In October 2010, 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 in 2004 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 resolves charges that GSK released to the market from its plant in Cidra, Puerto Rico, Bactroban ointment, a topical antibiotic used to treat skin infections in babies, that contained microorganisms and Kytril injection, an anti-nausea drug used by cancer patients, that was not sterile. The settlement also covers the release of Paxil CR tablets that lacked the active ingredient and Avandamet tablets that were superpotent and subpotent. Paxil CR is an anti-depressant and Avandamet is a derivative of the diabetes drug Avandia. GSK also paid a criminal fine of $150 million.
In August 2002, 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” in May 2003, Ms. Eckard urged GSK managers to take decisive action at Cidra, including shutting down the plant. She made a full report to the GSK Compliance Department, but GSK took no action. In October 2003 she reported to the FDA in San Juan, which executed search warrants. Her qui tam suit, filed in February 2004, 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 with microorganisms, and a host of other manufacturing and quality testing problems.
In February 2005, the FDA seized all stocks of two Cidra drugs, Avandamet and Paxil CR, in the largest seizure in FDA history. The FDA also placed the Cidra plant under a Consent Decree, requiring that all products released to the market be approved by an independent monitor. The Cidra plant closed in 2009.
The Department of Justice awarded Ms. Eckard $96 million of the federal portion of the recovery. This is the largest reward for a single whistleblower in US history. She will receive additional rewards from the states.
- Third Amended Complaint
- Settlement Agreement
- Criminal Information
- DOJ Press Release
- Getnick & Getnick Press Release
- 60 Minutes, “Bad Medicine”
- The New York Times, “Glaxo to Pay $750 Million for Sale of Bad Products”
- Bloomberg News, “Glaxo Agrees to Pay $750 Million to Settle Defective Drug Suit”
- CBS News, “GlaxoSmithKline to Pay $750M for Tainted Pills”
- The Guardian, “GlaxoSmithKline whistleblower awarded $96m payout”
- The Wall Street Journal Law, “The Story Behind the $96M Whistleblowing Recovery”
- The Daily Mail, “Drug company GlaxoSmithKline to pay £475m over adulterated drug claim”