cGMP Violations
Good Manufacturing Practice Violations
The United States Civil False Claims Act, 31 U.S.C. ยง 3729, et seq., is the government’s principle means of redressing fraud by government contractors. The Act has implications for GMP violations because the United States (funding as it does the Medicare program, the majority of state Medicaid programs, the Veterans Administration, the TRICARE program, and others) is the world’s largest purchaser of prescription medications.
Nonetheless, the Government has yet to bring a False Claims Act case which seeks damages for GMP violations. One reason may be that the Government has multiple other remedies within which to recover damages from non-compliant manufacturers, such as criminal fines and penalties, and disgorgement.
Qui tam whistleblowers, however, have already begun bringing such cases. Because the False Claims Act imposes liability on any government contractor which knowingly submits false claims to the United States or which uses false documents to get a false claim paid, a pharmaceutical manufacturer which knew or was recklessly indifferent to the fact that the manufacturing process was compromised by GMP violations is in the same position as any other contractor which is required to conform to contractual or regulatory standards. The basis of liability under the False Claims Act is that false records have been generated which caused (false) claims for drugs to be paid by the United States.2 The monetary damages result because the payor (in this case, the U.S.), is potentially paying for substandard drugs due to the GMP violations – later covered up by false statements in documents required to be completed under the GMP.
It makes sense, too – the GMPs are a set of regulations, which, by their very nature, are designed to ensure that drugs are manufactured in such a way that they meet the requirements of the Federal Food, Drug and Cosmetic Act as to safety and have the identity and strength and meet the purity characteristics that they purport or are represented to possess. The major federally-funded government healthcare programs, Medicare and Medicaid, operate under the express provisions that they will only pay for medical services and products that are “reasonable and necessary.” Unsafe or ineffective drug products are neither reasonable nor necessary. Accordingly, as the theory goes, the United States suffers monetary damages if Medicare and Medicaid programs pay for unsafe or less effective products. These and other federally-funded healthcare programs spend billions of dollars every year on pharmaceuticals.
False representations concerning minor or technical violations will not be the basis for FCA liability. Distribution of products that are not totally GMP compliant (but have been falsely documented to be) do not necessarily result in unsafe (or sub-potent) products. The issuance of a substantial number of violations detailed in Form FDA 483 or also Warning Letter do not necessarily lead to FCA liability. Substantial violations of the GMP, later covered up in writing, however, could very well be the basis for FCA liability. False representations about compliance with 21 CFR 211.100, (failure to follow and/or document production and process control procedures) for example, could under some circumstances raise the issue. The common thread through each violation its that he violation is severe enough so that the drug product that finally reaches the public is foreseeably substantially less safe or less effective than if the GMPs were not violated.
This is an excerpt of a Chapter written by Kenneth J. Nolan of Nolan & Auerbach, P.A., in the following book: Gad, Shane Cox ed., Pharmaceutical Manufacturing Handbook: Production and Process, Wiley-Interscience (2008).