The claim was a qui tam whistleblower suit because it was filed under federal whistleblower law on behalf of the federal government, claiming that GSK had defrauded the taxpayers. Cheryl Eckard's qui tam suit alleged that the pharmaceutical giant submitted false claims to government health programs ensuring that the products manufactured at the facility were safe and effective, but further investigation—albeit several years later—showed that the employees were contaminating products and worse: Due to failure on the production line, powerful medications were getting mixed up
GSK pleaded guilty to a felony, admitted it distributed adulterated drugs, including Paxil and Avandia, and paid $750 million to settle the criminal conviction and Eckard's suit. Eckard received $96 million for her role as whistleblower.
Did this unprecedented settlement and criminal charge send a message to the industry? Not according to GSK. "I don't know Cheryl Eckard. And I don't know all the details of her accusations," said Ian McCubbin, senior vice president at Glaxo in London, when interviewed on 60 Minutes. Asked if it could happen again, he replied, "I absolutely hope not."
In response to the 60 Minutes segment, GSK issued a statement (on the same day the show aired—January 2, 2011), regretting "that we operated the Cidra facility in a manner that was inconsistent with current Good Manufacturing Practice (CGMP) requirements and with GSK's commitment to manufacturing quality."
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It also "strongly disagreed" with 60 Minutes' implication that patients, such as those taking Avandia, suffered harm as a result of the Cidra issues and rejected the claims made by Eckard in the interview that she was terminated for exposing the manufacturing problems. Under the False Claims Act, retaliation is illegal and could cost the company a substantial amount more…
Already 2011 is shaping up to be the year of the Whistleblower. On January 4, seven more hospitals (previously 25 hospitals and Medtronic Spine LLC, formerly known as Kyphon Inc settled for $101 million) settled $6.3 million for overcharging Medicare for a type of back surgery known as "kyphoplasty." More to come…