Glaxo Pays $150M Price Fraud Fine

GlaxoSmithKline PLC has agreed to pay more than $150 million to settle fraud allegations over the pricing and marketing of two anti-nausea drugs, the Justice Department said Tuesday.

The pharmaceutical maker, which had headquarters in Research Triangle Park, N.C., and Pennsylvania, engaged in a scheme to inflate the price of Zofran and Kytril for the federal Medicare and Medicaid programs, which reimburse health care providers based on the manufacturers' prices, the government said. The drugs are used mainly to counter nausea brought on by chemotherapy and radiation.

But the company charged health care providers less for the drugs, knowing that the providers would get to pocket the difference, the Justice Department said.

GlaxoSmithKline admitted no wrongdoing as part of the settlement. It is the latest in a series of fraud settlements with major drug manufacturers that reap millions of dollars from the mammoth federal programs.

The government opened an investigation into the drugs' pricing after Ven-A-Care of the Florida Keys, Inc., a small home-infusion company, filed a whistleblower lawsuit that first raised the allegations. The company and its principals will receive $26 million from the settlement, as allowed under the federal False Claims Act, the Justice Department said.