Information & Insight On Qui Tam Lawsuits Based Upon Unlawful Kickbacks, Marketing & Pricing Conduct.

Increasingly, federal investigators have been turning their attention to manufacturing deficiencies at some of the world’s largest drug makers. According to one industry report, the number of FDA inspection reports has skyrocketed to an all-time high. This focused attention comes on the heels of a recent report from the US General Accountability Office, which found that the FDA failed to adequately inspect a number of manufacturing facilities around the globe.

The added governmental exposure has shed the light on a number of problems, likely encouraging a weekly parade of drug recalls from pharmaceutical companies. For some companies, they have led the parade of FDA warnings and recalls on a number of occasions. For example, Johnson & Johnson has repeatedly tangled with the FDA, most recently when it was warned by the FDA about problems at its Cordis stent facility. Last year, this same company temporarily closed a large Pennsylvania facility and recalled an estimated 136 million bottles of liquid children’s Tylenol and other pediatric products, after quality controls failed.

However, the real driving force behind this surge of pharmaceutical mea culpas probably has less to do with federal investigators and more to do with pharmaceutical industry’s concerns about potential False Claims Act qui tam actions. The simple fact is that drug makers are now on notice that employees can bring successful whistleblower suits involving current Good Manufacturing Practices (cGMP) violations.

The extended reach of whistleblowers was made crystal clear last year, when the U.S. Department of Justice joined in a whistleblower action against GlaxoSmithKline, exposing systemic manufacturing deficiencies at the company’s Puerto Rico facility. Ultimately, the company settled the action for $750 million, and the whistleblower was handsomely rewarded to the tune of $96 million.

In a very real sense, the GlaxoSmithKline settlement has encouraged other potential whistleblowers to step forward and uncover other instances of cGMP violations. More importantly, because the False Claims Act provides incentives and protections for these whistleblowers, drug companies cannot simply disregard their concerns. The lasting impact is that, whether through recalls or False Claims Act settlements, drug companies are forced to fess up to unsafe manufacturing practices.

For more information about qui tam law and pharmaceutical fraud, contact Nolan and Auerbach, P.A.

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Recently, we discussed GlaxoSmithKline’s False Claims Act settlement, in which the drug maker shelled out $750 million to quiet allegations about manufacturing deficiencies at its Puerto Rico. Based on a recently released FDA inspection report, it looks like another drug company’s Puerto Rican plant is having trouble following current Good Manufacturing Practices (cGMP).

In this report, the FDA rattles off a laundry list of violations at the plant owned by McNeil Consumer Healthcare, a unit of Johnson & Johnson: distribution of drugs that failed quality requirements, a failure to identify product defects during routine testing, failure to detect incorrect expiration dates on drug labels, failure to adequately investigate product problems, failure to follow laboratory controls and inadequate training of lab staff.

Some of these mirror concerns raised in a January 2010 FDA warning letter that was sent McNeil about this same Puerto Rico plant.  McNeil has also seen this scenario play out before at a different plant.  After quality controls failed at its Fort Washington, Pa. plant, the company temporarily closed the plant and recalled an estimated 136 million bottles of liquid children’s Tylenol and other pediatric products.

This latest brush up with the FDA stems from inspections that date from late September through early November. The 10-page report concluded that there was no assurance at the Puerto Rico plant “that the current laboratory controls are adequate to assure that drug products conform to appropriate standards of identity, strength, quality and purity.” The report also states, “The established procedures and controls for cleaning and maintenance may not be sufficient to prevent mix-ups and/or contamination during the manufacturing and packaging process as evidenced by the mix-up deviations and incidents involving manufacturing and packaging operations.”

Somebody had the courage to blow the whistle on GlaxoSmithKline’s manufacturing deficiencies. Hopefully a brave McNeil employee can similarly provide the inside information the government needs to further shine a light on the problems at this wayward Puerto Rico facility.

For more information about qui tam law and pharmaceutical fraud, contact Nolan and Auerbach, PA.

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