Good Manufacturing Practice Violations
Pharmaceutical and biotech companies are required to follow the current Good Manufacturing Practices (cGMP) in order to ensure that their products meet specific FDA requirements for purity, strength, stability and quality.
The cGMP regulations for drugs and biological products contain certain minimum requirements that must be met for the methods, facilities, and controls used in manufacturing, processing, and packaging.
The United States Civil False Claims Act, 31 U.S.C. § 3729, et seq., is the government’s principle means of redressing fraud by government contractors. The Act has implications for Good Manufacturing Practice Violations (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.
Qui tam whistleblowers, have already begun bringing additional such cases to the attention of the Government. 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.
On October 26, 2010, the United States Department of Justice announced the settlement of the first False Claims Act case predicated on cGMP violations. In this settlement, GlaxoSmithKline pled guilty and agreed to pay $750 million to resolve criminal and civil liability regarding manufacturing deficiencies at its Puerto Rico plant. According to the government, the company’s manufacturing operations failed to ensure that its drugs were free of contamination from microorganisms. Moreover, the government alleged that the company’s manufacturing process caused one of its two-layer tablet products to split, causing the potential distribution of tablets that did not have any therapeutic effect. Lastly, the government alleged that the plant was riddled with longstanding problems of product mix-ups, which caused tablets of one drug type and strength to be commingled with tablets of another drug type and/or strength in the same bottle.