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GSK to Pay $750 Million for Sale of Adulterated Drugs

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By Tanya Roth, Esq. on October 28, 2010 9:48 AM

The whistleblower whose actions led to a major settlement payment by GlaxoSmithKline will sleep well, knowing she did the right thing. Cheryl Eckard is also eligible to be compensated under the False Claims Act, and will receive $96 million of the $750 million the British pharmaceutical giant has agreed to pay.

GSK will pay the settlement amount and plead guilty to one criminal charge due to manufacture of adulterated drugs in its Puerto Rico facility. The charges focused on the drugs manufactured at GSK's plant in Cidra, Puerto Rico,The Wall Street Journal reports. From 2001 to 2005, the anti-depressants made there were found by federal authorities to have been prepared with incorrect amounts of the active ingredient or would split apart, posing a safety risk to patients taking the medication.

The whistleblower in the case was GSK's former quality-assurance manager Cheryl Eckard, reports The New York Times. Eckard was sent to the Puerto Rico plant to address problems cited in a warning letter from the FDA. However, instead of fixing the many quality control issues found by Eckard, such as a contaminated water system and an air vent allowing cross-contamination between products, GSK fired her.

According to The Journal, Eckard filed a lawsuit against the company in federal court in Boston, claiming it had submitted false claims to government health programs because drugs manufactured at the Puerto Rico plant weren't safe and effective and thus shouldn't have been paid for under those programs.

Under the settlement, one GSK unit, SB Pharmco, has agreed to plead guilty to the criminal charge of releasing adulterated drugs into interstate commerce. Some of the other drugs listed in the settlement as "adulterated" include: Kytril, an anti-nausea medication, Bactroban, an anti-infective, and Avandamet, a diabetes drug.

Unusually for a company settling claims in this way, GSK did take some responsibility for its actions. According to The Times, GSK released a statement saying that it regretted operating the Puerto Rico plant in violation of good manufacturing practices. The company said the problem had involved only that one plant, which was closed in 2009.

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