GlaxoSmithKline Whistleblower Lawsuit Leads to $750M Settlement

GlaxoSmithKline has agreed to pay $750 million to resolve civil and criminal charges that the drug maker sold Medicaid and other government health plans adulterated products, including Avandamet and Paxil.

The settlement came as a result of a GlaxoSmithKline whistleblower lawsuit originally filed in 2004 over violations of government manufacturing standards at a facility in Cidra, Puerto Rico run by its subsidiary SB Pharmco.

GlaxoSmithKline will pay a $150 million criminal fee, $600 million in civil penalities and admit guilt. The whistleblower who brought the case to the government’s attention, Cheryl Eckard, will receive an estimated $96 million of that settlement.

Under the qui tam provision of the False Claims Act, whistleblowers who report a false claim against the government may be entitled to receive a portion of any money that the government recovers from the offenders. In return, the whistleblower must be the first to bring the case to the government’s attention, and must not publicize the claim until the DOJ decides to prosecute the claim.

Eckard is a former global quality assurance manager for GlaxoSmithKline. She alleged in her lawsuit against the company that she saw problems with the facility and brought it to the attention of the company, at which point she was fired and the problems went unaddressed. 

FDA investigators began citing the plant for quality control problems in 2002, and in 2005, the factory was raided by U.S. Marshalls. Federal investigators said Glaxo was ignoring public health standards with the deplorable conditions at the factory, which was shut down last year. The factory is no longer owned by GlaxoSmithKline.

Some of the problems at the plant included defective Paxil CR tablets that could incorrectly deliver drug dosage, knowingly selling a topical antibiotic, Bactroban, that may have been contaminated, and failing to take action on Avandamet pills whose ingredients were not uniformly blended properly.

“We regret that we operated the Cidra facility in a manner that was inconsistent with current Good Manufacturing Practice (cGMP) requirements and with GSK’s commitment to manufacturing quality,” said the Senior Vice-President PD Villarreal, head of global litigation, in a statement addressing the settlement.