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Office of the Attorney General
Attorney General Conway Announces Kentucky Will Participate in $750 Million Settlement with GlaxoSmithKline for Sale of Tainted Drugs
Attorney General Jack Conway today announced that Kentucky will participate in a settlement with global pharmaceutical manufacturer GlaxoSmithKline (GSK) over allegations that GSK knowingly manufactured, distributed and sold tainted drugs. In order to protect consumers, the Federal Drug Administration establishes strict manufacturing standards to ensure the strength, purity and quality of all drugs that it approves. Drugs which do not meet these strict standards are "adulterated" or tainted drugs and are ineligible for reimbursement by the Medicaid program.
All of the tainted drugs at issue in this settlement were manufactured by GSK’s subsidiary, SB Pharmaco of Puerto Rico. Because of a lack of quality control and other defects in the manufacturing process: (1) Patients prescribed the controlled-release antidepressant drug Paxil CR received tablets that did not contain any of the active ingredients of Paxil or tablets that contained the active ingredients but no controlled release mechanism; (2) Patients prescribed the diabetes drug Avandamet received tablets containing higher or lower amounts of the active ingredients of Avandamet specified by the FDA; (3) Patients prescribed the anti-nausea drug Kytril received non-sterile vials of the drug containing impurities; and (4) Patients prescribed the antibiotic drug Bactroban received antibiotic ointments and creams that were contaminated with microorganisms.
Under the terms of the settlement, GSK agreed to pay a total of $750 million in civil and criminal charges, fines and penalties to resolve claims brought by the federal government, Kentucky and other participating states that GSK caused false claims to be submitted to the Medicaid program. GSK will also enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General, which will require greater scrutiny of GSK’s future manufacturing practices. Finally, SB Pharmco Puerto Rico, Inc. will enter a plea of guilty to a criminal felony charge of misbranding drugs by introducing adulterated products into interstate commerce in violation of the United States Food, Drug and Cosmetic Act.
"Companies that compromise quality control to increase their bottom line jeopardize public safety," General Conway said. "I am pleased that this settlement includes a provision that will ensure that these types of substandard manufacturing practices do not continue in the future."
As a result of the settlement, the Kentucky Medicaid program will receive $8,463,194, which represents double the amount that Kentucky Medicaid expended for prescriptions written for the adulterated drugs. After reimbursing the federal government for its contribution, the Kentucky Medicaid program will be retain $2,414,997 of the settlement proceeds.
Since Attorney General Conway took office in January 2008, his Office of Medicaid Fraud and Abuse Control has recovered or been awarded approximately $150 million for the state and federal Medicaid programs. These cases range from lawsuits and settlements against pharmaceutical companies to cases against individual providers.
The Attorney General's Tip Line for reporting allegations of Medicaid fraud is 877-228-7384.
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