Two whistleblowers represented by Phillips & Cohen provided critical evidence that helped launch massive government investigations into Glaxosmithkline’s marketing practices, and resulted in the record $3 billion settlement yesterday.
Glaxo paid $1.017 billion to settle government charges based on the whistleblowers’ allegations and that of a separate “qui tam” (whistleblower) lawsuit regarding the “off-label” marketing of Advair, Wellbutrin, Imitrex, Lamictal, Zofran and Valtrex.
In addition, the British pharmaceutical company pleaded guilty to criminal charges for off-label marketing of Paxil, Welbutrin, and Advair, false price reporting practices, and failing to disclose the potential health risks of drugs to the FDA. The Department of Justice called the case the largest healthcare fraud settlement in U.S. history.
Phillips & Cohen represented key whistleblowers Thomas Gerahty, Glaxo’s former senior marketing development manager, and former regional vice president Matthew Burke. The information provided by these whistleblowers contributed significantly to the government’s case against Glaxosmithkline for its off-label marketing of Advair as a first-line asthma treatment. The extensive evidence and legal work prepared by Gerahty, Burke and Phillips & Cohen resulted in Glaxo settling the civil charges involving Advair for $686 million.
“The gravity of Glaxo’s conduct cannot be overstated,” said Phillips & Cohen attorney Erika Kelton. “The company’s improper marketing practices extended across a wide range of its prescription drug portfolio. Given what we saw with Glaxo, Pfizer and other pharma companies, it’s fair to conclude there has been almost no limit to what pharma companies have done to sell their products.”
As many news outlets have pointed out, $3 billion represents only a fraction of the amount Glaxo made on these drugs during the years covered by the settlement. But the settlement is thought to be the first to include an agreement by the company to withdraw bonuses from top executives if they engaged in or supervised illegal behavior, according to the Wall Street Journal (subscription required).
“That creates pressure and it creates an element of responsibility,” Kelton told the New York Times. “I think it’s a good step in the right direction.”
The “qui tam” complaint and settlement agreement for Gerahty and Burke’s whistleblower lawsuit are posted on the Phillips & Cohen press release.