SB Pharmco Puerto Rico Inc., a subsidiary of
GlaxoSmithKline, PLC (GSK), will pay big money to resolve problems at its
now-closed Cidra, Puerto Rico, manufacturing facility.
According to the Justice Department (DOJ), the
pharmaceutical giant will plead guilty to charges relating to the manufacture
and distribution of certain adulterated drugs made at the plant. The resolution
includes a criminal fine and forfeiture totaling $150 million and a civil
settlement under the False Claims Act and related state claims for $600
million.
Adulterated drugs
The drugs, manufactured at the plant between 2001and 2005,
are Kytril, Bactroban, Paxil CR and Avandamet. Kytril is a sterile anti-nausea
medication. Bactroban is a topical anti-infection ointment commonly used to
treat skin infections. Paxil CR is the controlled release formulation of the
popular anti-depressant drug, Paxil, and Avandamet is a combination Type II
diabetes drug.
The Food, Drug and Cosmetic Act (FDCA) prohibits the
introduction or delivery for introduction into interstate commerce of any drug
that is adulterated. Under the FDCA, a drug is deemed adulterated if the
methods used in, or the facilities or controls used for, its manufacturing,
processing, packing or holding did not conform to or were not operated or
administered in conformity with current good manufacturing practice to assure
that such drug met the requirements as to safety and had the identity and
strength, and met the quality and purity characteristics, which it purported or
was represented to possess.
The criminal information alleges that SB Pharmco's manufacturing
operations failed to ensure that Kytril and Bactroban finished products were
free of contamination from microorganisms. DOJ also contends that SB Pharmco's
manufacturing process caused Paxil CR two-layer tablets to split.
The splitting, which the company itself called a
"critical defect," caused the potential distribution of tablets that
did not have any therapeutic effect and tablets that did not contain any
controlled release mechanism.
The criminal information also alleges that Avandamet tablets
manufactured by SB Pharmco did not always have the Food and Drug Administration
(FDA)-approved mix of active ingredients, and, as a result, potentially
contained too much or too little of the ingredient with the therapeutic effect.
Finally, the Cidra facility is said to have suffered from
longstanding problems of product mix-ups, which caused tablets of one drug type
and strength to be commingled with tablets of another drug type and/or strength
in the same bottle.
Plea agreement
SB Pharmco has agreed to plead guilty to a criminal felony
for releasing into interstate commerce adulterated Kytril, Bactroban, Paxil CR
and Avandamet, in violation of the FDCA.
Under the plea agreement, the company will pay a criminal
fine of $150 million, which includes forfeiting assets of $10 million. The
guilty plea and sentence is not final until accepted by the U.S. District Court
in Boston.
Under the civil settlement, GSK has agreed to pay an
additional $600 million to the federal government and the states to resolve
claims that it caused false claims to be submitted to government health care
programs for certain quantities of adulterated Kytril, Bactroban, Paxil CR and
Avandamet.
The United States contends that GSK sold certain batches,
lots or portions of lots of drugs, the strength of which differed materially
from, or the purity or quality of which fell materially below, the strength,
purity or quality specified in the drugs' FDA applications or related
documents. GSK thereby knowingly caused false and/or fraudulent claims to be
submitted to, or caused purchases by, Medicaid and the other federal health
care programs, the government said.
The federal share of the civil settlement amount is
$436,440,000, and GSK will pay up to $163,560,000 to states that participate in
the agreement.
"Adulterated drugs undermine the integrity of the FDA's
approval process, can introduce substandard or ineffective drugs on to the
market and, in the worst cases, can potentially put patients' health at
risk," said Tony West, Assistant Attorney General for the Civil Division
of the Department of Justice. "We will continue to work with our law
enforcement partners to hold pharmaceutical companies accountable for this type
of conduct and protect taxpayers from fraud, waste, and abuse."
Whistleblower award
The civil settlement resolves one lawsuit filed in federal court in the District of Massachusetts under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. As part of today's resolution, the whistleblower -- Cheryl Eckard -- will receive approximately $96 million from the federal share of the settlement amount.
