The Department of Justice announced Thursday a settlement with drugmaker Baxter Healthcare Corp. over allegations that it failed to follow federal manufacturing standards.
Baxter Healthcare Corp., a subsidiary of Deerfield, Ill.-based Baxter International, will pay the federal government $18.2 million to resolve criminal and civil liability arising from its failure to follow proper federal standards when manufacturing sterile drug products between 2011 and 2012 at a factory in Marion, N.C. The settlement includes an admission of guilt from Baxter, $16 million in criminal penalties and over $2 million in civil penalties under the False Claims Act.
The Food and Drug Administration set standards that relate to design, monitoring and control of manufacturing processes and facilities. If those standards are not followed, the feds can prosecute drugmakers under the False Claims Act if the company knowingly failed to comply with regulations and claims were submitted to federal programs for the adulterated drugs.
Federal authorities say Baxter employee Christopher Wall reported that mold was present on air filters that were supposed to ensure sterility in the room where large-volume sterile intravenous drug solutions were being developed. Despite this discovery, the company continued to manufacture drugs in the room for several months, according to the U.S. Department of Justice.
The FDA tested samples from the filters obtained during an unannounced inspection and found several mold species, but authorities say there is no evidence that the mold had an effect on the IV solutions that were being manufactured at the time.
Wall, a whistleblower defendant in the civil suit filed in 2013 under the False Claims Act, will receive roughly 20% of the civil settlement. Under the False Claims Act, whistleblowers can share in the government's recovery of costs.
The drugmaker said in a statement that it fired several members of the facility's management team and enhanced training and compliances for the factory's workers as a result of the problem. The company also made physical improvements to the room in question, and bolstered its inspections and environmental monitoring of the room.
Baxter reiterated that there is no evidence that products were impacted by the mold, and added that there was not an increase in complaints or patient adverse events associated with the products during the time that the mold was present. Still, the company said the handling of concerns over the mold was not consistent with its standards.
“Patient safety and product quality are the cornerstones of our work at Baxter,” the company said. “Healthcare providers and patients rely on our products to support them in critical situations. That is an important responsibility, and one that requires us to maintain the highest standards for ourselves, our products and our processes.”
Sterile injectables, including those used in vials and IV bags, are difficult to manufacture safely due to problems with sterility, bacterial or fungal contamination, visible particulates or crystallization, among other factors. That's why the drugs represent some of the most persistent drug shortages, including antibiotics, cancer medications and anesthetics.