Health Inc.

Glaxo To Pay $750 Million And Plead Guilty In Drug Quality Case

We sort of saw this GlaxoSmithKline settlement coming, but it's still a big deal when a company shells out three-quarters of a billion dollars to resolve anything.

Paxil CR tablets. i i

hide captionPaxil CR tablets.

National Library of Medicine
Paxil CR tablets.

Paxil CR tablets.

National Library of Medicine

At issue: a slew of quality problems at a Glaxo factory in Puerto Rico, since closed. The government says those lapses led to the shipment of substandard drugs, including antidepressant Paxil CR and diabetes pill Avandamet.

The company will plead guilty to federal criminal charges and will pay the feds $150 million, which is part fine and part forfeiture. There's also a civil settlement that involves $600 million, which will go to the feds and states in compensation for their health programs' purchases of medicines affected by the problems.

In July, the company said it was setting aside $750 million to cover an agreement in principle with the government, so it wasn't exactly a secret that this day would come.

One new detail: A former Glaxo quality manager named Cheryl Eckard will get about $96 million from the federal share of the settlement. She blew the whistle on the company and filed a lawsuit, previously under seal, that you can read here. Glaxo fired her after she raised a stink.

Some of the government's allegations are sobering.

  • Nausea medicine Kytril and antibiotic ointment  Bactroban could have been contaminated with bacteria.
  • A special coating on Paxil CR pills cracked, leading to medicine that wasn't effective.
  • Advandamet tablets were sometimes too strong or too weak.
  • Different medicines were mixed up in the same bottles.

In a statement, Glaxo said it regretted operating the Cidra, Puerto Rico, factory in a way that didn't live up to Food and Drug Administration quality regulations and said it's now doing a better job across the board. "[W]e have not received an FDA warning letter at any plant since the Cidra facility was cited in July 2002," the company said.

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