Georgia Department of Law, from the office of Thurbert E. Baker, Attorney General


Attorney General Baker Announces Settlement With GlaxoSmithKline Over Pricing Of Chemotherapy Drugs

August 11, 2006

ATLANTA, GA – Attorney General Thurbert Baker announced that he had reached a settlement with pharmaceutical giant GlaxoSmithKline (Glaxo) to resolve allegations that it improperly inflated the “average whole sale price” paid by government health plans for certain of its prescription drugs. The settlement, in conjunction with an earlier Federal Settlement, resulted in $418,951.52 being repaid to Georgia’s Medicaid program.

The conduct at issue concerned Glaxo’s reporting of pricing data that was used by Medicare and Medicaid to set reimbursement amounts for its drugs Kytril and Zofran, injectible anti-nausea drugs used by patients undergoing chemotherapy. According to the government allegations, Glaxo had increased the reported prices for these products to create a “spread” between what purchasers actually paid and what Federal and State health program would pay. This “spread” could then be offered as an inducement to positions or other drug purchasers to choose Glaxo products.

As part of the settlement, Glaxo will be required to report to the Georgia Medicaid Program two certified and federally defined prices that are currently used in connection with the Medicaid rebate program and Medicare part B reimbursement. Such prices were not previously available to Georgia. Georgia’s Medicaid program can then use those prices to evaluate whether the amount that it is paying for those drugs is reasonable under the Medicaid and Medicare programs. Glaxo is also required to enter into a Corporate Integrity Agreement with the Office of the Inspector General of the U.S. Department of Health and Human Services, and Glaxo will be required to submit to compliance monitoring with Medicaid and Medicare law in the future.