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For Immediate Release

July 3, 2012

Idaho to receive $1.6 million from Medicaid settlement

(Boise) – Idaho will receive more than $1.6 million from a legal settlement with GlaxoSmithKline, Attorney General Lawrence Wasden said today.  The $3 billion agreement, announced by federal officials Monday, is believed to be the largest healthcare fraud settlement in U.S. history.  The settlement resolves allegations that Glaxo engaged in illegal schemes related to the marketing and pricing of drugs it manufactures.

Glaxo agreed to pay 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. The Idaho settlement was entered into by Attorney General Wasden’s Medicaid Fraud Control Unit and the Idaho Department of Health and Welfare.  Idaho’s share of the settlement is $1,610,426.76.  $732,750 in restitution will be returned to the Idaho Medicaid program, and $877,679 in additional recoveries will be deposited in the state general fund for appropriation by the legislature.

Glaxo’s direct payment to the federal government will include $3,729,826 based on claims to the Idaho Medicaid program.  Idaho Medicaid receives the majority of its funding from the federal government.

In addition, Glaxo agreed to plead guilty to federal criminal charges relating to drug labeling and Food and Drug Administration reporting and will pay a $1 billion criminal fine in connection with those allegations.

The state and federal governments alleged that Glaxo engaged in a pattern of unlawfully marketing certain drugs for uses for which the drugs were not approved by the 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 Glaxo 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, Lamictal, 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.

As part of the settlement, Glaxo has also agreed to plead guilty to criminal charges that it violated the federal Food, Drug, and Cosmetic Act (“FDCA”) in connection with certain activities.  The government alleges that Glaxo introduced Wellbutrin and Paxil into interstate commerce when the drugs were misbranded, meaning containing labels that were not in accordance with their FDA approvals, and that Glaxo failed to report certain clinical data regarding Avandia to the FDA.

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