GlaxoSmithKline pillsAfter years of American drugmakers touting the benefits of U.S. drugs and warning about buying cheaper drugs from somewhere else, a major U.S. drugmaker is admitting that some of its drugs may not have been so good after all.

In what was a revealing and embarrassing admission, GlaxoSmithKline agreed yesterday to pay $750 million to resolve criminal and civil charges that it improperly produced the anti-depressant drug Paxil CR, the topical antibiotic Bactroban, anti-nausea medicine Kytril and diabetes drug Avandamet at a since-closed Puerto Rico plant.

Justice Department officials said the drugs, produced by the company's SB Pharmco subsidiary from 2001 to 2005, weren't properly checked for strength, quality and purity and in at least one case there were indications of product mix-ups within drug bottles.

They added that the problems, first revealed in a whistle-blower lawsuit that the Justice Department took over, undermine the Food and Drug Administration's attempts to ensure U.S. drugs are safe and effective. As part of the settlement Pharmco agreed to plead guilty to a criminal felony for releasing adulterated drugs into interstate commerce.

"Whether drugs are contaminated during the manufacturing process, lack the proper mix of ingredients, or are mixed up and put in the wrong bottles, the consequences can be very real," Assistant Attorney General Tony West told a Boston news conference. "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. They can also lead to many millions of dollars in false claims against federal and state health care programs."

U.S. Attorney Carmen Ortiz said the drug industry "has an obligation to ensure that all rules, regulations and laws are complied with."

"To do less erodes public confidence and compromises patient safety. As this investigation demonstrates, we will not tolerate corporate attempts to profit at the expense of the ill and needy in our society -- or those who cut corners that result in potentially dangerous consequences to consumers," she said.

The criminal information filed against the company details some of the problems:
  • Two-layer Paxil CR tablets split in half because of a defect in manufacturing the company itself had identified as a "critical defect" because the resulting tablet could either have no therapeutic effect or no controlled lease mechanism.
  • Avandamet tablets didn't always have the correct mix of ingredients, leaving some tablets short of the drug key to effectiveness and other tablets with an oversupply of the same drug.
  • Both Bactroban and Kytril had contamination problems during manufacture and shipping.
  • The company failed to properly ensure the right medicines got into the right bottles, with the plant suffering from longstanding problems of product mix-ups, which caused tablets of one drug type and strength to be mixed with tablets of another drug type and strength in the same bottle.
The $750 million settlement includes a $150 million criminal fine and civil settlement to the federal government and $600 million in settlements with state attorneys general to settle charges that the company caused false claims to be submitted to government health care programs. Cheryl Eckard, the company quality manager who said she was fired after complaining about the problems and subsequently filed the whistle-blowing suit, will share in the recovery.

GlaxoSmithKline in a statement noted that the agreement finalized a previously reported agreement in principle and that the plant was closed in 2009 and has since been sold.

"This settlement resolves a significant and long-standing legal issue facing the company," said PD Villarreal, GSK's
Senior VP and head of global litigation. "We regret that we operated the facility in a manner that was inconsistent with current Good Manufacturing Practice requirements and with GSK's commitment to manufacturing quality."

He said the company hasn't received an FDA warning letter about manufacturing since the Puerto Rico plant was cited in 2002.

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