K&M Represents Whistleblowers in $3 Billion False Claims Act Settlement with GlaxoSmithKline
Philadelphia, July 2, 2012 – GlaxoSmithKline (“GSK”) has agreed to plead guilty to criminal conduct, and to pay $3 billion in criminal and civil fines, penalties and damages to settle allegations that the company defrauded Medicare, Medicaid and other government funded health care programs in connection with its market practices for Advair, Wellbutrin, Paxil, Lamictal, Zofran, Imitrex, Lotronex, Flovent and Valtrex and Avandia. The settlement is the largest qui tam settlement in U.S. history.
Brian Kenney, Tavy Deming and Emily Lambert of Kenney & McCafferty, P.C., a nationwide firm specializing in representing whistleblowers, represented Gregory Thorpe and Blair Hamrick, who were the first whistleblowers to file a qui tam action against GSK arising from this marketing misconduct nearly a decade ago. As part of the record setting settlement, GSK agreed to pay $1.017 billion to settle civil claims brought by Thorpe and Hamrick under the False Claims Act. GSK agreed to pay an additional $757 million to resolve criminal allegations stemming from the activity alleged by Thorpe and Hamrick. As a result of their efforts in coming forward with this information as well as their assistance throughout the government’s investigation, Thorpe and Hamrick are entitled to receive a percentage of the government’s civil recovery.
Thorpe’s and Hamrick’s action was among the very first qui tam suits filed against a pharmaceutical company involving allegations of off-label promotion. According to Kenney & McCafferty’s founding attorney, Brian Kenney, “Thorpe and Hamrick were relators of the highest caliber. They worked for GSK for a combined thirty years and were therefore uniquely positioned to provide the government with extensive, highly detailed documentation and eyewitness evidence of GSK’s schemes. Our clients produced thousands of pages of key insider GSK evidence to the government in the course of this investigation.”
To read the complaint filed on behalf of Thorpe and Hamrick, click here. Exhibits accompanying the complaint may be found here. Additionally, Thorpe’s internal report to compliance executives at GSK may be found within the Exhibits at 0000015-0000027.
Of the $1.17 billion, GSK paid $686 million to resolve claims that the company promoted Advair for mild asthma, when the drug’s FDA-approved asthma use is limited to moderate and severe forms of asthma. GSK’s mild asthma campaign reaped huge financial dividends, catapulting the drug into the top five highest revenue-generating drugs in the world for several years running. In 2010 alone, Advair’s U.S. sales totaled $4.7 billion. GSK commenced the Advair-for-mild-asthma scheme at its launch in 2001, but the hidden dangers of GSK’s campaign were first publicized with the release of GSK’s SMART study clinical data in 2003. According to Ms. Deming, “the SMART study revealed that salmeterol – an active ingredient in Advair – actually increased the risk of asthma-related death and other breathing problems. In response to the SMART study and subsequent additional negative clinical trial data, the FDA, in 2006, mandated a series of revisions to the Advair label, including the addition of a black box warning cautioning of the dangers associated with Advair use in patients with mild asthma. Notwithstanding the results of GSK’s SMART clinical trial data in 2003, and the FDA’s inclusion of the black box warning, GSK’s marketing efforts continued unabated into 2010.”
Thorpe and Hamrick also claimed that GSK aggressively promoted the off label prescribing of Wellbutrin. Indicated solely for the treatment of Major Depressive Disorder in adults, GSK marketed Wellbutrin for use in pediatric psychological disorders, weight loss, ADHD, sexual dysfunction, bipolar disease and addictions, including smoking cessation, and for the treatment of depression in pregnant women. Sales representatives routinely pitched the drug as the “happy, horny skinny drug,” to doctors, concisely encapsulating GSK’s off-label Wellbutrin marketing campaign.
Thorpe and Hamrick also alleged that GSK and its predecessor company, SmithKline Beecham (“SKB”) promoted Paxil as a safe and effective treatment for pediatric use, including depression, ADHD, and bipolar disorder, although the FDA never approved the drug for any use in pediatrics whatsoever. Ms. Deming added, “off-label marketing of Paxil was particularly contemptible because, by the time the campaign was in full swing, SKB and GSK knew from their own clinical study data that Paxil, when used to treat children suffering from depression, actually increased the risk of suicide and other self-harming conduct. GSK concealed the truth from the public to maintain profits, placing children’s lives in jeopardy.”
As early as 2001, Thorpe and Hamrick attempted to bring an end to GSK’s marketing practices as early as 2001, but rather than heed these warnings, GSK retaliated against Thorpe and Hamrick, and ultimately forced them both out of the company. Lambert commented, “Our clients, in particular Thorpe, lodged highly detailed reports of specific instances of improper marketing practices all the way up GSK’s chain of command to the most senior of GSK executive management. These complaints sparked an HR investigation that corroborated our client’s claims, yet instead of being commended for trying to halt the company’s practices, Thorpe was forced out of the company after 23 years of service.”
The federal investigation into GSK’s marketing practices was conducted through a collaborative effort of the Department of Justice, U.S. Attorney's Offices for the District of Massachusetts and the District of Colorado. Massachusetts Assistant Attorney General Bob Patten led the investigation on behalf of the states and the National Association of Medicaid Fraud Control Units ("NAMFCU").
United States ex rel. Thorpe, et al. v. GSK, et al. Civ. No.: 11-10398 (D.Mass)
To read the Complaint-in-Intervention filed by the United States, click here.
To read the Settlement Agreement, click here.
About Kenney & McCafferty, PC
Kenney & McCafferty, PC is the one of the most successful national law firms that specializes in representing qui tam, tax and SEC whistleblowers. Qui tam lawsuits brought by Kenney & McCafferty have recovered in excess of $6 billion in civil and criminal fines and penalties for federal and state governments, resulting in the payment of hundreds of millions of dollars in whistleblower rewards.