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In the largest healthcare fraud settlement in U.S. history, British drug manufacturer GlaxoSmithKline has agreed to pay the government $3 billion.
The settlement covers about 10 years worth of federal civil and criminal investigations. Glaxo had been accused of improperly marketing a number of drugs, including Wellbutrin, Paxil, Advair and Avandia.
Allegations of Medicaid fraud are also covered by the agreement.
The fraud investigation is the only non-marketing allegation included in the settlement. Medicaid is entitled to lower drug prices--or rebates--which are based on private sector prices. The Justice Department was examining how Glaxo reported those prices, explains Bloomberg. Misreported prices could have cost the government millions.
Three billion dollars may not seem like a large amount for such a long list of problems. But compared to recent healthcare fraud settlements, it is a significant amount.
Pfizer paid $2.3 billion in 2009, while Eli paid $1.4 billion the same year. And Abbott Laboratories only agreed to a $1.3 billion settlement in recent weeks.
Glaxo is also not off the hook for consumer lawsuits and investigations brought by states. Just last year, the company paid $460 million to settle 10,000 Avandia suits. At least 2,000 more suits are pending, as well as investigations in Colorado and South Carolina.
A federal investigation under the Foreign Corrupt Practices Act is also still pending, according to the New York Times.
So even though the healthcare fraud settlement will end a number investigations, it won't end them all. Glaxo will still be on the hook should the states or consumers prove the company took illegal actions.
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