Glaxosmithkline $3 bn Settlement

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Case Details:

Case Code : BECG126
Case Length : 21 Pages
Period : 1998-2012
Organization : GlaxoSmithKline
Pub Date : 2013
Teaching Note :Available
Countries : US
Industry : Pharmaceutical Industry

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GlaxoSmithKline, headquartered in the UK, was one of the top 10 global pharmaceutical companies. The pharmaceutical company had its division also in the US, headquartered at Triangle Park, North Carolina. Listed on both the London Stock Exchange and the New York Stock Exchanges, GSK was considered as one of the world’s leading research based pharmaceutical and healthcare firms. According to the company website, "every minute more than 1,100 prescriptions are written for GSK products". The companies was involved in developing and supplying medicines to the people with the mission of improving the quality of human life by enabling people to do more, feel better, and live longer...

Business Ethics Case Studies | Case Study in Management, Operations, Strategies, Business Ethics, Case Studies

Business Segments

GSK has three primary areas of business - Pharmaceuticals, Vaccines, and Consumer Healthcare. In 2011, the company reported that the group's total turnover had fallen by 3 per cent to 27.4 billion ($43.92 billion). The pharmaceuticals business generated a turnover of 18.7 billion, which was 68 per cent of the group turnover. The vaccines business, one of the largest in the world, produced pediatric and adult vaccines against a range of infectious diseases and generated a turnover of 3.5 billion. The firm's consumer healthcare business segment that consisted of over-the-counter (OTC) medicines, oral healthcare, and nutritional healthcare generated a turnover of 5.2 billion...


The case against GSK was originally brought to light in January 2003 by two whistleblowers, Greg Thorpe (Thorpe) and Blair Hamrick (Hamrick), GSK sales representatives at the time. Later in January 2011, four more whistleblowers and the US Federal government too joined the case. Whistleblowers Thorpe and Hamrick first complained about the company's pharmaceutical market practices to their managers in 2001. They complained about the unlawful off-label promotion of the drugs by GSK and also about the false and misleading promotion of the drugs for non-medically accepted uses. According to the Food Drug and Cosmetic Act (FDCA), pharmaceutical companies cannot market or prescribe pharmaceutical drugs for other than approved indications or for an unapproved age group, or in an unapproved dose or unapproved form of administration...

The Drugs in Question

Both Paxil and Wellbutrin were approved by the FDA for treatment of Major Depressive Disorder (MDD) in adults. Paxil was the brand name of the drug Paroxetine and was an anti-depressant drug of the Selective Serotonin Reuptake Inhibitor (SSRI). Paxil received approval from the FDA on December 29, 1992, and was then manufactured by SmithKline Beecham before its merger with Glaxo Wellcome (Glaxo). It later received additional approval for being used in the treatment of obsessive compulsive disorder (OCD), panic disorder, social anxiety disorder (SAD) ,generalized anxiety disorder (GAD), and post traumatic stress disorder (PTSD). Later in February 1999, GSK received approval from the FDA for extended release of Paxil CR for treatment of MDD, panic disorder, SAD, and premenstrual dysphoric disorder. However, neither Paxil nor Paxil CR was approved by the FDA for any use in patients under the age of 18...


Wellbutrin was the brand name for the drug Bupropion and it was an antidepressant medication. Wellbutrin IR (Immediate Release) received approval from the FDA in December 1985 and later in October 1996 and Wellbutrin SR (sustained Release, WBSR) received approval for being used in the treatment of MDD in adults. At that time, both the drugs were being manufactured by the Glaxo Wellcome group, which later merged with SmithKline Beecham to form GSK. Subsequently in 2003, GSK received approval for the use of Wellbutrin XL (extended release, (WBXL)) for the treatment of MDD in adults...

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