Pharmaceutical Giant GlaxoSmithKline To Pay $750 Million To Resolve Criminal And Civil Allegations Relating To Sale Of Adulterated Drugs; Whistleblower Receives Record Reward

On October 26, 2010, the US Department of Justice announced that it had reached an agreement with GlaxoSmithKline, PLC in which the company has agreed to pay $750 million to resolve criminal and civil allegations regarding the sale of adulterated drugs by one of the company’s subsidiaries.  Approximately $436 million of the overall settlement will be paid to the federal government to resolve allegations that Glaxo submitted false claims to government health care programs for certain quantities of adulterated drugs in violation of the False Claims Act.  More specifically, the government accused Glaxo of selling certain batches of the drugs Kytril, Bactroban, Paxil CR, and Avandamet, whose the strength, purity, or quality fell materially below the strength, purity, or quality set forth in the drugs’  FDA applications and related documents.

The qui tam lawsuit was brought on behalf of the government by whistleblower Cheryl Eckard, a former quality assurance manager for Glaxo who filed the lawsuit after she was terminated from the company.  As a reward for disclosing Glaxo’s fraud to the government, Ms. Eckard will receive a record $96 million share of the settlement—the largest reward ever received by a single whistleblower.

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