$4.3 Billion - The Current Price of Compliance?

Written by Nancy Tomoney - Associate Validation Manager, QPharma

In October 2010, two major news releases coincided.  First, the Inspector General of Health and Human resources and the Commissioner of the FDA decided to enforce an existing rule that allows industry executives to be prosecuted and barred from industry even if they have a left a company where compliance issues were found by FDA or reported by a whistleblower.  Second, the initial fine by the courts in the Case of the United States of America versus GlaxoSmithKline (GSK) was awarded, $750 million dollars.  There is still potential for additional fines by the 50 US states and other US territories against GSK.  Cheryl Eckerd, the GSK whistleblower who pointed FDA and United States Department of Justice to additional problems at the GSK Cidra Puerto Rico site, will receive close to $100,000,000 dollars out of the collected court fines.

In the last year, six companies have amassed fines totaling $4.3 billion dollars based on whistleblower testimony.  All of the whistleblowers were insiders, quality compliance personnel, fed up with their individual companies push off of GMP issues reported in audits by internal staff. 

FDA had performed an inspection of the GSK Cidra site and issued significant 483s in June of 2002 and a subsequent Consent Decree in 2005.  Cheryl Eckerd was a key person leading the compliance remediation team for GSK at the GSK Cidra Puerto Rico facility where FDA found the issues. She reported additional issues of noncompliance to her superiors at Cidra.  Cheryl refused to focus solely on fixing just the FDA noted violations and was eventually terminated in 2003.  GSK stated that her termination was part of position cutbacks for redundant job descriptions that were no longer required.  Ms. Eckerd took her amassed documentation and ran to the FDA.  The United States Department of Justice, in coordination with FDA, then began further undercover investigations of GSK at Cidra and documenting evidence for their case.

The products made in Cidra were slowly transferred to other GSK facilities and Cidra closed.  The compliance issues at the plant, once unique to facilities operated off shore of North America have now spread onshore.  Quality obedience has become second to profits and market share;  and pardon my skeptic nature but, I think it will continue to be such, until Congress, FDA, physicians, and consumers start fighting back.

There are changes pending to the Pure Food, Drug and Cosmetic Act, but most outside of the industry have not taken notice.  To the companies receiving the judicial fines, $4.3 billion dollars, an average of $710,000,000 per company, is substantial, but they seem not to care.  Management seems to still not hear the cries of quality first.  Hence more and more Warning Letters are issued daily.  When will the industry learn?

Quality is not cheap, it is not easy, and sometimes it is inconvenient.  I once had $4 million dollars of product on quarantine for nine months while we investigated the testing surrounding it.  We knew it was an analyst error, but proving it takes time.  However, my management would rather do the right thing than potentially maim or kill someone.  In the end, the investigation was well documented, and the material was sent to market.  Sales hated me for the backorders, but I was not punished.  But then I worked for a company run by a physician concerned with quality.

Part of the problem in our industry is who is at the top.  Are they ethical? Are they scientists or medical professionals?  Too often they are professional business people, great at business management, but with no real knowledge of what is required to put a pharmaceutical or medical device product on the market that is safe, pure and effective.  However, they are very willing to cut costs in quality.  Often, they look at quality and compliance as unnecessary and government mandated.  Quality and compliance are not the enemy, they are the last line of defense.  Quality and compliance are all that stands between success and a tarnished corporate image, but management does not often recognize that.  Let quality and compliance do their jobs.

The profitability of whistleblower cases is hurting industry, hurting corporate market share, hurting corporate profits.  The CEOs and boards need to wake up and understand this.  Fund quality, let them investigate, do the right thing, and Oh My Goodness, you will actually make more money.  The offset spent on quality will help, not hurt, the bottom line.

The FDA and Justice Department have mastered the art of the whistleblower investigation. They are now smarter than the cost cutters who are cutting corners on compliance and quality enforcement in our plants.  Cheryl Eckerd may earn a payout from her whistle blowing, but for all the good she feels about it, it would be nice for her to be able to take an aspirin and wonder - wonder if that aspirin was made in a plant with compliance and GMP issues.  We would not need whistleblowers if we just do it right the first time.  Quality in, quality out. We can only hope the board room wakes up so we can all take our medications without fear.