GlaxoSmithKline said it reached an agreement in principle to pay $3 billion to settle a number of investigations, including allegations the company improperly marketed Avandia, its blockbuster diabetes drug.
Late News: Glaxo agrees to pay $3 billion to settle several probes
The three investigations cited in a GlaxoSmithKline statement include a sales and marketing investigation by U.S. attorneys in Colorado and Massachusetts and Justice Department investigations into allegations of Medicaid fraud and the development and marketing of Avandia. The final settlement, resolving civil and criminal liabilities, is expected to be made final next year, according to London-based GlaxoSmithKline.
“This is a significant step toward resolving difficult, long-standing matters which do not reflect the company that we are today,” GlaxoSmithKline CEO Andrew Witty said in the statement. “In recent years, we have fundamentally changed our procedures for compliance, marketing and selling in the U.S. to ensure that we operate with high standards of integrity and that we conduct our business openly and transparently.”
The company said it developed a new incentive compensation system that awards sales representatives on the quality of services they provide to healthcare professionals rather than individual sales targets as the basis for bonuses.
The sum would exceed the $2.3 billion that Pfizer agreed to pay in 2009, which the Justice Department had said was the largest-ever healthcare fraud settlement.
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