GlaxoSmithKline to Pay $750M Fine for Sale of Bad Drugs

- AOL.com
10/27/2010 - Another day, another hard pill to swallow for GlaxoSmithKline.

On Tuesday, the pharmaceutical giant agreed to pay $750 million to settle a government lawsuit alleging that the company sold defective and potentially dangerous medication.

The U.S. Justice Department brought suit against GSK after finding that the company's Cidra, Puerto Rico, factory produced drugs sold to consumers that were often mislabeled, of the wrong dosage and contaminated with micro-organisms.

"Today's settlement reminds the pharmaceutical industry that they must observe those standards and reflects the commitment of Federal law enforcement organizations to pursue improper and illegal conduct that places health care consumers at risk," Patrick E. McFarland, inspector general of the U.S. Office of Personnel Management, said in a statement.

It's a sharp turn south for the company from earlier this year, when the Food and Drug Administration initially ruled to keep the drug Avandia on the U.S. market and stop studying it before later withdrawing it from store shelves. GSK, which closed the Cidra factory in 2009, issued its own statement to as much affect about today's settlement:

"We regret that we operated the Cidra facility in a manner that was inconsistent with current Good Manufacturing Practice (cGMP) requirements and with GSK's commitment to manufacturing quality," said PD Villarreal, GSK's senior vice president and head of global litigation. "GSK worked hard to resolve fully the manufacturing issues at the Cidra facility prior to its closure in 2009 and we are committed to continuous improvement in our manufacturing processes."

According to the Justice Department, the drugs found to be adulterated included Bactroban, Kytril, Paxil CR and Avandamet.

The federal government will receive $436,440,000, and GSK will pay $163,560,000 to states participating in the agreement, the Justice Department said.

In September, the FDA announced it was implementing new restrictions on rosiglitazone, the main ingredient in Avandia, Avandamet and Avandaryl, which are used to help control type 2 diabetes, and which earn GlaxoSmithKline billions in profit annually. The European Medicines Agency, meanwhile, recommended that Avandia be taken off the market altogether after studies indicated a sharp increase in heart attack risk associated with the drug.

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