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:
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.