GSK Pays Big

Ending a major case in a spate of U.S. government actions against drug manufacturers, GlaxoSmithKline will plead guilty and pay $750 million to settle civil and criminal complaints that it knowingly marketed adulterated products made at a plant in Cidra, P.R., between 2001 and 2005.

The drugs involved include Kytril, a nausea treatment; Paxil CR, an antidepressant; Bactroban, an anti-infective ointment; and Avandamet, a diabetes drug. The plant closed in 2009.

The company will pay a $150 million criminal fine that covers violations of FDA’s current Good Manufacturing Practices (cGMP). Among the violations were the packaging of drugs of different types and strengths in the same bottle and failure to ensure that finished products were free of contamination.

A $600 million civil settlement resolves claims that GSK sold drugs at variance with FDA standards for purity and strength and caused false documents to be filed with government health care programs. The civil settlement also resolves a lawsuit brought by Cheryl Eckard, a former GSK quality manager, under the whistle-blower provision of the Justice Department’s False Claims Act. Eckard will receive $96 million.

“We regret that we operated the Cidra facility in a manner that was inconsistent with cGMP requirements,” says Elpidio (PD) Villarreal, GSK’s head of global litigation. The company notes that it has not received an FDA warning since the one at the Cidra plant in 2002.

Denise Smart, a regulatory compliance expert and cofounder of Smart Consulting Group, says she has noticed a distinct increase in the number of FDA warning letters issued in recent months. “And I have not seen anything like the GSK settlement, where the government is bringing both criminal fines and civil penalties for cGMP violations,” she says. “They are taking cGMP enforcement to a new level.”

Earlier this year, Genzyme signed a consent decree with the U.S. to correct quality problems uncovered in its Allston, Mass., plant. More recently, Bristol-Myers Squibb received a warning from FDA for cGMP noncompliance at its Manati, P.R., site.