British drug manufacturer GlaxoSmithKline (NYSE:GSK) has agreed to pay U.S. government $3 billion (2.18 billion euros) to drop charges of illegal marketing of certain drugs and Medicaid fraud, a U.S. health program created to help low income families, writes The Wall Street Journal. The fine will also cover the new charges for Avandia, a drug used to treat diabetes which brought significant revenues to the pharmaceutical giant, but it turned out to pose risks to the heart.
Payment will be made next year from the company’s cash resources. Currently, the company’s legal provisions amounted to 2.9 billion British pounds (3.37 billion euros).
“Paying the fine is a step towards solving the difficult and long-term issues that do not reflect the company we are today. In recent years we have fundamentally changed the marketing and trading procedures in the U.S. to ensure that we operate with high standards of integrity and that we function in an open and transparent way”, said GSK chief executive officer Andrew Witty quoted by San Francisco Chronicle.
Last year, British manufacturer has paid a fine of 750 million dollars to reach an agreement on allegations that it knowingly sold 20 drugs dangerous to health, including a children’s ointment (Bactroban), two antidepressants (Paxil and Wellbutrin) and a medicine for heart disease (Coreg). GSK then issued a statement announcing that it regretted that it had used the plant in Puerto Rico and specified that only drugs produced at that plant have had problems; the plant was closed in 2009.
GSK has paid another fine of 3.1 billion dollars to the U.S. government in 2006 to end a dispute with the Internal Revenue Service (IRS) for unpaid taxes. Many pharmaceutical companies including Pfizer, Lilly & Co., AstraZeneca PLC and Novartis have been investigated in recent years by the U.S. authotities.