GSK Settles for $105 Million Under State Consumer Protection Laws; Agrees to Unprecedented Compliance Provisions Through 2019

GlaxoSmithKline reached a $105 million settlement with 44 states and D.C. to resolve allegations that the company unlawfully marketed three products—asthma drug Advair, and antidepressant drugs Paxil and Wellbutrin. This settlement is newsworthy for a number of reasons. First, GSK’s $3 billion settlement from 2012 involved the same allegations and conduct, brought under the False Claims Act. This $105 million settlement was brought under states’ various consumer protection laws, and offers another “bite at the apple” in the sense that GSK has to pay twice for their alleged marketing practices. Second, a number of the settlement’s compliance terms, described below, are the first of its kind for a large pharmaceutical manufacturer.

State Consumer Protection Laws

GlaxoSmithKline’s $105 million settlement was to resolve allegations that they violated various states’ consumer protection laws by improperly marketing Advair and two antidepressants. For example, in California, which received the largest share of $7.1 million, GSK allegedly violated the California Business and Professions Code Section 17500 (Untrue or Misleading Representation) and Section 17200 (Acts of Unfair Competition).

Each state filed its own individual complaint, but alleged the same conduct under their specific consumer protection statutes. GSK allegedly promoted Advair for treatment of mild and intermittent asthma even though it was approved by the FDA only for treatment of more serious asthma conditions. The attorneys general also alleged GSK promoted Wellbutrin for treatment of weight loss and sexual dysfunction, even though these were unapproved uses. Finally, GSK allegedly concealed and misrepresented clinical studies that demonstrated Paxil’s ineffectiveness in treating children and adolescents with major depressive disorder, as compared to a placebo group.

In 2012, the Department of Justice alleged identical conduct and received a $3 billion settlement from GSK. California’s Attorney General, Kamala D. Harris, who just announced California’s share of the new settlement, announced California’s take of the $3 billion settlement back in 2012–$46 million.

A similar occurence happened with Abbot’s $1.5 billion settlement in 2012. There, forty five states settled for an additional $100 million under their consumer protection laws. We are curious whether this will be a regularly seen trend. 

Compliance Requirements

Back in 2012, GSK’s Corporate Integrity Agreement was the first of its kind in terms of scope and specificity. The 2014 settlement, which is the same in all the states, expands on these already strict terms. These provisions are somewhat similar to the settlement Abbot entered into with 45 states (Abbot’s Iowa settlement).

1.  Patient First Program

A major hallmark of the 2012 CIA was the limit on GSK’s use of financial incentives for its sales reps. The CIA required GSK to continue their “Patient First Program” for five years, until 2017. The new settlement extends this requirement for two more years—now through March 1, 2019.

Pursuant to the Patient First Program, GSK agrees that it will not provide financial reward or discipline (through tangible employment action) to its sales representatives or their direct managers based upon the volume of sales of GSK Products. The Patient First Program includes evaluations for sales representatives based on business acumen, customer engagement, and scientific knowledge about GSK’s Products. GSK must continue its Patient First Program, or a substantially equivalent program through March 1, 2019. The Patient First Program also begins the process of ending direct payments to healthcare professionals for speaking engagements and attendance at medical conferences.

2.  Limits to Promotions That Allege Comparative Effectiveness

Additionally, for a period of eight years—until 2022—GSK is under strict promotional rules that severely limit their ability to compare their products to competitors’ products. These rules did not appear in the previous CIA, and are likely a function of the business practice laws the settlement arose under.

Specifically, GSK mustnot make in a “promotional context” a representation or suggestion, not approved or permitted for use in the labeling or under the FDCA, that a GSK Product is better, more effective, useful in a broader range of conditions or patients, safer, has fewer, or less incidence of, or less serious side effects or contraindications than has been demonstrated by substantial evidence, or substantial clinical experience. This limitation is in place whether or not such representations are made by comparison with other drugs or treatments, and whether or not such a representation or suggestion is made directly or through use of published or unpublished literature, quotations, or other references.

This settlement includes very limiting terms on comparisons. GSK cannot represent that a drug is safer or more effective than another drug when it has not been demonstrated to be safer or more effective in such particular by substantial evidence or substantial clinical experience. This is a very unclear standard that could limit GSK’s ability to present new therapies.

In addition, the settlement limits in specific ways the way that GSK presents its clinical studies. GSK may not (1) present favorable information or conclusions from a study that is inadequate in design, scope, or conduct to furnish significant support for such information or conclusions; (2) use the concept of statistical significance to support a claim that has not been demonstrated to have clinical significance or validity, or fails to reveal the range of variations around the quoted average results; or (3) use statistical analyses and techniques on a retrospective basis to discover and cite findings not soundly supported by the study, or to suggest scientific validity and rigor for data from studies the design or protocol of which are not amenable to formal statistical evaluations.

3.  Clinical Research

GSK’s new settlement contains specific clinical research reporting protocol. GSK must register GSK-sponsored Applicable Clinical Trials beginning after the effective date of the settlement with the applicable registry and submit results of GSK-sponsored Applicable Clinical Trials completed after the Effective Date to the registry and results data bank as required by the FDA Amendments Act and any accompanying regulations that may be promulgated pursuant to that Act.

