The DOJ reported today that SB Pharmco Puerto Rico Inc., a subsidiary of GlaxoSmithKline, pleaded guilty to False Claims Act charges and agreed to a fine totaling $750 million. The total includes a criminal fine of $150 million and a civil False Claims Act fine of $600 million.
This case represents the first time the False Claims Act has been used to combat violations of FDA manufacturing standards. SB Pharmco allegedly manufactured and distributed four adulterated drugs: Kytril (anti-nausea medication used by cancer patients), Bactroban (topical lotion used for skin infections in babies), Paxil CR (anti-depressant), and Avandamet (diabetes medication) between 2001 and 2005. Among the charges set forth in the complaint include the following:
• Failure to insure that Kytril and Bactroban were free of contamination from microorganisms before distribution
• Defective manufacture of Paxil CR, causing the tablets to split and result in some tablets without therapeutic effects and others without the controlled release mechanism
• Avandamet tablets were manufactured without the FDA-approved mix of active ingredients
• Product mix-up occurrences in which tablets of one drug type and strength were intermixed with tablets of another drug type and/or strength in the same bottle
The suit was initially brought as a qui tam suit by a whistleblower Cheryl Eckard, who will receive approximately $96 million from the federal share of the settlement amount. As the New York Times reports, a criminal investigation of corporate officials remains ongoing.