Introduction

The British pharmaceutical company GlaxoSmithKline (GSK), agreed on July 2, 2012, to pay $3 billion for a series of violations involving 10 of its medications.

Background

GlaxoSmithKline pleaded guilty to promoting the off-label use of Paxil and Wellbutrin, and, to a lesser extent, the off-label promotion of Advair, Lamictal, Zofran, Imitrex, Lotronex, Flovent, and Valtrex. The company also agreed to pay a fine for failing to report updated safety information for its diabetes drug, Avandia. These violations led to the false submission of claims to different federal healthcare programs. The United States Department of Justice (DoJ) held GSK responsible for these violations under the False Claims Act.

Issue

Should GlaxoSmithKline be held liable under the False Claims Act for the actions described?

Rule

For a company to be liable under the False Claims Act, one of the following needs to be true:

  • Knowingly submit a false claim to the government or cause another to submit a false claim to the government for payment
  • Act improperly to avoid having to pay money to the government
  • Conspire to violate the False Claims Act

Analysis

Under federal law, if a medication is used for any purpose other than its approved indication, and the government is asked for payment, it is considered a false claim. According to the DoJ, GSK allegedly promoted the un-approved use of the above mentioned drugs and encouraged doctors throughout the country to prescribe these medications for off-label usage. This was allegedly done by providing dinner programs, spa programs, and other similar incentives. Further allegations indicate that sham advisory boards were used to promote off-label indications of the mentioned drugs. Doctors, in turn, prescribed the non-covered medications to patients, many of whom were covered by federal healthcare programs. Pharmacies filled the prescriptions and billed the government for reimbursement.

There were no allegations that GSK attempted to avoid having to pay money to the government or that it conspired to violate the False Claims Act. However, GlaxoSmithKline appears to have violated the False Claims Act because it caused another to submit a false claim to the government.

Conclusion

If there is sufficient evidence to prove the allegations, GSK should be found liable for its actions under the False Claims Act.

For more information on this issue, contact the Kulkarni Law Firm.