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Attorney General Kilmartin Announces $40.75 Million Settlement with GlaxoSmithKline and SC Pharmco and 38 States in Substandard Manufacturing Investigation

Attorney General Peter F. Kilmartin announced today that Rhode Island, along with 37 other states, reached a $40.75 million settlement with GlaxoSmithkline, LLC (GSK) and SB Pharmco Puerto Rico, Inc. (SB Pharmco) arising from alleged substandard manufacturing processes. Rhode Island will receive $564,503 as its portion of the settlement. The settlement is subject to final approval by the Superior Court.

In a complaint filed today along with the settlement agreement, Attorney General Kilmartin alleged that GSK and SB Pharmco engaged in unfair and deceptive practices when they manufactured and distributed certain lots of Kytril (a sterile drug used to prevent nausea and vomiting caused by cancer chemotherapy and radiation therapy), Bactroban (an antibiotic ointment used to treat skin infections), Paxil CR (the controlled release formulation of the popular antidepressant drug, Paxil), and Avandamet (a combination Type II diabetes drug) that were adulterated because the manufacturing processes used to produce these lots were substandard.

“The public trusts that the prescription drugs they take for serious medical problems are safe and manufactured according to the highest standards,” said Attorney General Kilmartin. “With the record profits the pharmaceutical companies make, it is egregious they would cut corners and put millions of people at risk.”

GSK and SB Pharmco are no longer manufacturing drugs at their Cidra facility, which has been closed since 2009. As a result of the settlement, GSK and SB Pharmco are enjoined from making false, misleading or deceptive claims regarding the manufacturing of all drugs formerly manufactured at the Cidra facility regardless of where these drugs are now produced. In addition, the companies must not misrepresent those drugs’ characteristics, or cause likelihood of confusion or of misunderstanding about the way in which they were manufactured.

The multistate group’s settlement is predicated on SB Pharmco’s admission of the federal criminal information, which was settled in October 2010. The settlement between GSK and the US Department of Justice included a criminal fine and forfeiture totaling $150 million and a $600 million civil settlement under the False Claims Act and related state claims. As part of that settlement, Rhode Island received $588,000 for the state’s Medicaid program, in addition to the amount announced today.

Consumers should note that there is no current cause for concern regarding the drugs covered by this agreement because all adulterated batches have been recalled. If consumers do have concerns they should contact their health care provider.

Special Assistant Attorney General Edmund F. Murray represented the State of Rhode Island in this case.

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