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TheStreet Open House

Whistleblowers Played Major Role In Glaxo Case, Leading To Glaxo's Record Settlement

Stocks in this article: GSK

WASHINGTON, July 2, 2012 /PRNewswire/ -- Two whistleblowers represented by Phillips & Cohen LLP provided the government with overwhelming evidence that was at the heart of the government's case against GlaxoSmithKline (NYSE: GSK) and the record-setting settlement announced today.

The whistleblowers – Thomas Gerahty, a former senior marketing development manager for Glaxo, and Matthew Burke, a former regional vice president -- provided invaluable insider information that Glaxo was engaging in corrupt nationwide schemes to push sales of Advair, Wellbutrin, Imitrex and other popular prescription drugs for "off-label" (unapproved) uses, that it used improper financial inducements to market its drugs, and that it misrepresented the safety and efficacy of those drugs.  Glaxo's illegal practices caused Medicare, Tricare – the healthcare program for the military -- and Medicaid to incur huge losses. 

The civil settlement of Gerahty and Burke's whistleblower case and a separate whistleblower lawsuit filed in Colorado total $1.017 billion out of total settlement. It is the largest civil, False Claims Act (whistleblower) settlement on record. (Two other whistleblower lawsuits that alleged another improper practice concerning Advair marketing settled for $25 million, for a total of $1.042 billion paid under the settlement agreement for the four whistleblower cases.)  

Gerahty, Burke and Phillips & Cohen worked closely with the U.S. Attorney's Office in Boston and the Justice Department since they filed their "qui tam" (whistleblower) case in early 2003 in Boston's federal district court.

Gerahty and Burke gave the government new and detailed information about Glaxo's nationwide improper marketing practices, including the use of financial inducements to doctors to prescribe Glaxo's drugs and the promotion of  Advair, Wellbutrin, Imitrex, Lamictal, Zofran and Valtrex for off-label, unapproved uses.  Unapproved use of prescription drugs can create significant risks to patients, and drug manufacturers are prohibited by federal law from promoting their drugs for unapproved treatments. 

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