Glaxo settles bad drug case for $750M

British pharmaceutical company GlaxoSmithKline P.L.C. will pay $750 million to settle allegations that it knowingly manufactured and sold adulterated drugs, including the popular antidepressant Paxil, federal prosecutors in Massachusetts said Tuesday.

U.S. Attorney Carmen Ortiz, in Boston, announced that the London-based company will pay $150 million in criminal fines and $600 million in civil penalties related to faulty manufacturing processes at its plant in Cidra, Puerto Rico. The company allowed several drugs to be adulterated between 2001 and 2005, including Paxil CR, a skin-infection ointment called Bactroban, and an anti-nausea drug called Kytril.

Glaxo has large operations in the Philadelphia area. It said in a statement that it regrets operating the Puerto Rico plant in a manner that violated good manufacturing practices. The company said the plant closed in 2009 due to declining demand for the medicines made there.

Ortiz said that no patients appeared to have been harmed by the quality problems at the plant, which included failing to ensure that Bactroban and Kytril were free of contamination from microorganisms and causing Paxil controlled release tablets to split, causing the potential distribution of tablets that did not have any therapeutic effect.

The investigation began after Cheryl Eckard, the company's global quality assurance manager, went to the Food and Drug Administration to report problems at the Puerto Rico plant.

Eckard, who worked at the company's offices in North Carolina, said she was fired in 2003 after repeatedly reporting the problems to her superiors and the company's compliance department.

"This is not something I ever wanted to do, but because of patient safety issues, it was necessary," Eckard told reporters after the settlement was announced Tuesday.

As a whistle-blower, Eckard will receive $96 million of the settlement paid by the company.