GlaxoSmithKline and its subsidiary SB Pharmco have agreed to pay $750 million to resolve criminal and civil allegations relating to the manufacturing and sale of certain adulterated drugs made at the company's shuttered facility in Cidra, Puerto Rico. According to the Justice Department, it is the fourth largest amount ever paid by a pharmaceutical company to the U.S.
GSK agreed to pay $150 million to settle criminal charges and $600 million in civil penalties, according to U.S. Attorney Carmen Ortiz, the Boston Herald reports. The company allegedly sold 20 drugs with questionable safety made at the Puerto Rico plant. Cheryl Eckard, the company's quality manager, asserts in a whistleblower suit that she warned GSK, which fired her instead of addressing the problems, the New York Times reports. Affected drugs included Avandia, Coreg and Paxil. The plant was closed in 2009 due to declining demand for the medicines made there. GSK no longer owns the facility, according to a company statement.
"This settlement resolves a significant and long-standing legal issue facing the company," PD Villarreal, GSK's senior VP and head of global litigation, says in the statement. "We regret that we operated the Cidra facility in a manner that was inconsistent with current Good Manufacturing Practice (cGMP) requirements and with GSK's commitment to manufacturing quality."
"[A]t the end of the day, consumers have the right to rely upon the claims that drug companies make about the products they sell. And that is why, when it comes to the sort of conduct at issue here, we will hold pharmaceutical companies accountable. That's what we've done today with this $750 million resolution," Assistant Attorney General Tony West said during a conference announcing the settlement.
"This case is a game-changer because it signals that the U.S. Department of Justice is going to join cases that deal with manufacturing violations. We know there are other big cases out there that fit this model, and we have just seen a new front open up in the war on fraud," says Patrick Burns of Taxpayers Against Fraud, a non-profit that supports whistleblower lawsuits, as quoted by Pharmalot. "This relator did not bring a single case to the U.S. Department of Justice--she brought a whole new way of thinking and whole new pattern of criminal conduct."