GlaxoSmithKline Whistle-Blower Suit
11/10/2010 — GlaxoSmithKline, the British drug giant, has agreed to pay $750 million to settle criminal and civil complaints that the company for years knowingly sold contaminated drugs — the latest in a growing number of whistle-blower lawsuits that drug makers have settled with multimillion-dollar fines.
Cheryl D. Eckard, a former quality manager with GlaxoSmithKline, stated in her whistle-blower suit that she had warned Glaxo of the problems but the company fired her instead of addressing them. Among the drugs affected were anti-nausea medication Kytril, topical antibiotic Bactroban, antidepressant Paxil CR, and type 2 diabetes drug Avandamet. No patients were known to have been sickened, although such cases would be difficult to trace.
Whistle-blowers who win earn a cut of the eventual fine. Ms. Eckard will collect $96 million from the federal government, and she will collect additional millions from states.
Ms. Eckard discovered many quality control problems at the Cidra manufacturing plant in Puerto Rico, including pills of different strengths being mixed up in bottles, diabetes drugs with too much or too little of the clinically effective ingredient, a non-sterile area of the facility that was used for manufacturing injectable drugs, and a water system that was contaminated with microorganisms.
Although FDA inspectors had spotted some problems, many were missed. Ms. Eckard complained repeatedly to senior management but little was done. She recommended recalls of defective products but they were not authorized. In May 2003, she was terminated as a “redundancy.”
She complained to top company executives, but she was ignored even after warning that she would call the FDA. So she called the FDA and sued. The agency began a criminal investigation. GlaxoSmithKline closed the plant in 2009.
The case opens a new frontier for whistle-blower suits. Nearly all previous cases against the industry involved illegal marketing. This is the first successful case to assert that a drug maker knowingly sold contaminated products.
Suffering a research drought, drug makers have laid off thousands of employees. Some of those dispatched have in turn filed whistle-blower lawsuits that can lead to criminal investigations.
Pfizer alone has settled four whistle-blower cases since 2002 and it paid a $2.3 billion fine last year, the largest in history.