GlaxoSmithKline fined $3bn in US

[FarCenter]

GlaxoSmithKline was socked with $3 billion in fines by US authorities Monday over charges it marketed drugs for unauthorized uses, held back safety data, and cheated the government's Medicaid program.

The Justice Department said GSK was fined over misbranding its drugs Paxil and Wellbutrin, and for holding back data while making unbacked claims for its diabetes drug Avandia.

GSK pleaded guilty and agreed to the fines in what the department called the largest health care fraud settlement in US history.

GSK, one of the world's largest health care and pharmaceuticals companies, admitted to charges that it had promoted antidepressants Paxil and Wellbutrin for uses not approved for by US regulators, including treatment of children and adolescents.

It also conceded charges that it held back data and made unsupported safety claims over its diabetes drug Avandia.

http://www.france24.com/en/20120702-glaxosmithkline-fined-3bn-us

[valerief]

1. Chump change. nt

[TheWraith]

3. No. That's about as much money as they make in the US in a year. nt

[KeepItReal]

6. Not quite... they make that much in PROFIT in about 4 months

They cleared $9 billion in profit last year.

[TheWraith]

8. Wrong. You might want to fact-check.

First off, you're citing net income, not profits. Net income is after payroll and expenses, but before reinvestment. In Glaxosmithkline's case, they spend about $6.2 billion a year on R&D. Most drug companies spend hugely on R&D, because that's how they develop new drugs. Off of their $8.45 billion in net income last year, that means $2.2 billion in profit for a year compared to a $3 billion fine.

Second, as I pointed out, their US sales only account for about 40-45% of their global total, hence coming close to that $3 billion mark I cited. In other words, even by the most generous interpretation--ignoring R&D spending--it's a very large amount of money. Certainly not "chump change."

[KeepItReal]

11. I'm not talking "US Profits" as they are a UK, not American, firm

Does anyone quote Apple's UK profits? It's just Apple no matter where they sell or manufacture.

http://www.gsk.com/investors/reports/q42011/q42011-us.pdf

That's the link to their financial statement that shows in 2011 they cleared almost $9 billion in after tax and R&D and other expenses.

"US profits" goes to same stakeholders as their other divisions.

[FarCenter]

13. HQ is London, but US sub is in Research Triangle Park, NC, and 45% of revenue is US

There predecessors, Glaxo, Smith Kline Beecham, and Burroughs Welcome all were transatlantic drug companies with operations in the UK and US.

GSK is probably the most extreme example of a financially driven, marketing oriented drug company.

GSK employs 98000 people worldwide including over 40,000 in sales and marketing.

http://en.wikipedia.org/wiki/GlaxoSmithKline

[DJ13]

2. I know that in this "money is God" culture they think they're being tough on these corporations

But the fact is that for the other 99% of the populace jailing those making these criminal decisions would show that the government really is getting tough.

These fines no longer impress.

[The Magistrate]

4. Hear Hear, Sir: Prison Time For Executives Is Required

Among other things, thse would provide an actual deterrent....

"Justice not only must be done, it must be seen to be done."

[KeepItReal]

5. Average mom and pop Medicare fraud gets you the slammer...

http://www.usatoday.com/news/washington/story/2011-08-29/Health-care-fraud-prosecutions-on-pace-to-rise-85/50180282/1

However:

Large scale Medicare fraud gets you a fine that your company pays out of its profits... That were around $9 billion dollars.

http://www.bizjournals.com/triangle/news/2012/02/07/gsk-profits-9b-on-44b-in-2011-sales.html

[hughee99]

7. They have to pay money because they could have, but didn't, comply with the law?

I thought that was called a "tax" now.

[spanone]

9. means they probably made 100 billion before they got caught

[msongs]

10. where is the jail time? where is the jail time? OH the check's in the mail wink wink nt

[thelordofhell]

12. I thought corporations were people now

Throw the whole company in jail!!!