For Immediate Release - June 23, 2011

AG COAKLEY AND 37 STATE ATTORNEYS GENERAL REACH SETTLEMENT WITH GLAXOSMITHKLINE AND SB PHARMCO OVER SUBSTANDARD PHARMACEUTICAL MANUFACTURING

$40.75 Million Settlement includes $995,531 for Massachusetts

BOSTON - Attorney General Martha Coakley along with 37 other state Attorneys General have reached a $40.75 million settlement with drug manufacturer GlaxoSmithkline, LLC (GSK) and SB Pharmco Puerto Rico, Inc. (SB Pharmco) arising from allegations that the companies used substandard manufacturing processes at their plant in Cidra, Puerto Rico.

In a complaint filed today with the settlement agreement, Attorney General Coakley alleges that GSK and SB Pharmco manufactured and distributed certain lots of Kytril (a sterile drug used to prevent nausea and vomiting caused by cancer chemotherapy and radiation therapy), Bactroban (an antibiotic ointment used to treat skin infections), Paxil CR (the controlled release formulation of the antidepressant drug, Paxil), and Avandamet (a combination Type II diabetes drug) that were adulterated because the manufacturing processes used to produce these lots were substandard. GSK and SB Pharmco are no longer manufacturing drugs at their Cidra facility, which has been closed since 2009.

"Substandard manufacturing practices create the risk that consumers will receive unsafe or ineffective drugs," Attorney General Coakley said. "This settlement helps strengthen the Commonwealth's efforts to protect consumers from potential harm."

Under the terms of the agreement, GSK and SB Pharmco will pay the Commonwealth $995,531. A total of $985,000 will be used to fund programs that lower health care costs for Massachusetts residents, combat unlawful marketing practices in the health care market, or otherwise benefit Massachusetts consumers. The payment also includes $10,000 for attorneys' fees and investigative costs.

As a result of the settlement, GSK and SB Pharmco are prohibited from making deceptive claims regarding the manufacturing of all drugs formerly manufactured at the Cidra facility regardless of where these drugs are now produced. Consumers should note that the adulterated batches have been recalled for many years and/or the products' expiration dates have past. If consumers have concerns they should contact their health care provider.

Last October, AG Coakley recovered $8 million for the state's Medicaid program from GSK to resolve allegations that the Cidra facility had experienced pervasive and systemic failures, which caused it to be out of compliance with FDA standards.

Joining Massachusetts in today's settlement are: the District of Columbia, Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii , Idaho, Illinois, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Missouri, Montana, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia and Wisconsin.

Assistant Attorney General Sarah Ragland of Attorney General Martha Coakley's Health Care Division handled the case for the Commonwealth

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