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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsGlaxoSmithKline fined $3bn in US
The Justice Department said GSK was fined over misbranding its drugs Paxil and Wellbutrin, and for holding back data while making unbacked claims for its diabetes drug Avandia.
GSK pleaded guilty and agreed to the fines in what the department called the largest health care fraud settlement in US history.
GSK, one of the world's largest health care and pharmaceuticals companies, admitted to charges that it had promoted antidepressants Paxil and Wellbutrin for uses not approved for by US regulators, including treatment of children and adolescents.
It also conceded charges that it held back data and made unsupported safety claims over its diabetes drug Avandia.
http://www.france24.com/en/20120702-glaxosmithkline-fined-3bn-us
valerief
(53,235 posts)TheWraith
(24,331 posts)KeepItReal
(7,769 posts)They cleared $9 billion in profit last year.
TheWraith
(24,331 posts)First off, you're citing net income, not profits. Net income is after payroll and expenses, but before reinvestment. In Glaxosmithkline's case, they spend about $6.2 billion a year on R&D. Most drug companies spend hugely on R&D, because that's how they develop new drugs. Off of their $8.45 billion in net income last year, that means $2.2 billion in profit for a year compared to a $3 billion fine.
Second, as I pointed out, their US sales only account for about 40-45% of their global total, hence coming close to that $3 billion mark I cited. In other words, even by the most generous interpretation--ignoring R&D spending--it's a very large amount of money. Certainly not "chump change."
KeepItReal
(7,769 posts)Does anyone quote Apple's UK profits? It's just Apple no matter where they sell or manufacture.
http://www.gsk.com/investors/reports/q42011/q42011-us.pdf
That's the link to their financial statement that shows in 2011 they cleared almost $9 billion in after tax and R&D and other expenses.
"US profits" goes to same stakeholders as their other divisions.
FarCenter
(19,429 posts)There predecessors, Glaxo, Smith Kline Beecham, and Burroughs Welcome all were transatlantic drug companies with operations in the UK and US.
GSK is probably the most extreme example of a financially driven, marketing oriented drug company.
http://en.wikipedia.org/wiki/GlaxoSmithKline
DJ13
(23,671 posts)But the fact is that for the other 99% of the populace jailing those making these criminal decisions would show that the government really is getting tough.
These fines no longer impress.
The Magistrate
(95,255 posts)Among other things, thse would provide an actual deterrent....
"Justice not only must be done, it must be seen to be done."
KeepItReal
(7,769 posts)However:
Large scale Medicare fraud gets you a fine that your company pays out of its profits... That were around $9 billion dollars.
http://www.bizjournals.com/triangle/news/2012/02/07/gsk-profits-9b-on-44b-in-2011-sales.html
hughee99
(16,113 posts)I thought that was called a "tax" now.
spanone
(135,885 posts)msongs
(67,453 posts)thelordofhell
(4,569 posts)Throw the whole company in jail!!!