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GSK Pleads Guilty: Settles Claims for $750M

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The maker of Paxil, Avandia, & other controversial drugs GlaxoSmithKline PLC has agreed to pay $750 million and plead guilty to criminal charges involving manufacturing issues at a Puerto Rico plant.

Defective Pills Manufactured in Puerto Rico Plant 2001-2005

The probe that led to these latest developments was initiated by a whistle-blower suit filed by a former employee. In that case, GSK agreed to settle an investigation over manufacturing problems of defective pills - including Paxil - at the company plant in Cidra, Puerto Rico, between 2001 and 2005. Problems included reports of pills splitting apart and having inappropriate amounts of active ingredients, posing obvious safety risks. GSK has since
closed the facility.

Specifically, the charges stem from a false-claim lawsuit filed in 2004 by Cheryl Eckard, the company's former quality assurance manager. In her complaint, Eckard alleged that the false claims made by GSK “Arose out of chronic, serious deficiencies in the quality assurance function at the Cidra plant and the defendant's ongoing serious violations of the laws and regulations designed to ensure the fitness of drug products for use.'”

As a result of pleading guilty to the civil charges, GSK will pay $600m to the states and the federal government. The company will also pay a criminal fine in the amount of $150m. Additionally, a Glaxo unit, SB Pharmco, agreed to plead guilty to a criminal felony for releasing adulterated drugs into interstate commerce. Other adulterated drugs cited in the settlement were Kytril, an anti-nausea medication, Bactroban, anti-infective and Avandamet, a diabetes drug.

Tony West, assistant attorney general for the Civil Division of the Department of Justice, said in a Justice Department press release: “Adulterated drugs undermine the integrity of the FDA’s approval process, can introduce substandard or ineffective drugs onto the market and, in the worst cases, can potentially put patients’ health at risk.”