DOJ recently announced that Baxter Healthcare Corporation agreed to pay $18.158 million to resolve its criminal and civil liability arising from Baxter’s failure to follow current Good Manufacturing Practices (cGMP) when manufacturing sterile drug products in North Carolina.

The resolution includes a deferred prosecution agreement and penalties and forfeiture totaling $16 million and a civil settlement under the False Claims Act (FCA) with the federal government totaling approximately $2.158 million.

Manufacturers are required to follow cGMPs to ensure that their products meet specific FDA requirements for purity, strength, stability and quality.

In this case:

Baxter manufactured large-volume sterile intravenous (IV) solutions in a clean room that had high-efficiency particulate absorption (HEPA) filters installed in the ceiling. Air was pushed into the clean room through the HEPA filters.

A Baxter employee reported the presence of mold on the HEPA filters to plant management. However, Baxter continued to manufacture IV solutions in that clean room for months while the filters the employee had identified as moldy remained in place.

Subsequent testing of the filters following an unannounced U.S. Food and Drug Administration (FDA) inspection revealed several mold species on the filters. There was no evidence of impact on the IV solutions from the mold found on the filters.

Special Agent in Charge Justin Green of FDA’s Office of Criminal Investigations, Miami Field Office commented:

FDA’s manufacturing standards are designed to ensure the quality, safety, and efficacy of drugs distributed to American consumers, and FDA expects pharmaceutical companies to correct deficiencies in an expedited manner…We will remain vigilant in our efforts to protect the U.S. public health from potentially dangerous products.

The False Claims Act imposes liability on any company that knowingly submits false claims to Medicare, Medicaid or TRICARE, including manufacturers who know or are recklessly indifferent to the fact that a manufacturing process has been compromised by GMP violations.

The relator in this case will receive a whistleblower reward of $431, 535.99 from proceeds of the civil settlement.

More information for potential whistleblowers is located at the Nolan Auerbach & White website.