Product News and Recalls

Historic settlement has no impact on GSK stock

Forbes reports that pharmaceutical giant GlaxoSmithKline’s stock prices haven’t dropped at all in the wake of a historic $3 billion settlement with the U.S. Justice Department over illegally marketing drugs.

“Paying the Department of Justice settlements are apparently just a cost of the drug business,” Forbes states.

According to Forbes, GlaxoSmithKline sold medication to treat depression in kids under 18, despite a lack of pediatric approval. It also promoted depression drug Wellbutrin to treat weight loss and sexual dysfunction, among other things.

But in the past decade, those two drugs alone brought in more than seven times the amount of the settlement.

The recent settlement isn’t the end of GlaxoSmithKline’s legal troubles. Thousands of plaintiffs have filed suit over birth defects allegedly caused by antidepressants classified as selective serotonin reuptake inhibitors, or SSRIs. A number of studies have linked the use of SSRI antidepressants – which include Prozac and Zoloft – by pregnant women with potentially deadly heart and lung defects in newborns.

Even before the announcement of the settlement earlier this month, a recent report on YCharts explained that criminal penalties alone have exerted little influence on pharmaceutical companies’ stock. And not coincidentally, those settlements appear to have little influence on the companies’ practice of blatantly marketing drugs for uses that federal regulators haven’t approved.

“Almost every major drug maker has been accused of this,” the YChart story says. “Right or wrong, there’s a lot of money to be made here that appears to more than make up for the fines and other penalties involved.”

As an example, YChart cites the $1.5 billion settlement against Abbott Laboratories, which had been marketing the seizure drug Depakote as treatment for agitation and aggression in dementia patients and for schizophrenia, despite the lack of any evidence to support its claims.

The report points out that Depakote hit $1.5 billion in sales in 2007. “So the fine, while steep, was essentially one good year of sales.”

Patients should consult their doctors before making any changes in their medication. A consultation with an SSRI lawyer is also important if there are significant injuries from SSRIs.

See the Forbes story here:

http://www.forbes.com/sites/ycharts/2012/07/05/once-more-with-feeling-feds-hit-glaxo-for-3-billion-market-yawns/

See the YChart story here:

http://ycharts.com/analysis/story/pharmakarma_1_billion_fines_no_biggie_for_illegally_promoting_offlabel_drug_use