North Carolina receives $1.2M in GlaxoSmithKline drug case

Posted June 23, 2011

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— GlaxoSmithKline (NYSE: GSK) will pay the state of North Carolina $1.2 million as part of a settlement linked to a whistleblower case about unsafe drug manufacturing.

NC Attorney General Roy Cooper announced the deal Thursday.

GSK agreed to pay $40.75 million to NC and 37 other states.

Last October, GSK, which operates its North American headquarters in Research Triangle Park, agreed to pay the federal government $750 million to settle the whistleblower case.

The federal investigation that led to the settlements focused on sub-par drugs produced at manufacturing at a former GSK plant in Cidra, Puerto Rico.

“Consumers depend on medication to be safe and reliable, and quality manufacturing is key,” Cooper said.

The state attorney generals in the case said GSK and SB Pharmco, a GSK subsidiary, “engaged in unfair and deceptive practices.”

The drugs involved were: Kytril, a nausea drug; Bactroban, an antibiotic ointment; Paxil CR, an antidepressant; and Avandamet, a diabetes treatment. The drugs were call reclalled.

“GSK and SB Pharmco are barred by today’s settlement from making false, misleading or deceptive claims regarding the manufacturing of the drugs at issue, regardless of where they are now produced,” Cooper’s office added in a statement. “In addition, the companies must not misrepresent the drugs’ characteristics, or create confusion or misunderstanding about the way in which they are manufactured.”

In October, GSK settled with the federal government after an insider investigation triggered by complaints by former GSK employee Cheryl Eckard. Eckard worked in RTP.

Eckard, the company's global quality assurance manager, went to the plant in August 2002 to lead a team of scientists and quality experts to correct manufacturing violations cited by the FDA.

Eckard discovered numerous violations, including a contaminated water system and an air system that allowed for cross-contamination between different products being made there. She reported the problems to her superiors and the company's compliance department, her lawyers said.

Eckard eventually went to the Food and Drug Administration to report the problems and later filed a whistleblower lawsuit.

Eckard said she was fired in 2003 after repeatedly reporting the problems to the company.

"This is not something I ever wanted to do, but because of patient safety issues, it was necessary," she told reporters after the settlement was announced Tuesday.

As a whistleblower under the federal False Claims Act, Eckard received $96 million of the settlement paid by the company.

The $600 million civil penalty was to be paid to the federal government and the states to cover false claims submitted to the Medicaid program and other health care programs.

U.S. Attorney Carmen Ortiz announced that GSK would pay $150 million in criminal fines and $600 million in civil penalties related to faulty manufacturing processes at its plant.

The Associated Press contributed to this report.


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  • artofcode Jun 24, 2011

    "why on earth would our lawmakers allow US DRUG products be manufactured outside the US and brought into the US to be sold?"
    - howdiditgettothis

    Last time I checked, Puerto Rico was part of the US.

  • michaelj1492 Jun 23, 2011

    Pay the legal fees and keep a teacher job.

  • TimeWillTell Jun 23, 2011

    Next thing for Big Pharma is moving more operations to China.

    Not to say anything about more jobs lost... but I, um, have concerns about Chinese drugs when they've sold drywall that corrodes metal and kids' toys that contain toxic/carcinogenic materials... let alone the baby formula that sickened and killed children there.

    To others' comments about the demise of a once-fine company: so true. But the current state of economy and the events leading up to it demonstrate clearly that huge percentage of "executives" will figuratively sell their daughters for money.

    And to those who say the fine will only cause drug prices to rise: so, by that reasoning, Britain's concessions to Hitler in 1940 should have succeeded in avoiding war, right?

  • snickers27588 Jun 23, 2011

    iron fist, What do you think of falsification of records for over two years and when it's proven the manager throws the evidence away? I wonder how the sick people feel who are getting these contaminated drugs?

  • Mad Dawg Jun 23, 2011

    It likely cost the State more than $1.2M it received just to pursue the case. Way to go AG Roy Cooper!!! Have a lolly pop.

  • howdiditgettothis Jun 23, 2011

    Another thought - why on earth would our lawmakers allow US DRUG products be manufactured outside the US and brought into the US to be sold?

    In the early 80's and before -- pharmaceuticals that were sold here were made here.

    Now you have 3 to 5 global conglomerates who make everything in 3rd world countries, and have no accountability for the garbage they churn out.

  • howdiditgettothis Jun 23, 2011

    Yeah - take that GSK.

    Outsource production to make yourself more money & look where it got you.

    A bunch of overpaid execs and FDA fines.

  • daveinnc67 Jun 23, 2011

    As a whistleblower under the federal False Claims Act, Eckard received $96 million of the settlement paid by the company.

    She did the right thing, BUT $96 million.

  • whatelseisnew Jun 23, 2011

    Good, when can I expect to get my share of that money.

  • RB aka Spirit Warrior Woman Jun 23, 2011

    beachlvr0804 - "Makes you wonder what other drugs are subpar......a bunch I bet. It's all about their bottom line. Good drugs or bad drugs........ Shame on them."

    And believe me, they were in line complaining about the sale of generic drugs as unsafe while they were manufacturing questionably safe drugs themselves.