British drug maker GlaxoSmithKline didn’t have much to cheer about this week with its guilty plea to criminal charges of illegally marketing drugs and withholding safety data from U.S. regulators.
The company agreed to pay a record $3 billion in what is now the largest health-care fraud settlement in U.S. history.
But Glaxo didn’t have to endure a lot of gloating from U.S. Attorney General Eric Holder, whose Justice Department extracted the record settlement.
Just as his staff was settling the record-breaking fraud case, Holder became the first Attorney General in U.S. history to be held in contempt of Congress.
Holder was taken to task by a congressional committee for withholding documents relating to a botched gun trafficking operation known as “Fast and Furious.’’
On Monday, Holder said the contempt charge was a sham, claiming Republicans have made him a “proxy” for President Obama as the election year heats up.
As The Washington Post reported, Holder said the congressional panel was seeking “retribution against the Justice Department for its policies on a host of issues, including immigration, voting rights and gay marriage. He said the chairman of the committee leading the inquiry, Rep. Darrell Issa (R-Calif.), is engaging in political theater as the Justice Department tries to focus on public safety.’’
Whatever the views on those hot-button issues, there’s plenty of evidence to suggest that Holder’s Justice Department has been consistently aggressive in pursuing cases against Big Pharma.
“In 2009, Pfizer Inc. agreed to pay $2.3 billion to settle a federal investigation into whether it promoted the painkiller Bextra off-label,’’ the Wall Street Journal reported. Eli Lilly & Co. agreed to pay $1.4 billion to settle similar charges involving its antipsychotic medicine Zyprexa.’’
And this week’s Glaxo settlement, which still needs judicial approval, was the company’s fourth settlement in the past few years.
Glaxo officials said “we have learned from the mistakes that were made."
The settlement amounts to another victory for health-care consumers after last week’s U.S. Supreme Court decision upholding the Obama administration’s landmark health-care reform act.
The Glaxo settlement imposes criminal and civil penalties for the drug company’s marketing of about 10 drugs. Those include promoting off-label use of antidepressants Paxil and Wellbutrin for weight loss, sexual dysfunction and a number of other uses which federal regulators did not approve.
Drug company representatives sometimes reportedly promoted Wellbutrin as the “happy, horny, skinny pill” to doctors to remind them of its off-label uses.
Doctors were given “free spa treatments, Colorado ski trips, pheasant-hunting jaunts to Europe and Madonna concert tickets, Justice Department officials said.”
In the Glaxo case, a significant portion of the Justice Department case was based on findings originally brought to light by employee whistleblowers in 2003. Those employees will share in the settlement proceeds.
Justice Department officials also maintained that the company induced taxpayer-funded health programs, including Medicaid, to overpay for Glaxo drugs. The drug company agreed to pay $2 billion to settle civil claims arising from its behavior without admitting to wrongdoing.
Despite the pounding on Capitol Hill, Holder’s Justice Department scored an important victory for which it’s received scant credit.
Lori Stahl covers politics and culture from Texas. Follow her on Twitter @LoriStahl.