GSK must also post on their clinical study registry any observational studies or meta-analyses conducted by GSK that are designed to inform the effective, safe, and/or appropriate use of any GSK product.

4.  Product Sampling

This settlement contains a brand new Product Sampling section, which, due to its ambiguity, could severely limit the amount of samples GSK gives to healthcare professionals. The agreement states that GSK must not provide samples to healthcare professionals who are not expected to prescribe the sampled GSK products for an approved use, but who would be expected to prescribe the sampled product for an off-label use. This is a cloudy standard.

Additionally, if an HCP who would not be expected to prescribe the GSK Product for an approved use, but who would be expected to prescribe the product for an unapproved use, requests samples of that GSK Product, GSK personnel shall refer the HCP to GSK Medical Affairs where the practitioner can speak directly with a GSK Medical Affairs representative who will provide answers to the HCP’s questions about the GSK Product and GSK may provide him or her with samples only if appropriate (i.e., if the HCP requests the samples for an FDA approved (“on­label”) use).

It is unclear based on the agreement whether even the medical affairs team would be able to offer a sample for off-label use.

5.  Reprints

GSK must not disseminate information describing any Off-Label use of a GSK Product, unless such information and materials are consistent with applicable FDA regulations and FDA Guidance’s for Industry.

This provision appears to make FDA’s reprint guidance, which is contentious and unclear in many respects, mandatory for the next five years.

Additionally, reprints containing off-label Information must (1) be accompanied by the FDA-approved labeling for the product, or a clearly and conspicuously described hyperlink that will provide the reader with such information; (2) contain a disclosure that is prominently displayed, which would include the first page or as a cover page where practicable, indicating that the article discusses Off-Label information; and (3) not be referred to or used in a promotional manner.

6.  Clinical Responses/Off-Label Inquiries.

GSK, through “GSK Scientifically Trained Personnel,” shall have ultimate responsibility for developing and approving all Clinical Responses regarding a GSK Product, including any that may describe Off-Label information. Additional approvals may be provided by the GSK Law Department. The settlement stresses that GSK must not distribute any such materials unless: (1) Clinically Relevant Information is included in these materials to provide scientific balance; (2) data in these materials are presented in an unbiased, non-Promotional manner; and (3) these materials are clearly and conspicuously distinguishable from sales aids and other Promotional Materials.

This settlement requires off-label inquiries to go through GSK “scientifically trained personnel,” be completely unbiased, and any written responses must include “a report containing the results of a reasonable literature using terms from the request.”

The settlement states that GSK sales and marketing shall not develop any of the medical content of the clinical responses regarding a GSK product. Clinical Responses may be disseminated only by GSK Scientifically Trained Personnel to HCPs, and GSK Sales and GSK Marketing personnel shall not disseminate these materials to HCPs except in circumstances implicating “public health and safety issues.”

7.  Grants

The 2014 settlement greatly expands the grant section from the 2012 CIA. The CIA stated that GSK represents it provides grants for medical education of HCPs on a limited basis and that it provides such grants only to educational providers (including academic medical centers, hospital or delivery systems, or professional medical associations that represent HCPs who deliver patient care) that satisfy pre-set criteria established by GSK. They represented that it does not provide funding to any commercial providers of medical education. Under the 2012 CIA, GSK also had to establish a Grants Monitoring Program to conduct audits of medical education grants.

Under the new settlement, until 2019, GSK must disclose information about medical education grants, including continuing medical education (“CME”) grants, regarding a GSK Product as required by law. Additionally, GSK Medical Affairs must manage all requests for funding related to medical education grants relating to a GSK Product. Like the 2012 CIA, the 2014 settlement stressed that approval decisions must be made by GSK Medical Affairs, and be kept separate from the GSK Sales and GSK Marketing organizations.

GSK must also not use medical education grants or any other type of grant to promote a GSK Product. This provision includes, but is not limited to, the following prohibitions:

1. GSK Sales and GSK Marketing personnel shall not initiate, coordinate or implement grant applications on behalf of any customer or HCP;
2. GSK Sales and GSK Marketing personnel shall not be involved in selecting grantees or medical education speakers; and
3. GSK shall not measure or attempt to track in any way the impact of grants or speaking fees on participating HCPs’ subsequent prescribing habits, practices or patterns. This is nowhere to be found in the 2012 CIA.

GSK must also not condition funding of a medical education program grant request relating to a GSK Product upon the requester’s selection or rejection of particular speakers. Furthermore, GSK must not suggest, control, or attempt to influence the specific topic, title, content.

Each state requires the same compliance protocol. Read New York’s here, the compliance provisions begin on page 8. Click here for North Carolina‘s identical settlement as well.

Importantly, GSK did not admit any wrongdoing by settling and has stressed that these charges are the result of past issues. “We don’t feel like this is who we are today,” GSK spokesperson Mary Anne Rhyne told the BBC. “These are historic matters – they relate back to the federal government settlement in 2012 so some of these events are as long ago as 14 years,” she added. In fact, GSK insists that many of the practices are already in place. The company announced in December 2013 that it would stop paying healthcare professionals for speaking engagements. They also stated that would abandon prescription sales targets. This seems no longer to be voluntary for at least the next five years.