GSK - Cheryl Eckard speaks

Carolina native Cheryl Eckard came to the federal courthouse in Boston on Tuesday and left $96 million richer -- her share as a company whistleblower of a $750 million penalty paid by GlaxoSmithKline over a subsidiary's drug-manufacturing lapses in Puerto Rico.
 
"I'm a little emotional, so you'll have to forgive me for that,'' Eckard, 51, who grew up near Raleigh, said as she spoke to reporters after federal officials announced the penalty. "This is not something I ever wanted to do.''
 
Yes, she is now a multimillionaire -- but after the former Glaxo quality-assurance manager complained repeatedly to superiors about drug plant lapses at a manufacturing site she oversaw in Cidra, Puerto Rico, she got fired in June 2003. Represented by attorneys Neil V. Getnick and Leslie Ann Skillen of Getnick & Getnickin New York, she's been fighting ever since 2004 in court until GlaxoSmithKline finally agreed Tuesday to plead guilty and pay the $750 million in fines, penalties, and settlements. The Getnick firm believes Eckard's award is the single-biggest U.S. whistleblower award in history.
 
"I think it's very, very difficult to survive this,'' Eckard said. "It's difficult to survive this financially, emotionally, you lose all your friends, because all your friends are people you have at work.'' But she added: "You really do have to understand that it's a very difficult process, but very well worth it.''
 
The $750 million and guilty plea from Glaxo resolve allegations that drugs made at its former SB Pharmco Puerto Rico plant -- including a controlled-release version of its antidepressant Paxil and Type II diabetes treatment Avandamet -- may have been contaminated or made above or below the properly calibrated dosage.
 
"We will not tolerate corporate attempts to profit at the expense of the ill and needy in our society,'' said Carmen Ortiz, U.S. Attorney for Massachusetts, at a press event Tuesday announcing the resolution. She said the government was not aware of anyone getting sick because of the Glaxo drugs in question, but said it was critical to sound a strong message that the government will not tolerate any lapses in safety standards for pharmaceutical manufacturers.
 
Highly profitable GlaxoSmithKline manufactured hundreds of millions of dollars worth of pharmaceuticals at the Cidra plant between 2001 and 2005, the time period covered by the legal actions. So I asked Ortiz how the $750 million penalty compared to Glaxo's net income -- in other words, could wrongdoing have turned out to be on net profitable? "The fine is significantly higher than the profits that were made by the company,'' Ortiz said, not offering any more specific numbers.
 
Glaxo had disclosed on July 15 was taking a $750 million charge in anticipation of the fine. GSK senior vice president P.D. Villarreal said in a statement: "We regret that we operated the Cidra facility in a manner that was inconsistent with current Good Manufacturing Practice requirements and with GSK's commitment to manufacturing quality.  GSK worked hard to resolve fully the manufacturing issues at the Cidra facility prior to its closure in 2009 and we are committed to continuous improvement in our manufacturing processes.  Our commitment to compliance with cGMP is demonstrated by the fact that we have not received an FDA warning letter at any plant since the Cidra facility was cited in July 2002.''
 
While $750 million is an eye-popping sum for a company to pay after a government legal action, it's not the biggest pharma fine in U.S. history, or the second, or the third -- but the fourth, according to Tony West, assistant U.S. attorney general in the civil division. The biggest is the $2.3 billion Pfizer agreed to pay in the summer of 2009 for improperly marketing Pfizer drugs as treatments not authorized by the government. 
 
Cheryl Eckard hopes for all she's lost -- and won -- she may inspire others who see lapses to fight for what's right. "You have to believe in your heart this this is the right thing ... In my case, I was very, very concerned about patient safety.''
 
Her giant payday came about from a law dating to the days of Abraham Lincoln, the False Claims Act, which allows private citizens who know of fraud on the government -- in this case, government health programs paying for Glaxo drugs that turned out to be impure or sub-potent or with improperly calibrated dosages -- to sue and if their charges, reap typically 15 to 20 percent of what the government recoups. Whistleblower laws current also encourage private citizens to get involved in -- and get bounties for -- government prosecutions of tax, securities, and commodities fraud, and other kinds of fraud against federal and state government agencies.
 
Several states are sharing in the $750 million, including Massachusetts, which will get $8 million for its Medicaid program from Glaxo, according to state Attorney General Martha Coakley.