Whistleblower Qui Tam Law Blog

Off-label marketing of drugs and devices for uses that are not approved or cleared by FDA has been frequently challenged by the government in False Claims Act and related criminal cases. Some of the largest settled cases have focused on the illegal marketing of drugs to treat conditions the FDA did not authorize, e.g., Pfizer ($2.3 billion settlement for marketing of Bextra), Eli Lilly ($1.4 billion settlement for marketing of Zyprexa), and TAP Pharmaceutical ($875 million for marketing of Lupron). The prosecution of these violations historically has focused on charging the company with criminal liability, but not the individuals who engage in the illegal promotion or senior executives who oversee corporate marketing plans. This soon may change.

Eric Blumberg, Deputy Chief of Litigation at FDA's Office of Chief Counsel, has signaled that the era of financial settlements by companies without criminal prosecution of executives may be coming to an end. At an October 2010 conference in Washington, DC, Mr. Blumberg explained that individual accountability for illegal promotion pursuant to the Park Doctrine may be used by the FDA to compel compliance. This responds to critics who assert that the current enforcement approach encourages recidivism by companies, as reflected in the fact that the same companies repeatedly engage in the same off-label promotional strategies because of the profits earned in the process.

Stemming from a 1975 Supreme Court decision, the Park Doctrine authorizes the government to prosecute high-ranking executives for violations of the federal Food, Drug and Cosmetic Act. The strong remedies provided under the Park Doctrine include criminal conviction with up to one year in jail, substantial civil penalties, and possible expulsion from the industry.

GlaxoSmithKline (GSK) has agreed to pay $750 million to settle Federal and State criminal and civil charges that it sold adulterated drugs (Bactroban, Kytril, Paxil CR, and Avandamet) to government health plans for subsequent ingestion by patients. The settlement resolves a qui tam lawsuit by a former GSK manager of global quality assurance, Cheryl Eckard, who alleged major violations of commercial good manufacturing practices (cGMP) by GSK at a plant located in Cidra, Puerto Rico. Ms. Eckard will be paid $96 million by the Federal government for her part in blowing the whistle on GSK's fraud, in addition to an undetermined additional amount from State recoveries. A criminal fine and forfeiture in the amount of $150 million was also levied against GSK.

FDA inspections of GSK's plant in 2001 and 2002 uncovered significant cGMP violations, resulting in a warning letter. GSK sent Ms. Eckard to the plant to investigate the manufacturing practices, and she discovered serious cGMP compliance issues. Her recommendations to GSK to stop shipping all products from the plant and to notify the FDA were ignored by GSK managers and senior executives. In her suit, Ms. Eckard alleged that GSK caused false claims to be submitted for the adulterated drugs because the drugs made and sold by GSK did not match the drug specifications approved by the FDA. This case demonstrates that cGMP deviations by drug or medical device companies can result in false claims for payment in violation of the False Claims Act.

The settlement underscores the importance of not allowing manufacturing problems for drugs and devices to result in substandard products with uncertain health and safety risks for patients. cGMP requirements are a safety net designed to prevent this outcome. Applicable standards are violated to the detriment of patients if a company cuts corners to increase profitability and then fraudulently conceals major deviations. Given the risk to patients, reporting this type of fraud is important if you are aware of such improper conduct. The False Claims Act affords significant protection of employees who step forward. The case is United States ex rel. Eckard v. SmithklineBeecham Corp., C.A. No: 04 CV10375 (JLT) filed in the U.S. District Court for the District of Massachusetts.