The pharmaceutical group also admitted to bribing doctors.
Glaxo was also expected to admit to failing to report safety problems with the diabetes drug Avandia in a district court in Boston in the United States on Thursday.
The company encouraged sales representatives in the US to mis-sell three drugs to doctors and lavished hospitality and kickbacks on those who agreed to write extra prescriptions, including trips to resorts in Bermuda, Jamaica and California.
The company admitted to corporate misconduct over the antidepressants Paxil and Wellbutrin and asthma drug Advair.
Psychiatrists and their partners were flown to five-star hotels, where speakers, paid up to $2500 to attend, gave presentations on the drugs.
Glaxo also paid for articles on its drugs to appear in medical journals and “independent” doctors were hired to promote the treatments, according to court documents.
Paxil – which was approved only for adults – was promoted as suitable for children and teenagers by the company despite trials that showed it was ineffective, according to prosecutors.
Glaxo held eight lavish three-day events in 2000 and 2001 at hotels in Puerto Rico, Hawaii and Palm Springs, California, to promote the drug to doctors for unapproved use.
Those who attended were given $750, free board and lodging and access to activities including snorkelling, golf, deep-sea fishing, rafting, glass-bottomed boat rides, hot-air balloon rides and, on one trip, a tour of the Bacardi rum distillery, all paid for by Glaxo.
Not everyone was impressed, though. One psychiatrist complained: “The style of the conference would have been suitable for a convention of cosmetics sales reps.”
Glaxo also published an article in a medical journal that misstated the drug’s safety for children, despite the journal asking several times for changes to the wording.
Copies of the misleading article were given to sales representatives to pass on to doctors in the hope that it would secure more business. Despite knowing that three trials had failed to prove its effectiveness in children, Glaxo published a report titled “Positioning Paxil in the adolescent depression market”.
The second drug to be missold was Wellbutrin, another antidepressant aimed only at adults.
The prosecution said the company paid $275 000 to Dr Drew Pinsky, who hosts a popular radio show, to promote the drug for unapproved uses in particular. Glaxo claimed it could treat weight gain, sexual dysfunction, attention-deficit hyperactivity disorder and bulimia.
Pinsky, who had not declared his income from Glaxo to listeners, said Wellbutrin could explain why a woman had 60 orgasms in a night. When a Glaxo-funded doctor refused to remove the safety concerns about the drug from an article he was writing, Glaxo removed his funding.
The investigation also found that sales representatives had set up an “operation hustle” to promote the drug to doctors, including trips to Jamaica, Bermuda and one talk coinciding with the annual Boston Tall Ships flotilla.
The last drug under scrutiny was Advair, Glaxo’s asthma treatment.
The ultimate answer
The drug was launched to sales representatives in Las Vegas using images of slot machines, emphasising the bonuses they could make through sales. At the event, the then chief executive Jean-Pierre Garnier said: “What is the number one reason you should love to be a Glaxo sales rep? Advair’s bonus plan.”
The company pushed the drug as the ultimate answer to asthma. However, it had been approved for only severe cases, as other drugs were more suitable for mild asthma. To boost sales, Glaxo published material calling mild asthma a “myth”, according to the prosecution.
Glaxo chief executive Andrew Witty said: “Whilst these [matters] originate in a different era, they will not be ignored. On behalf of GlaxoSmithKline I want to express our regret and reiterate that we have learnt from the mistakes.”
Despite the large fine, $3-billion is far less than the money made from the drugs. Avandia has made $10.4-billion in sales, Paxil took $11.6-billion and Wellbutrin sales were $5.9-billion during the years covered by the settlement, according to drug consultant IMS Health. – © Guardian News & Media 2012