GlaxoSmithKline Plc (GSK) agreed to pay $750 million to settle charges that the drug making giant sold contaminated anti-nausea medication and baby ointment made at a now-closed Cidra plant in Puerto Rico.

The company will pay $600 million in civil fines and $150 million in criminal fines, the U.S. Justice Department said in a statement Tuesday. As part of the settlement, Cheryl Eckard, a former employee, will receive $96 million. Eckard alleged that GlaxoSmithKline fired her instead of addressing the issues cited in the lawsuit.

The charges stem from allegedly adulterated drugs GlaxoSmithKline made at its Puerto Rico plant between 2001 and 2005. The company's antidepressant drug, Paxil, was allegedly found to have been made without any controlled-release mechanism, while anti-nausea medication Kytril and anti-infection ointment Bactroban may have been contaminated with microorganisms, according to the Justice Department.

"Adulterated drugs undermine the integrity of the FDA's approval process, can introduce substandard or ineffective drugs on to the market and, in the worst cases, can potentially put patients' health at risk," said Tony West, assistant attorney general for the Justice Department's civil division, in Tuesday's statement.

"We regret that we operated the Cidra facility in a manner that was inconsistent with current Good Manufacturing Practice requirements and with GSK's commitment to manufacturing quality," said PD Villarreal, GlaxoSmithKline's head of global litigation, in a separate statement Tuesday.

The company in July said it would take a $750 million charge to second-quarter earnings related to the settlement finalized today. In all, GlaxoSmithKline said it would record legal charges of more than $2 billion during the quarter largely because of lawsuits related to its Avandia diabetes medication. That product was alleged to have caused heart attacks and strokes.

GlaxoSmithKline shares were little changed at $40.17 in New York Stock Exchange trading today.


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seminoleagle

If you steal a pack of gum you will go to jail. if you threaten the health of millions of people you get a fine and resume making billions of dollars This is the underlying philosophy that is driving this country to ruin. The company's chief executives should do jail time.

October 27 2010 at 9:34 AM Report abuse +3 rate up rate down Reply
landskp4u

96 million is a bit much. She absolutley did the right thing and should be rewarded for that. But, her future lifetime earnings/bonuses x 2 or 3 would have been a fair reward for getting fired. How did they come up with the 96 million figure?

October 27 2010 at 9:22 AM Report abuse +1 rate up rate down Reply
tastadr

The fact that the company can settle legal charges for $150 million is wrong! What...the stock holders foot the bill for a get out of jail free card for criminals? There should be jail time for those culpable. Endangering peoples lives is a serious matter, and should be punished severely, to prevent such incidences in the future. Officers of the company that knowingly allowed this are taking a calculated risk of not getting caught, and if they do, stock holders will foot the bill, if not, they collect huge salaries for the profits they make, all the while risking the health and lives of others. There seems to be a double standard of justice in this country.

October 27 2010 at 9:20 AM Report abuse +3 rate up rate down Reply
1 reply to tastadr's comment
Sean

Corporate lawyers create the need for other lawyers. Jail time should be mandatory for these types of cases. They should not be abel to buy their way out. Someone goes to jail for smoking a joint? Stealing a gallon of milk? But, mess with people's prescriptions, and you pay some cash? Same thing for the Wall St. criminals. Jail time would definately cure their ills. Money will always be made by these people.

October 27 2010 at 11:01 AM Report abuse rate up rate down Reply
Big John

And the USA does not need health care reform? Fools!!!

October 27 2010 at 8:15 AM Report abuse +1 rate up rate down Reply
Brulio Torres

They will get the money to pay it from the gov. From tax money we pay.

October 26 2010 at 8:15 PM Report abuse +1 rate up rate down Reply
Jay

Isnt is great to see that our government gets the money rather than those who were hurt by the bad meds. Yes......Freedom.....The ability for your own government to screw you any whcih way it wants to without you getting the benefit of a lubricant!

October 26 2010 at 7:24 PM Report abuse +7 rate up rate down Reply
Wayne Ferguson

Well it is all about the money and our jobs!! Just pay the government off and get slapped on the hand. One of my family members lost their job due to this company going overseas. We can change this recession by starting up buisnesses that have gone overseas and putting people back to work. Send the lazy ones overseas and see how long they work.

October 26 2010 at 6:00 PM Report abuse +4 rate up rate down Reply
stftndoc

So, who gets the money? Looks like the government and the lawyers. How about the people who were supposedly harmed?

October 26 2010 at 5:43 PM Report abuse +3 rate up rate down Reply
Roger DeVries

When is someone going to go after the pharmaceutical companies that have destroyed peoples lives with statin drugs while all the time making billions in profits? The American people have been made to believe,the lie, that everyone should be taking a statin to lower cholesterol. It's a total rip-off; although some patients are helped while most are not!!

October 26 2010 at 5:29 PM Report abuse +5 rate up rate down Reply