Ohio to Receive $40 Million from GSK Fraud Settlement

Ohio Medicaid will receive $40.2 million in recoveries from GlaxoSmithKline (GSK), as the federal government, Ohio and several other states have reached an agreement in principle for the largest health care fraud settlement in US history. 

Under terms of the settlement, GlaxoSmithKline (GSK) has agreed to pay $3 billion to resolve allegations that GSK engaged in various illegal schemes related to the marketing and pricing of drugs it manufactures. As part of the settlement, GSK will pay to the states and the federal government a total of $2 billion in damages and civil penalties to compensate various federal healthcare programs, including Medicaid, for harm allegedly suffered as a result of the illegal conduct. In addition, GSK has also agreed to plead guilty to federal criminal charges relating to drug labeling and FDA reporting and has agreed to pay a $1 billion criminal fine in connection with those allegations. 

The state and federal governments alleged that GSK engaged in a pattern of unlawfully marketing certain drugs for drug uses that were not approved by the Food and Drug Administration (FDA); making false representations regarding the safety and efficacy of certain drugs; offering kickbacks to medical professionals; and underpaying rebates owed to government programs for various drugs paid for by Medicaid and other federally-funded healthcare programs.  Specifically, the government alleged that GSK engaged in the following activities:

As part of the settlement, GSK has also agreed to plead guilty to criminal charges that it violated the federal Food, Drug, and Cosmetic Act ("FDCA") in connection with certain activities.  The government alleges that GSK introduced Wellbutrin and Paxil into interstate commerce when the drugs were misbranded, meaning containing labels that were not in accordance with their FDA approvals, and that GSK failed to report certain clinical data regarding Avandia to the FDA.

The settlement is based on four qui tam actions brought by private individuals pursuant to state and federal false claims acts and filed in or transferred to the United States District Court for the District of Massachusetts, as well as investigations conducted by the U.S. Attorney's Office for the District of Massachusetts and the Civil Frauds Division of the U.S. Department of Justice. 

A National Association of Medicaid Fraud Control Units team participated in the investigation and analysis of the claims and conducted the settlement negotiations with GSK on behalf of the settling states.  Team members included representatives from Ohio, Massachusetts, California, Colorado, and New York.


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