As GlaxoSmithKline (NYSE: GSK) agreed to pay largest healthcare fraud settlement in U.S. history on Monday, insiders will share in the payouts.
Two former Glaxo sales representatives helped launch the investigation in 2003, and two others joined them in 2011.
Glaxo will pay $832 million to the federal government and $210 million to states participating in the civil off-label marketing settlement, the U.S. said. This portion of the settlement will also resolve four whistle-blower lawsuits pending in federal court in Boston.
Two of these whistle-blowers informed Glaxo in 2001 that company personnel were marketing drugs illegally, their attorney Tavy Deming said Monday in a statement.
“An ensuing GSK internal investigation verified their allegations, but the company took no action, choosing hefty profits over compliance and patient safety,” she said.
The government’s investigations of allegations brought by her clients, whistleblowers Greg Thorp and Blair Hamrick, lasted nine years, Thorp said in a statement.
“I cannot be certain, if I knew beforehand what was coming after filing this case, that I could do it again,” he said.
He was pushed out of Glaxo in 2002 and afterward was unable to get work in the pharmaceutical industry, he said. “I applied to some 23 companies without getting a single interview,” Thorp said. “Financially, my life became a nightmare.”
Thorp, Hamrick and other whistle-blowers will receive a share of the governments’ recovery, under federal and state false claims laws.
The amounts of these shares haven’t been determined, said attorney Brian Kenney, who also represents whistleblowers Thorp and Hamrick.
The case against Glaxo was originally brought in January 2003.
Prosecutors said Glaxo illegally promoted Paxil for treating depression in children from 1998 to 2003, even though it wasn’t approved for anyone under age 18. The company also promoted Wellbutrin from 1999 through 2003 for weight loss, sexual dysfunction, substance addictions and attention deficit hyperactivity disorder, although it was only approved for treatment of major depression.
Starting in 2001, Thorpe reported to his district manager, then to Glaxo’s human resources department and finally to Glaxo’s chief of global compliance about a number of improper marketing practices. The compliance chief began an internal investigation, which confirmed Thorpe’s allegations through various ways including marketing materials and interviews with Hamrick and other sales representatives, according to lawyers for the two men.
Brian Kenney and Deming, attorneys for the two salesmen, said top management did nothing to stop the illegal practices, pressured Thorpe to resign and later fired Hamrick for allegedly not cooperating with the company’s investigation of one kickback allegation.
According to Deming, Hamrick reported that at a 2000 regional meeting of sales representatives in Las Vegas, they were directed to promote Wellbutrin as the drug that makes patients happy, skinny and sexually turned on, part of a catchy national slogan repeated to doctors.
Thorpe said in a statement Monday that he was penalized after he reported kickbacks being paid to doctors and sales reps encouraging doctors to promote drugs for unapproved uses, including using Paxil and Wellbutrin in children.
“In the end, I was told that my concerns were not valid. I was put on leave” after a 24-year career, Thorpe said. He added that he was told to either “take a severance package or go back to work for the same people, doing the same things I had reported to management.”
(The AP and Bloomberg contributed to this report.)