The Big Pharma giant GlaxoSmithKline has finally faced the music after years of dodging accountability. SB Pharmco, a subsidiary of GlaxoSmithKline, has agreed to plead guilty to charges related to the manufacture and distribution of adulterated medications made at their Puerto Rico plant, which is currently closed.
The resolution includes a criminal fine and forfeiture of $150 million and a civil settlement under the False Claims Act and related state claims for $600 million. The medications, made between 2001 and 2005, include Kytril, Bactroban, Paxil CR, and Avandamet. Kytril is a sterile anti-nausea medication, Bactroban is a topical ointment for skin infections, Paxil CR is a controlled-release version of the popular antidepressant Paxil, and Avandamet is a combination medication for Type II diabetes.
The Food, Drug and Cosmetic Act prohibits the introduction or delivery for introduction into interstate commerce of any adulterated drug. According to the FDCA, a drug is considered adulterated if the methods used in, or the facilities or controls used for, its manufacture, processing, packing, or holding were not in compliance with current good manufacturing practices, or if such methods, facilities, or controls were not used or followed according to the current good manufacturing practices, to ensure that the drug conformed to the requirements of safety, and bore or contained, with the express or implied inducement, promises, or suggestion of the identity, strength, quality, or purity, that it would possess.
The criminal information presented today alleges that the manufacturing operations of SB Pharmco failed to ensure that the final products of Kytril and Bactroban were free from contamination from microorganisms. It also alleges that the manufacturing process of SB Pharmco caused the tablets of Paxil CR to break, which the company itself called a ‘critical defect’, leading to the potential distribution of tablets with no therapeutic effect and tablets that did not contain any controlled-release mechanism.
The criminal information also alleges that the tablets of Avandamet manufactured by SB Pharmco did not always contain the approved blend of active ingredients by the US Food and Drug Administration (FDA) and, as a result, potentially contained too much or too little of the therapeutic ingredient. Finally, the criminal information alleges that the facilities of Cidra of SB Pharmco suffered from long-standing problems of mixing of products in which tablets of one type of medication and concentration were mixed with tablets of another type of medication and/or concentration in the same bottle.
SB Pharmco has agreed to plead guilty to a felony count of introducing adulterated drugs into interstate commerce, in violation of the FDCA. According to the plea agreement, the company will pay a criminal fine of $150 million, which includes the forfeiture of $10 million in assets. The plea and sentence are not final until accepted by the US District Court in Boston.
Under the civil settlement, GSK has agreed to pay an additional $600 million to the federal government and states to resolve allegations that it caused the presentation of false claims to government healthcare programs for certain amounts of adulterated Kytril, Bactroban, Paxil CR, and Avandamet. The United States alleges that GSK sold certain lots or portions of lots of drugs, whose concentration differed materially from, or whose purity or quality was materially below, the express or implied representations of the drug’s identity, strength, quality, or purity, made by the company.
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Key Facts
- State: Federal
- Category: Drug Trafficking|Fraud & Financial Crimes
- Source: DOJ Press Release ↗
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