GSK to pay $70 mn to end drug suits

NEW YORK: Glaxosmithkline (GSK), Europe’s biggest drugmaker, will pay more than $70m to settle claims by state attorneys general and consumers that the firm overcharged government health programs for its medicines.

The settlement covers claims by New York, California, Nevada, Connecticut, Montana and Arizona, and potential claims in 34 other states and the District of Columbia, the Brentford, England-based company said in a statement. The agreement also resolves a lawsuit filed in Boston by health care programs, individuals and insurers, the company said.

The case stems from the government practice of using so-called average wholesale prices, as reported by GSK and other drug firms, to set reimbursement rates for medicines used by Medicare & other federal health programs. The states claimed the firms used the formula to artificially inflate drug prices, costing them hundreds of millions of dollars.