GlaxoSmithKline plc Concludes Previously Announced Agreement In Principle To Resolve Multiple Investigations With US Government And Numerous States

GlaxoSmithKline plc (GSK) announced that it has reached an agreement with the US Government, multiple states and the District of Columbia to conclude GSK's most significant ongoing Federal government investigations. The final settlement is a result of negotiations which reached agreement in principle in November 2011. GSK will make payments totalling $3billion which are covered by existing provisions and will be funded through existing cash resources. The agreement resolves criminal and civil liabilities related to: an investigation begun by the US Attorney’s office of Colorado in 2004 and later taken over by the US Attorney’s Office of Massachusetts into GSK’s sales and marketing practices for nine products; the U.S. Department of Justice’s investigation of possible inappropriate use of the nominal price exception under the Medicaid Rebate Program; and the Department of Justice’s investigation of the marketing and regulatory submissions of Avandia. As part of the agreement, GSK has entered into a corporate integrity agreement (CIA) with the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services. The CIA will also cover a portion of GSK’s manufacturing operations, related toGSK's settlement in 2010 on events in the early 2000s at GSK’s former manufacturing facility in Cidra, Puerto Rico. In both areas, the CIA will build on the company's existing comprehensive compliance programmes.