The British drug company GlaxoSmithKline today pled guilty to the largest health-care fraud in U.S. history. It was also hit with the biggest fine ever - $3 billion dollars.
The Justice Department sued the company for fraud for the way it marketed some of its biggest prescription drugs like Paxil and Avandia.
The government's investigation was nationwide and involved several agencies, including the FBI.
Prosecutors said the company paid doctors to attend lavish conferences, including spa sessions, to promote off-label uses for its drugs - uses not approved by the FDA.
For instance, Glaxo illegally promoted the use of the antidepressant Paxil for children while the drug is only approved for adults.
It also pled guilty to marketing another anti-depressant called Wellbutrin as a weight-loss drug. It even pushed it as a cure for erectile dysfunction!
The government said Glaxo’s sales representatives called Wellbutrin “the happy, horny, skinny pill.”
Even when the company got the drug right - it got it wrong.
The government accused Glaxo of failing to report the risks of its diabetes drug Avandia - the risk being it could kill you.
The company was also accused of going to extreme lengths to push its pills, including producing bogus studies, putting together sham advisory boards and paying millions of dollars in kickbacks to doctors to write prescriptions.
Glaxo was also found guilty of ripping off Medicaid, and that's another one of the reasons the drug companies have become prime targets for federal prosecutors.
Glaxo has now promised to change its ways, and I certainly hope they do. It's discouraging when a company which proclaims its strategy is to help all of us "do more, feel better, live longer" cheats and lies to sell its products.
This isn't the old world of health care. It's the new one! And it leads to a question: if pharmaceutical companies had a fraud problem before Obamacare became the law, how bad will it be after the rest of the new health-care law is implemented?
Because, let's face it, if there is any fraud problem in health care today it's the billions that are stolen out of Medicare and Medicaid every year.
More government and government-like programs means more rip-offs of tax dollars. That's my forecast!