Largest Woodford holding GSK hit by $3bn fine
Pharmaceutical giant GlaxoSmithKline (GSK) - a favourite holding of the asset management industry - will pay $3 billion (£1.9 billion) in the US’ largest ever case of healthcare fraud.
The company, which is held by Invesco Perpetual’s Neil Woodford, M&G’s Tom Dobell and Artemis’ Adrian Frost, pleaded guilty to criminal charges concerning the mis-selling of drugs and withholding of data.
The case related to the group’s marketing of Paxil, which it targeted at patients under age 18 despite only being approved for adults, and Wellbutrin, which it promoted for uses it was not approved for.
GSK promoted the two antidepressants by treating doctors to holidays in Hawaii, expensive meals and tickets to see Madonna in concert, US prosecutors said
A third case involved the company failing to give safety data about its diabetes drug Avandia to the US Food and Drug Administration.
The deal, which is still to be approved by the courts, will see $1 billion paid in criminal damages and the remaining $2 billion paid in civil fines. The company says the settlement will be covered by existing provisions.
Andrew Witty, chief executive of GSK, says: “Today brings to resolution difficult, long-standing matters for GSK.
“Whilst these originate in a different era for the company, they cannot and will not be ignored. On behalf of GSK, I want to express our regret and reiterate that we have learnt from the mistakes that were made.”
It is also in the largest equity position in Dobell’s £7.4 billion M&G Recovery fund*, Iain Stewart’s £5.8 billion Newton Real Return fund* and Frost and Adrian Gosden’s £4 billion Artemis Income fund*, while being found in the top 10 holdings of many retail fund portfolios.
* as of May 31
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