Settlement unveils fed's leash on Glaxo manufacturing

For the last two years leading up to last week's extensive settlement with U.S. authorities, GlaxoSmithKline ($GSK) already has been operating under an agreement that gives the Office of Inspector General in the Department of Health and Human Services broad authority over its manufacturing processes. The requirements are in addition to any company's usual obligations to the FDA and the agreement lays out a financial price tag if the U.K. company runs afoul of it.

The provisions of the agreement are tied to deep problems at GSK's Cidra, Puerto Rico plant, which was closed in 2009. The problems, which included using tainted water in processes and mixing products in packaging, came to light  in the whistleblower lawsuit brought by Cheryl Eckard, a former quality assurance manager with GSK. In October 2010, GSK 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 details of the compliance program have now been made public and became Appendix D to the Corporate Integrity Agreement GSK signed as part of its $3 billion settlement announced last week.

"This is the first time that the government, as part of a Corporate Integrity Agreement, has required a pharma company to establish a formal program to provide ongoing oversight, including Board oversight, of product released to the market to ensure that it is not adulterated," Lesley Ann Skillen, a partner in the law firm of Getnick & Getnick, who settled a related whistleblower case against Glaxo in 2010, says in an email.

The oversight program is run through the "Global Manufacturing and Supply business unit" (GMS) and essentially applies to all of its manufacturing operations and employees globally. It is centered at GSK's plant in Zebulon, NC, because employees there "are responsible for the release and post-release management of all Covered Products" manufactured by the company.

The program establishes a code of conduct, which employees are schooled in and must sign. It is overseen by a "GMS compliance officer" that can't be the CFO or the General Counsel of the company or subordinate to them. The compliance officer and the president of the GMS unit are the co-chairs of a compliance committee that meets quarterly to make sure the company is meeting all of its obligations. They report at least quarterly to the GSK board of directors. Board members then must sign agreements that are sent to the inspector general that the company is complying with all cGMP requirements or explain why not. The agreement also permits the FDA to complain to the inspector general if the agency believes GSK is not adequately responding to its directives.

The Cidra plant was closed in 2009, 7 years after Eckard first complained to her superiors about a host of problems. In an interview last year with CBS 60 Minutes, Eckard said, "All the systems were broken, the facility was broken, the equipment was broken, the processes were broken. It was the worst thing I had run across in my career." She said tainted water was used in manufacturing, production lines were turning out too-potent or not-potent-enough drugs, employees were contaminating products and different medications were packed into the same bottles.

In her email, Skillen points out, "When Cheryl Eckard reported her concerns about the Cidra plant to the compliance department in 2003, they covered it up. If GSK were to do that now, it could face exclusion from Medicare and Medicaid under this CIA. That should provide a powerful incentive for GSK to do heed warnings they receive from their own employees. That's why it's an important document for GSK and an object lesson for the industry: ignore whistleblowers at your peril."

The GSK agreement may have served as a blueprint for the 5-year consent decree that Ranbaxy Laboratories announced earlier this year to settle manufacturing and data reporting problems found at three of its plants in India. 

- Appendix D can be found in the Corporate Integrity Agreement (PDF)

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