AG McDaniel Announces $2 Million Medicaid Settlement

Attorney General Dustin McDaniel announced Monday (July 2) that Arkansas, other states and the federal government have reached an agreement in principle with pharmaceutical company GlaxoSmithKline to resolve allegations that the company engaged in illegal marketing and pricing practices related to certain drugs it manufactures.

Under the terms of the settlement, GSK agreed to pay $2 billion in damages and civil penalties to the federal government and the states. An additional fine of $1 billion will be paid in connection with federal criminal charges related to drug labeling and FDA reporting.

Arkansas's Medicaid program will receive $2.065 million. With federal matching funds added, $7,654,782.22 will go to Arkansas Medicaid.

“Arkansas taxpayers and beneficiaries of Medicaid should not be shortchanged by compa

nies that choose to put profits over people,” McDaniel said. “I am pleased that the states and federal government have pursued this settlement, and that money will be restored to the Arkansas Medicaid program as a result.”

The state and federal governments alleged that GSK engaged in a pattern of unlawfully marketing certain drugs for uses for which the drugs were not approved by the FDA; made false representations regarding the safety and efficacy of certain drugs; offered kickbacks to medical professionals; and underpaid rebates owed to government programs for various drugs paid for by Medicaid and other federally-funded healthcare programs.

As part of the settlement, GSK has also agreed to plead guilty to criminal charges that it violated the federal Food, Drug, and Cosmetic Act in connection with certain activities.