WASHINGTON – GlaxoSmithKline (GSK) has paid more than $150 million to settle government charges that the company fraudulently inflated the price of drugs purchased by federal health-care programs, the Justice Department (search) said Tuesday.
The settlement stems from allegations that the British company violated the False Claims Act (search) in the sale and marketing of Zofran (search) and Kytril (search), two nausea drugs prescribed to patients undergoing cancer treatment, the department said.
GlaxoSmithKline issued a statement saying it did nothing wrong, but agreed to settle the case to avoid litigation.
set and maintain inflated prices for the two drugs, knowing that federal health care programs used those prices to establish their reimbursement rates.
The Justice Department "will not tolerate fraudulent pricing practices designed to reap profits for drug companies and doctors at the expense of health care programs for the poor and the elderly," an official said in a statement.
Of the amount paid by GlaxoSmithKline, $26 million will go to whistleblowers who prompted the investigation and another $10 million will go to state governments.