Pa., Del., N.J. share in $105 million settlement with GlaxoSmithKline
Pharmaceutical giant GlaxoSmithKline has settled a lawsuit over claims it illegally promoted three of its brand-name prescription drugs.
Delaware, New Jersey and Pennsylvania are among more than 40 states that will share in the $105 million settlement. It comes just two years after GSK agreed to pay $3 billion to resolve charges lodged by the U.S. Department of Justice.
"So what's alleged is that GSK, like other drug companies in the past, has pushed their drugs for uses that are not approved by the FDA," said Rutgers Law School Professor Michael Carrier.
That practice is often called an "off-label use."
"So if the FDA approves a drug for a particular purpose, the drug company is not allowed to go out and say, 'Hey use my drug for a second purpose.' That violates the law," he said.
But Carrier wonders if the legal payouts are actually effective in discouraging illegal marketing practices.
"This happens all the time in the pharmaceutical industry, and there's so much money to be made, and it seems like these fees of millions and millions of dollars are just the cost of doing business," he said.
"It really is not a lot of money when you consider the millions that they make from these blockbuster drugs," he said.
Pennsylvania, Delaware and New Jersey are among 45 states that claimed GSK violated the law as it promoted the asthma drug Advair and antidepressants Paxil and Wellbutrin.
In a written statement, GSK said the "company did not admit to any wrongdoing or liability under the states' laws in this settlement."
The drug company also agreed to change the way it motivates and pays its sales team. Read more about those changes on the GSK website.
"GSK is the first pharmaceutical company to commit to fundamental reforms to our business model in the US and around the world by stopping payments to doctors to speak about our products, stopping payments to doctors to attend medical conferences and cutting the tie linking the pay of our sales representatives who call on prescribers in the US to the number of prescriptions issued," the company statement said.
Roseann Termini, who teaches food and drug law at Widener University School of Law, called the latest GSK settlement "another wake-up call."
"I think the negotiations probably had more teeth when there was not just one state involved, there was many states involved," Termini said.
Termini said the GSK case concerns her because the patient populations who use Paxil and Wellbutrin could be especially vulnerable to off-label marketing.
"This is serious when it's targeted toward those groups," she said.
In past court decisions and debates over alleged deceptive marketing practices, judges consider something called a "reasonable person," she said.
In some cases, Termini said, the court had decided that some consumer groups targeted by advertising are different.
For some weight-loss products, for example, Termini said courts have decided that consumers are "pathetically eager."