Ad-Express and Daily Iowegian, Centerville, IA

July 9, 2012

State of Iowa to receive $3.48 million in national fraud settlement

Daily Iowegian

DES MOINES — The state of Iowa will recover nearly $3.5 million as part of a national settlement between GlaxoSmithKline and the federal government. 

“This settlement represents the largest healthcare fraud settlement in U.S. history,” Iowa Department of Inspections and Appeals Director Rod Roberts said. The settlement compensates Iowa’s Medical Assistance Program for harm allegedly suffered as a result of illegal conduct.

The federal government alleged that GSK engaged in a pattern of unlawfully marketing certain drugs for uses for which the drugs were not approved by the U.S. Food and Drug Administration, making false representations regarding the safety and efficacy of certain drugs, offering kickbacks to medical professions; and underpaying rebased owed to government programs for various drugs paid for by Medicaid and other federally-funded healthcare programs.  Specifically, the government alleged that GSK engaged in the following activities:

• Marketing the depression drug Paxil for off-label uses, such as use by children and adolescents;

• Marketing the depression drug Wellbutrin for off-label uses, such as for weight loss and treatment of sexual dysfunction, and at higher-than-approved dosages;

• Marketing the asthma drug Advair for off-label uses, including first-line use for asthma;

• Marketing the seizure medication Lamictal for off-label uses, including bipolar depression, neuropathic pain, and various other psychiatric conditions;

• Marketing the nausea drug Zofran for off-label uses, including pregnancy-related nausea;

• Making false representations regarding the safety and efficacy of Paxil, Wellbutrin, Advair, Lamictal, Zofran and the diabetes drug Avandia;

• Offering kickbacks, including entertainment, cash, travel and meals, to healthcare professionals to induce them to promote and prescribe Paxil, Wellbutrin, Advair, Lamictan, Zofran, the migraine drug Imitrex, the irritable bowel syndrome drug Lotronex, the asthma drug Flovent and the shingles and herpes drug Valtrex; and

• Submitting incorrect pricing data for various drugs, thereby underpaying rebates owed to Medicaid and other federal healthcare programs.

As part of the settlement, GSK has also agreed to plead guilty to criminal charges that it violated the federal Food, Drug and Cosmetic Act in connection with certain activities.  The government alleges that GSK introduced Wellbutrin and Paxil into interstate commerce when the drugs were misbranded, meaning containing labels that were not in accordance with their FDA approvals, and that GSK failed to report certain clinical data regarding Avandia to the FDA.

A team from the National Association of Medicaid Fraud Control Units participated in the investigation and analysis of claims, and conducted the settlement negotiations with GSK on behalf of the settling states.  Team members included representatives from Massachusetts, California, Colorado, New York, and Ohio.

In Iowa, allegations of Medicaid provider fraud are investigated by DIA’s Medicaid Fraud Control Unit, which participated in the Iowa portion of the GSK investigation. In addition to provider fraud, MFCU investigates alleged abuse and neglect of residents in long-term care facilities that receive Medicaid reimbursements from the federal government. Investigators also look into allegations that residents have been defrauded of personal funds or possessions.