False Claims Act Cases Based on GMP Violations . . . Watch Out For Whistleblowers

It they haven’t already started, pharmaceutical manufacturers should be re-assessing their compliance with all aspects of FDA “current Good Manufacturing Practices” (“GMPs”), given the agency’s focus on manufacturing and the spurt of recent warning letters and product recalls.  Companies that fail to appear vigilant in ensuring that their products are GMP-compliant are inviting current and former employees to join the ranks of whistleblowers who have become wealthy relators through qui tam lawsuits.

Background on the FDA’s Current Good Manufacturing Practices

The FDA has established a detailed set of “current Good Manufacturing Practices” that provide guidance in regard to quality management systems, the acquisition of raw materials, production procedures, sterility levels, testing laboratories, and reporting.  FDA-trained inspectors visit pharmaceutical manufacturing facilities in the U.S. and overseas to evaluate facility and manufacturing compliance with GMPs.  If these inspectors determine that drug products are being manufactured in plants that are operating in violation of GMP guidelines, the FDA will issue a “Form 483″ notifying the company of the inspectors’ observations.  If the Company fails to address the FDA’s concerns, the agency may issue a warning letter.  Although a warning letter is not considered a  “final action” by the agency, one consequence of the FDA’s determination that drug products are being manufactured in violation of GMPs is that the drug products are considered “adulterated.”

FDA Picks Up the Pace on “Good Manufacturing” Challenges

Boehringer Ingelheim was the subject of a May 6 FDA warning letter challenging the German manufacturer in regard to several alleged quality and investigative failures surrounding the presence of foreign particles in an active pharmaceutical ingredient.  According to the FDA letter, punitive measures that may be pursued include: a) withholding approval of any new Boehringer Ingelheim applications or supplements; and b) refusing U.S. admission of articles manufactured at the Company’s Ingelheim, Germany, plant.  Shortly before the FDA issued its warning letter to Boehringer Ingelheim, the FDA took aim at drug products manufactured by NuVision Pharmacy when the agency publicized a voluntary recall of all unexpired lots of lyophilized (freeze dried powder) compounds HcG 5000IU-5ml and Sermorelin/GHRH6-5ml to the user level.  According to the NuVision recall announcement, concerns about inadequate sterility assurance and poor quality control processes identified during an FDA inspection were the reasons for the recall.

But wait, there’s more.  V-SAB Medical Labs of Cornelius, North Carolina, is another company facing the glare of adverse publicity following a FDA warning letter the Company received in April.  Alleged infractions include the sale of unapproved drugs not generally recognized as safe and effective, and the failure to comply with GMPs regarding product specifications and quality testing.  Other recent FDA warning letters regarding non-sterility issues, the presence of foreign particulate matters, or quality control procedures also went to Sandoz, Fresenius Kabi, Olympia Pharmacy (owned by Lowlite Investments), Main Street Family Pharmacy, and several others.

Observations  

Drug manufacturers and testing labs that get tagged with FDA warning letters based on GMP violations risk whistleblower actions under the False Claims Act .  This is nothing new.  In October, 2010, the Government and GlaxoSmithKline (GSK) announced that the Company had agreed to pay $750 million in civil and criminal fines related to manufacturing problems at GSK’s plant in Puerto Rico.  Although dire predictions that the GSK case would signal a new wave of GMP violation inspired qui tam suits haven’t exactly panned out, the FDA’s recent focus on manufacturing violations and spate of warning letters could invite a disgruntled employee and his qui tam counsel to paint an unflattering narrative of his employer, which we know the Government is often more than happy to embrace.  Accordingly, I would recommend that any company facing a FDA 483 or warning letter not only document and respond vigorously, but also disseminate proper internal compliance messaging to its employees to ensure that its “counter-narrative” is firmly in place.