Gsk subsidiary sb pharmaco signs settlement deal with 37 states


Published on Losing a costly legal battle with the US federal government, SB Pharmaco Inc. and its parent holding firm GlaxoSmithKline (GSK) paid $750 million in penalties for failing to comply with drug production standards, court records show. The civil suit against the company was supported by a whistleblower as regards the production and distribution of adulterated batches of some drugs. These drugs include Kytril, Avandamet, Bactroban and Paxil CR.

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Gsk subsidiary sb pharmaco signs settlement deal with 37 states

  1. 1. As Published on the Paxil Birth Defects Website
  2. 2. Losing a costly legal battle with the USfederal government, SB Pharmaco Inc.and its parent holding firmGlaxoSmithKline (GSK) paid $750 millionin penalties for failing to comply withdrug production standards, courtrecords show. The civil suit against thecompany was supported by awhistleblower as regards the productionand distribution of adulterated batchesof some drugs. These drugs includeKytril, Avandamet, Bactroban and Paxil CR.
  3. 3. Paxil is a paroxetine hydrochloride drug which, like theordinary Paxil drug, serves as cure for major depressivedisorder, panic disorder, social anxietydisorder, obsessive compulsive disorder andpremenstrual dysphoric disorder. It is also possessed ofthe same Paxil side effects such as birthdefects, extreme behavioral shifts and suicidalbehavior. This formulation is meant to block thereuptake of serotonin, which is a brain neurotransmitterfor happy emotions. Paroxetine is a part of theantidepressant family known as selective serotoninreuptake inhibitors.
  4. 4. SB Pharmaco did not live up to the standards placed byauthorities in the production of drugs, media reportssay. The Puerto Rico-based subsidiary breached ethicalideals when it violated manufacturingstandards, exposing the public to the chemical hazardsof the drugs. It was reported that between the years of2001 to 2005, the company distributed these"adulterated and unclean" drugs. From the $750 millionpayment made by the company, $150 million wereallocated as payment of fines and the remaining $600million was spent for the claims made by the federal government.
  5. 5. After that 2010 incident, SBPharmaco and GSK entered into a a$40.8 million settlement with 37states in 2011. The companyexpressed their desire to rectifytheir errors and to never allow thesame happenstance to occur again.This measure was resorted to avoidfurther litigation and more expensesin the process. The bad report itcaused, however, created apermanent injury for GSK asreflected in its balance sheet.
  6. 6. The power of a Paxil lawsuit against GSK andits corporate muscle was shown in the punitivepenalties suffered by it amounting to millions.Nevertheless, as regards individuals exposedto Paxil side effects, there is no value for theinjury it caused apart from for the figureswritten in the compensatory claims.Commendable as it is for GSK to settle thesecases, it fails to cover the fact that there arereal victims who have been damaged by theirproduct.