Pharmaceuticals  —  Adulterated Drugs

GlaxoSmithKline agreed to pay the government $750 million to settle civil and criminal charges that it manufactured and sold adulterated drug products to Medicaid and other government health plans. The settlement was the result of a qui tam suit filed by Getnick & Getnick LLP on behalf of Cheryl Eckard, a former Quality Assurance Manager with GSK.

This groundbreaking case represents the first time the whistleblower law has been successfully used to hold drug makers accountable for violations of manufacturing standards. The civil settlement of $600 million resolved charges that GSK released adulterated drugs from its plant in Cidra, Puerto Rico, including: Bactroban, a topical antibiotic used to treat skin infections in babies, that was contaminated; Kytril injection, an anti-nausea drug used by cancer patients, that was not sterile; Paxil CR tablets, for depression, that lacked the active ingredient; and Avandamet tablets, for diabetes, that were superpotent and subpotent. GSK also paid a criminal fine of $150 million.

Ms. Eckard, then a Global Quality Assurance Manager with GSK, learned of serious and systemic violations of manufacturing standards at the Cidra factory. Cidra was then GSK’s No. 1 factory in the world, making over 20 products worth $5.5 billion annually, including blockbuster drugs Avandia, Paxil and Coreg. From then until she was terminated for “redundancy,” Ms. Eckard urged GSK executives to fix the Cidra plant. She made a full report to the GSK Compliance Department, to no avail.  She then reported to the FDA in San Juan, leading to the execution of search warrants. Her qui tam suit included details about mixed-up products, super and subpotent diabetes drugs, an area of the factory used to make injectible drugs that was not sterile, air handling systems that misdirected the flow of product powders, a water system contaminated, and a host of other manufacturing and quality testing problems.

The FDA’s actions included the seizure of all stocks of two Cidra drugs, Avandamet and Paxil CR, the largest seizure in FDA history. The FDA also placed the Cidra plant under a Consent Decree, requiring third party oversight. The Cidra plant was subsequently closed.

The Department of Justice awarded Ms. Eckard $96 million of the federal portion of the recovery. This was the largest reward for a single whistleblower in US history.