Deviations attract investor lawyers

Lawyers are providing a non-regulatory reason for manufacturers to comply with good manufacturing practices. "The rules haven't changed. GMPs are GMPs," says Philip Katz, a partner at Hogan & Hartson. "What's changed are the stakes for noncompliance."

When the FDA looks at safety issues, it has to weigh protecting the public versus prematurely scaring people, says Katz. In the past, the regulator may have been more inclined to keep a problem confidential. That's changed under the leadership of commissioner Margaret Hamburg.

"Now it's more likely to make something public," he says. That's a factor for manufacturers to consider in what may be an unconventional form of risk management: They should consider the likelihood of the FDA discovering any corner-cutting deviation and the likely consequences.

Katz sees more GMP-deviation cases garnering FDA objections. In a recent report, "The Top 12 GMP Violations," we've outlined representative cases in which the FDA has issued warning letters.

Increasingly, each is a potential investor lawsuit. "Stepped up enforcement leads to more class action suits by investors, and also to product liability cases," Katz says.

Caraco and Genzyme have recent first-hand experience. In both cases, GMP deviations have prompted warning letters. Investors hearing of the warnings initiated class-action lawsuits claiming the company misled them by running sub-par manufacturing operations.

- here's the Top 12 GMP Violations

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