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Words in the News
 
Thursday 17 April 2003
 
Aids foundation sues Glaxo
 
A drugs worker A big British company is to pay nearly ninety million dollars for overcharging the American government for medicines. GlaxoSmithKline was accused of repackaging cheap drugs so they look more expensive when they were sold to the American health service. This report from Stephen Evans:
 
Listen Listen to the story
 
By law, drug companies have to charge the American government's health service, Medicaid, the lowest price they offer to anyone. A New York legal firm discovered though that the German company Bayer and the British company, GlaxoSmithKline, were repackaging cheap drugs and selling them at a higher price than their lowest list price.

Bayer, which made more from the breach, is to pay the US government two hundred and fifty million dollars. The British company, GlaxoSmithKline, is to pay ninety million dollars. GSK says the law was ambiguous and that it continues to believe that its interpretation of the law was reasonable and in good faith, and, its statement continues, the company has agreed to a civil settlement to avoid the delay and expense of a trial.

The company does add though that it has discontinued the practice which occurred before the new company was formed of a merger between SmithKline Beecham and Glaxo Welcome in December 2000.

Stephen Evans, BBC
 
 
Listen Listen to the words
 
repackaging
 
putting the products into new containers or wrappers
 
list price
 
the usual or official price before any reductions
 
made
 
here, earned
 
breach
 
the breaking of a promise or agreement
 
ambiguous
 
if something is ambiguous then it can have more than one possible meaning
 
interpretation
 
explanation and understanding of the meaning (of something)
 
in good faith
 
if you do something in good faith you believe that what you are doing is right, honest and legal
 
settlement
 
an official agreement between two sides who have been involved in a dispute
 
practice
 
something that is done regularly
 
merger
 
the joining together of two or more organisations for the benefit of all of them
 
 
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