North Carolina receives $1.2M in GlaxoSmithKline drug case

GSK will pay $40.75 million to 38 states to settle a drug safety case that stems from a whistleblower case that led to a $750 million settlement by the drug giant with the federal government.

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RALEIGH, N.C. — 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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