Drug giant GlaxoSmithKline has agreed to pay the state of West Virginia $22 million to settle a lawsuit that alleged the company illegally promoted its Avandia diabetes medicine. The British drugmaker had initially announced the settlement with West Virginia and seven other states in a regulatory filing in July 2013. West Virginia Attorney General Patrick Morrisey has now signed off on the settlement, announcing it last month. The Attorney General said GlaxoSmithKline’s $22 million payment is one of the largest pharmaceutical lawsuit settlements in his state’s history. He had this to say:

This settlement is a significant victory for the state, its agencies and the people. We are pleased that we were able to recoup some of the money spent on these products. Our citizens have the right to know the risks and possible side effects of the medication they are taking.

The lawsuit we filed in Wayne County Circuit Court in 2012. It was alleged that GlaxoSmithKline failed to disclose side effects of Avandia, which the company marketed as a diabetes drug that would lower patients’ blood sugar and decrease risks of heart problems. However, as we have previously reported the drugs have been linked to heart attacks and strokes. Avandia was pulled from the market in Europe, and its sale is now heavily restricted in the United States. Avandia once was the world’s best-selling diabetes drug, generating $3 billion in sales, according to a Bloomberg News report.

In November 2012, GlaxoSmithKline agreed to pay $90 million to settle Avandia-related lawsuits in 37 states. Significantly, West Virginia was one of eight states that opted out of that multi-state agreement, a decision that seems to have paid dividends. All too often, a state attorney general will follow another state’s attorney general into a settlement without doing their own due diligence on a proposed nationwide settlement. For example, in this case, states that settled their lawsuits in 2012 each received payments of about $1.5 million to $3 million. It’s quite evident that West Virginia did much better by filing its own lawsuit and not accepting the global settlement amounts. Regardless of how one does the math, $22 million is a whole lot more than the amounts received by the states that participated in the 2012 settlement.

In late March, the federal Centers for Medicare and Medicaid Services agreed not to try to recoup any of the $22 million that West Virginia received from the settlement with GlaxoSmithKline. The suit was filed on behalf of West Virginia’s Medicaid program and the state Public Employees Insurance Agency (PEIA) with PEIA to receive $10.5 million from the $22 million settlement. The next-largest share, $4.6 million, will pay outside lawyer fees and expenses. West Virginia’s Medicaid program will receive up to $3.7 million. Also, Attorney General Morrisey’s Consumer Protection Division will receive $3 million — money that will pay the division’s operating expenses for three years.

As you may recall, in 2012, GlaxoSmithKline agreed to pay $3 billion and pled guilty to criminal charges in one of the largest health-care fraud cases in U.S. history. The settlement included charges of failing to provide the U.S. Food and Drug Administration with clinical safety data about Avandia.

West Virginia is represented by the following firms: Greene Ketchum Farrell Bailey & Tweel; Heard Robins Cloud; and Baron & Budd. The case was filed in the Circuit Court of Wayne County, W.V. These lawyers did a very good job in the case and made the state of West Virginia and its taxpayers the real winner in relation to the global settlement in 2012.

Source: Eric Eyre at ericeyre@wvgazette.com

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