Pharma

GSK to pay $40M to settle states’ suits on sub-par drugs made in Puerto Rico

GlaxoSmithKline (NYSE:GSK) is paying more than $40 million to settle suits with 37 states and the District of Columbia that claimed the pharmaceutical giant sold drugs made in a Puerto Rico facility that failed to meet quality and purity standards. The state settlement follows the settlement last year of federal charges brought against London-based GSK, […]

GlaxoSmithKline (NYSE:GSK) is paying more than $40 million to settle suits with 37 states and the District of Columbia that claimed the pharmaceutical giant sold drugs made in a Puerto Rico facility that failed to meet quality and purity standards.

The state settlement follows the settlement last year of federal charges brought against London-based GSK, which has its U.S. headquarters in Research Triangle Park, North Carolina. GSK last fall agreed to pay $750 million to settle the federal suit.

GSK and subsidiary SB Pharmco no longer make drugs at the Cidra, Puerto Rico plant, which was closed in 2009 and has since been sold. GSK said that before the facility was sold, it was brought into FDA compliance. The company claims that plant was closed because of declining demand for the medicines made there.

The Cidra plant was the subject of a 60 Minutes story that aired in January headlined “Bad Medicine.” In that story, whistleblower and former RTP-based GSK quality control manager Cheryl Eckard described failing equipment, bacterial contamination and crossed production lines that got pills mixed up. It was Eckard’s tip to authorities that sparked the federal investigation.

Following the report, GSK issued a statement acknowledging that the plant was “inconsistent with GSK’s commitment to manufacturing quality.” But the company strongly denied any implications that patients were harmed as a result of issues with the plant.

In the state litigation, attorneys general had claimed that GSK engaged in unfair and deceptive trade practices in making and distributing drugs from the Cidra plant. GSK said in a statement that it chose to settle the matter to avoid the expense and uncertainty of a long trial. The company adds that the settlement does not mean the company admits to any wrongdoing or liability of any kind under these states’ consumer protection laws.  North Carolina’s share of the state settlement is $1.2 million.

The drugs manufactured at the Cidra plant were Kytril, a drug used to prevent nausea and vomiting caused by cancer treatment; Bactroban, an antibiotic ointment for skin infections; antidepressant Paxil CR; and type 2 diabetes drug Avandamet. North Carolina Attorney General Roy Cooper said that all adulterated batches of the drugs covered by this agreement were recalled years ago and their expiration date has passed, so there is no reason for consumers currently taking these medications to be concerned.

The 60 Minutes story on the GSK Cidra plant is here: