Glaxo to pay out $750m over impure drugs lawsuit
Wednesday 27 October 2010
In a rare public humiliation for a British company in the United States, GlaxoSmithKline last night formally agreed to pay $750m (£473m) to settle criminal and civil complaints stemming from a whistleblower's revelations about a shockingly degraded factory in Puerto Rico.
The case dates back to the 2003 sacking of a quality manager after she found grave shortcomings at a factory in Puerto Rico. The manager, Cheryl Eckard, warned she would retaliate by reporting what she had found to the US authorities.
What followed was an aggressive investigation by the Federal Drugs Administration that involved the seizure of medicines worth $2bn (£1.26bn), the largest such confiscation in history. The plant at Cidra was closed down last year as a consequence of the probe. Drugs affected were Avandia, Paxil – a popular anti-depressant – and Tagamet.
Ms Eckard found problems at the factory ranging from the wrong pills going in the wrong bottles, a contaminated water supply, the use of rented vans for storage and a failure to ensure the sterility of anti-cancer IV drugs.
GSK was charged with knowingly selling contaminated goods.
Ms Eckard will receive $90m (£56.8m) of the money, a reward which is likely to encourage others to reveal similar malpractice.
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