GlaxoSmithKline Papers Over Importance Of $750 Million Government Settlement

GSK agreed to pay $750 million to settle false claims suit over the distribution of some of its drugs.

The press statement by the company makes it appear almost as it nothing had happened:

GlaxoSmithKline today announced that it has finalized a previously reported agreement in principle with the U.S. Attorney’s Office for the District of Massachusetts and the  U.S. Department of Justice (DOJ) with respect to the investigation of the company’s former manufacturing facility in Cidra, Puerto Rico.
GSK disclosed a $750 million (£500 million) charge to its second-quarter 2010 earnings on July 15 in connection with the agreement in principle. No additional charge to the company’s earnings will be recorded in connection with the settlement.

The government put the reason for the settlement differently.

“We will not tolerate corporate attempts to profit at the expense of the ill and needy in our society — or those who cut corners that result in potentially dangerous consequences to consumers,” Carmen M. Ortiz, the U.S. Attorney in Boston, said according to Bloomberg.

The settlement includes a criminal fine and forfeiture totaling $150 million and a $600 million civil settlement under the False Claims Act and related state claims, the Justice Department said in a statement.

The parts about making profits off the ill and the criminal fines did not make the GSK release for some reason.

Douglas A. McIntyre