British drugmaker GlaxoSmithKline PLC said Thursday that it has reached a $40.75 million settlement with 37 states for selling potentially faulty and contaminated medicines produced at its former Puerto Rico factory during the last decade.
The settlement divides the money among those states and the District of Columbia. They filed complaints against the company under their consumer protection laws following a $750 million criminal and civil settlement with the federal government last October.
Both settlements involve production of adulterated, or substandard, products made from 2001 through 2004 at a factory in Cidra, Puerto Rico. Those included antidepressant Paxil CR _ a blockbuster drug that has since gotten generic competition _ plus anti-infection ointment Bactroban, sterile anti-nausea medication Kytril and combination Type 2 diabetes pill Avandamet.
The federal criminal complaint alleged that the company did not ensure Kytril and Bactroban weren't contaminated by microorganisms, that tablets may have contained too much or too little of the active ingredient, and that drugs of different types or strengths were mixed together in bottles.
Another problem cited by federal prosecutors was what GSK called a "critical defect" in controlled-release Paxil, as the two-layer tablets split, potentially preventing the active ingredients from being released slowly or from working at all.
The case was brought after a company whistleblower reported on conditions in the factory to the Food and Drug Administration. Cheryl Eckard, the company's global quality assurance manager, had previously reported numerous violations to her superiors, including a contaminated water system and an air system that allowed for cross-contamination between different products being made there. She said she was fired in 2003 after repeatedly reporting the problems to the company.
"Cutting corners to turn a profit is unacceptable," Oregon Deputy Attorney General Mary Williams said in a statement.
Oregon, which is to receive more than $1.7 million, and Illinois, which is to get more than $2.4 million, took the lead in the case. Payments, based on population and other factors, range from about $531,000 for Vermont to more than $3.3 million for California.
GlaxoSmithKline admitted no wrongdoing.
"GSK's manufacturing division has a strong track record of quality and compliance with current Good Manufacturing Practice requirements," or FDA regulations, the company said in a statement.
The factory, operated by Glaxo subsidiary SB Pharmco Puerto Rico, was closed in 2009 and then upgraded to meet FDA standards. It was sold in 2010 to a company outside the pharmaceutical industry.
Products made there have all been recalled or are past their expiration dates.
Along with the District of Columbia, states participating in the settlement are: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Missouri, Montana, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia and Wisconsin.
Besides the monetary settlement, Thursday's agreement prohibits GlaxoSmithKline and SB Pharmco from making any false or misleading claims about any characteristics of their drugs or how they are manufactured.