GlaxoSmithKline Agrees To Pay Federal Government $3 Billion

November 3, 2011

In an agreement reached yesterday, Drug maker GlaxoSmithKline (GSK) will pay the United States Government $3 billion to settle investigations into the company’s sales and marketing tactics regarding it’s drug, Avandia. According to WRAL News, the deal stems from 2004 allegations that the company had price irregularities with the drug and did not fully disclose the dangers of the medication posed in marketing materials.

Documents show that the settlement will cover both civil and criminal liabilities for the company. As part of the agreement though, the company had to change policy and procedure for compensation of it’s sales force. The company says that bonuses paid to representatives of the company will no longer be based on hitting individual sales targets, but will rather focus on the quality of service that customers receive.

The company is hoping that these strategic moves will put to rest much of the controversy the company has faced regarding its business practices. The company says the payment will be made in the next fiscal year and will come from its cash assets. In all, GSK says it has paid out more $6 billion in settlements surrounding the drug Avandia.

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