crimes Unit.

The Healthcare Crimes Unit is the Medicaid Fraud Control Unit for the State of Maine charged with investigating and prosecuting financial fraud and other crimes committed by MaineCare providers or their employees, and investigating and prosecuting abuse, neglect or exploitation of elderly and dependent persons that occurs in health care facilities or by health care providers.

To learn more about the Office of the Attorney General Healthcare Crimes Unit, go to: