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Will there be a email that will go viral? 
Glaxo to Pay $3 Billion in Avandia Settlement By DUFF WILSON
The British drug company GlaxoSmithKline said Thursday that it has agreed to pay $3 billion to settle United States government civil and criminal investigations into its sales practices.
The settlement is the largest yet in a wave of cases brought against pharmaceutical companies for illegal marketing of drugs, passing the previous record of $2.3 billion paid by Pfizer in 2009. In recent years, drug companies have been the major targets of federal fraud investigations that cost Medicare and Medicaid tens of billions of dollars.
The cases against GlaxoSmithKline include illegal marketing of Avandia, a diabetes drug that was severely restricted last year after it was linked to heart risks. Company whistleblowers and federal prosecutors said the company had paid doctors and manipulated medical research to promote the drug.
The company had already set aside money for the settlement, which analysts said would remove legal uncertainty. GlaxoSmithKline stock was up 1.57 percent to $43.95 a share in morning trading.
“This is a significant step toward resolving difficult, long-standing matters which do not reflect the company that we are today,” Andrew Witty, chief executive of GlaxoSmithKline, said in a statement. “In recent years, we have fundamentally changed our procedures for compliance, marketing and selling in the U.S. to ensure that we operate with high standards of integrity and that we conduct our business openly and transparently.”
The statement said that GlaxoSmithKline’s “agreement in principle with the U.S. government” would be finalized next year.
The company had set aside $3.4 billion in January — eliminating its fourth quarter profit — to pay for investigations and product liability cases over Avandia. Glaxo also took a $2.3 billion charge last year to settle civil lawsuits over Avandia.
The company statement said it has made “fundamental changes” to marketing policies in the United States since 2008, including a bonus payment system for sales people using quality measurements rather than sales targets.
In a note to investors, Brian Bourdot, an analyst at the investment bank Barclays Capital, called the settlement an important step for Glaxo, but noted that the company “remains involved in other legal disputes, including alleged violations of the Foreign Corrupt Practices Act.”
“We regard such disputes as an innate risk for large multinational pharmaceutical companies,” he added.
Glaxo’s other cases include a nationwide investigation of the company’s sales and marketing practices for nine drugs from 1997 to 2004, led by the United States attorneys in Colorado and Massachusetts, and a Department of Justice investigation into Medicaid pricing practices.
Other large drug company settlements, aside from Pfizer’s payment over illegal marketing of the painkiller Bextra and other drugs, include Eli Lilly’s payment of $1.4 billion in 2009 over claims it marketed Zyprexa, an antipsychotic drug, for unapproved uses by elderly patients with dementia; and Abbott Laboratories’ announcement last week that it would pay $1.3 billion to settle claims it had illegally marketed the epilepsy drug Depakote.
http://www.nytimes.com/2011/11/04/bu...ef=global-home
Will there be a email that will go viral? Glaxo to Pay $3 Billion in Avandia Settlement By DUFF WILSON
The British drug company GlaxoSmithKline said Thursday that it has agreed to pay $3 billion to settle United States government civil and criminal investigations into its sales practices.
The settlement is the largest yet in a wave of cases brought against pharmaceutical companies for illegal marketing of drugs, passing the previous record of $2.3 billion paid by Pfizer in 2009. In recent years, drug companies have been the major targets of federal fraud investigations that cost Medicare and Medicaid tens of billions of dollars.
The cases against GlaxoSmithKline include illegal marketing of Avandia, a diabetes drug that was severely restricted last year after it was linked to heart risks. Company whistleblowers and federal prosecutors said the company had paid doctors and manipulated medical research to promote the drug.
The company had already set aside money for the settlement, which analysts said would remove legal uncertainty. GlaxoSmithKline stock was up 1.57 percent to $43.95 a share in morning trading.
“This is a significant step toward resolving difficult, long-standing matters which do not reflect the company that we are today,” Andrew Witty, chief executive of GlaxoSmithKline, said in a statement. “In recent years, we have fundamentally changed our procedures for compliance, marketing and selling in the U.S. to ensure that we operate with high standards of integrity and that we conduct our business openly and transparently.”
The statement said that GlaxoSmithKline’s “agreement in principle with the U.S. government” would be finalized next year.
The company had set aside $3.4 billion in January — eliminating its fourth quarter profit — to pay for investigations and product liability cases over Avandia. Glaxo also took a $2.3 billion charge last year to settle civil lawsuits over Avandia.
The company statement said it has made “fundamental changes” to marketing policies in the United States since 2008, including a bonus payment system for sales people using quality measurements rather than sales targets.
In a note to investors, Brian Bourdot, an analyst at the investment bank Barclays Capital, called the settlement an important step for Glaxo, but noted that the company “remains involved in other legal disputes, including alleged violations of the Foreign Corrupt Practices Act.”
“We regard such disputes as an innate risk for large multinational pharmaceutical companies,” he added.
Glaxo’s other cases include a nationwide investigation of the company’s sales and marketing practices for nine drugs from 1997 to 2004, led by the United States attorneys in Colorado and Massachusetts, and a Department of Justice investigation into Medicaid pricing practices.
Other large drug company settlements, aside from Pfizer’s payment over illegal marketing of the painkiller Bextra and other drugs, include Eli Lilly’s payment of $1.4 billion in 2009 over claims it marketed Zyprexa, an antipsychotic drug, for unapproved uses by elderly patients with dementia; and Abbott Laboratories’ announcement last week that it would pay $1.3 billion to settle claims it had illegally marketed the epilepsy drug Depakote.
http://www.nytimes.com/2011/11/04/bu...ef=global-home
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