Glaxo Case May Not Be Over

October 27, 2010
Glaxo Case May Not Be Over
By DUFF WILSON
New York Times

The government is still following up on GlaxoSmithKline’s manufacturing problems in Puerto Rico after Tuesday’s news that the company would pay $750 million to settle criminal and civil complaints about adulterated products.

For months, federal investigators have talked about a renewed determination to hold company officials, not just corporate entities, accountable for false claims filed with government health programs that buy such products. The federal False Claims Act has recovered billions of dollars for health care fraud, but companies, not executives, are signing the plea deals.

The GlaxoSmithKline case started with a whistle-blower complaint filed six years ago by the plant’s former quality control manager. Her case ended yesterday with a $96 million share of the recovery.

The United States attorney for Massachusetts, Carmen M. Ortiz, was asked in an interview Tuesday whether there could still be any individual accountability in the case. “I really shouldn’t comment specifically in relation to this case,” she replied, “because the investigation is ongoing.”

Does that mean company officials might still be under scrutiny? “The corporate aspect is finally settled,” Ms. Ortiz replied. “I would rather not say anything else.”

One former Glaxo official was singled out in the indictment of the company in the Puerto Rico case – an unnamed person who was hired in April 2003 as the site director of the giant manufacturing facility, and accused of interfering with quality complaints. The person was removed from that job in October 2004.

In most circumstances, however, 2004 would fall outside of the five-year statute of limitations for federal misdemeanor prosecutions.

But the government can pursue individuals under a strict liability standard known as the Park doctrine — a line of prosecution that has many pharmaceutical executives worried.

Named after a 1975 Supreme Court case, that doctrine allows misdemeanor prosecution of company officials for violating the federal Food, Drug and Cosmetic Act whether or not there is evidence the official knew of the violations. The individual needs to be in a position of authority.