Glaxo to pay out $750m over impure drugs lawsuit - The Independent

GlaxoSmithKline plc has agreed to pay $750m (£473m) and plead guilty to manufacturing and distributing adulterated drugs from a now closed plant in Puerto Rico, the US Justice Department said yesterday.

The company had said in July it reached an agreement in principle relating to quality problems at its SB Pharmco Puerto Rico Inc plant and would pay about $750m to resolve the allegations.

Of the $750m, Glaxo will pay $600m to settle allegations that, because the drugs were adulterated, false claims for reimbursement were submitted to government healthcare programmes.

The drugs – which included the anti-nausea medicine Kytril, skin ointment Bactroban, anti-depressant Paxil-CR and diabetes drug Avandamet – were made at the plant between 2001 and 2005.

The company was accused of failing to ensure the drugs were properly manufactured at the plant and thus effective.

Under the plea agreement, SB Pharmco Puerto Rico will plead guilty to a felony of releasing adulterated medicines and pay a $150m criminal fine that includes forfeiture of $10m in assets.

A whistleblower who filed a lawsuit under the US False Claims Act will receive about $96m from the federal share of the settlement, the Justice Department said.

via independent.co.uk

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Federal authorities were first alerted to the problems at the facility by one of the company's quality managers, Cheryl Eckard.

But when she tried to raise her concerns with senior managers at Glaxo , she was fired.