Glaxo In Huge US Healthcare Fraud Payout

British pharmaceutical giant GlaxoSmithKline (Other OTC: GLAXF.PK - news) has agreed to plead guilty to criminal charges and pay a multi-billion settlement over healthcare fraud in the United States.

The $3bn (£1.9bn) agreement makes it the largest case of medical-based fraud in US history.

The settlement by GlaxoSmithKline (GSK) includes $1bn in criminal fines and $2bn in civil fines.

The massive payments have been levied in connection with the sale of the drug company's Paxil, Wellbutrin and Avandia products.

Deputy US attorney general James Cole said that the settlement "is unprecedented in both size and scope".

As part of the settlement announced on Monday, GSK agreed to strict oversight of its sales force by the US government to prevent the use of kickbacks or other prohibited practices.

The investigation began in Colorado in 2004 and later expanded in Massachusetts over sales and marketing practices for nine products.

Company boss Sir Andrew Witty said: "Today brings to resolution difficult, long-standing matters for GSK.

"While 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."

:: GSK shares traded 1.7% up in London on Monday as markets closed.