LONDON and PHILADELPHIA, July 2, 2012 /PRNewswire/ -- GlaxoSmithKline plc (GSK) today announced that it has reached an agreement with the US Government, multiple states and the District of Columbia to conclude the Company's most significant ongoing Federal government investigations. The final settlement is a result of negotiations which reached agreement in principle in November 2011. GSK will make payments totalling $3bn which are covered by existing provisions and will be funded through existing cash resources.
The agreement resolves criminal and civil liabilities related to: an investigation begun by the US Attorney's office of Colorado in 2004 and later taken over by the US Attorney's Office of Massachusetts into GSK's sales and marketing practices for nine products; the U.S. Department of Justice's investigation of possible inappropriate use of the nominal price exception under the Medicaid Rebate Program; and the Department of Justice's investigation of the marketing and regulatory submissions of Avandia.
As part of the agreement, GSK has entered into a corporate integrity agreement (CIA) with the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services. The CIA will also cover a portion of GSK's manufacturing operations, related to the company's settlement in 2010 on events in the early 2000s at GSK's former manufacturing facility in Cidra, Puerto Rico. In both areas, the CIA will build on the company's existing comprehensive compliance programmes.
Commenting on the agreement, GlaxoSmithKline CEO Sir Andrew Witty said: "Today brings to resolution difficult, long-standing matters for GSK. Whilst these originate in a different era for the company, they cannot and will not be ignored. On behalf of GSK, I want to express our regret and reiterate that we have learnt from the mistakes that were made."We are deeply committed to doing everything we can to live up to and exceed the expectations of those we work with and serve. Since I became CEO, we have had a clear priority to ingrain a culture of putting patients first, acting transparently, respecting people inside and outside the organisation and displaying integrity in everything we do.
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