GlaxoSmithKline has agreed to pay Louisiana $45 million to settle lawsuits that accused the drug maker of improperly marketing its embattled diabetes drug Avandia and other drugs, attorneys for the state and company told a judge Friday.
GSK also will pay an additional $7 million to the private lawyers who handled the state’s suits against the firm.
GSK further agreed to drop a lawsuit it filed last year against state Attorney General Buddy Caldwell. The suit claimed the private lawyers hired by Caldwell to prosecute the state’s suits against the company had a “personal financial interest’’ in the outcome of the litigation.
One of those lawyers, Wade Shows, said the $45 million — which will go directly to Louisiana’s Medicaid program — is part of a $229 million settlement with seven other states. Louisiana received more money from GSK than any of those states, Shows told state District Judge Janice Clark.
Caldwell’s office sued GSK in 2011, alleging the firm misrepresented the safety and efficacy of its prescription drug Avandia, causing Louisiana physicians to submit more than 304,000 “false claims’’ for Avandia for Louisiana Medicaid recipients. Medicaid is the state-federal health insurance program for the poor.
“The reason for bringing this case was because they hid the grave and adverse effects, including death, that was brought on by this drug, Avandia,” Caldwell said Friday outside Clark’s courtroom, adding that the state contends Avandia-related deaths occurred in Louisiana.
Caldwell called the agreement the largest such pharmaceutical recovery ever received by the state. Avandia, once a blockbuster seller, fell out of favor because of potential ties to heart attacks. Caldwell said his office’s suits against GSK were a “pro-business decision.”
“This levels the playing field,” he said. “It tells businesses we want you in this state. Everybody has to play by the same rules.”
Cleo Fields, one of GSK’s attorneys, said outside the courtroom that the company “is not admitting it did anything wrong.”
“The company is settling these matters to avoid the expense and uncertainty of protracted litigation and trial,” GSK said in a written statement. “The company did not admit to any wrongdoing or liability of any kind under these states’ laws in this settlement.”
“With regards to Avandia, we believe we acted responsibly in conducting the clinical trial program for Avandia, in marketing the medicine, in monitoring its safety once it was approved for use and in updating information in the medicine’s labeling as new information became available,” the statement added.
In addition to Louisiana, GSK settled with Mississippi, South Carolina, Utah, New Mexico, West Virginia, Maryland and Kentucky.
Caldwell said he was not part of the negotiations between the private lawyers and GSK over attorneys’ fees and costs. He stressed that there was no contingency fee agreement with those lawyers, meaning their fees did not come out of the state’s settlement money.