Baxter Healthcare Corp., a producer of intravenous solutions, has agreed to pay $18 million to resolve a False Claims Act (FCA) suit in a North Carolina federal court. The suit involves alleged violations of maintenance regulations for sterile drug products. This settlement will allow Baxter to bypass criminal charges. Baxter, based in Illinois, is accused of adulterating an IV solution production line at its production facility in Marion, North Carolina, between July 2011 and November 2012 by failing to follow current Good Manufacturing Practices under the Food, Drug and Cosmetic Act (FDCA). Within that timeframe, the health care company manufactured sterile IV solutions in a clean room whose high-efficiency particulate absorption, or HEPA, filters contained signs of mold, according to the criminal information filed by the Department Of Justice (DOJ).
In a deferred prosecution agreement, Baxter admitted to distributing drug products that were adulterated in violation of the FDCA, paying $16 million in penalties and forfeiture and $2.2 million to settle a related FCA civil suit brought in 2013 by a Baxter whistleblower employee. Tests of the filters during unannounced Food and Drug Administration (FDA) inspections at the Marion facility revealed mold species on the filters, but there was no sign the IV solutions were affected, the DOJ said.
The related FCA suit, filed by whistleblower Christopher Wall, contends Baxter violated the FCA by submitting false claims to the Department of Veterans Affairs based upon the failure to follow the current good manufacturing practices. Wall will receive $431,535 of the civil settlement proceeds, according to the DOJ. Baxter’s deferred prosecution agreement on the count of introducing an adulterated drug into interstate commerce is subject to approval by a federal judge. Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, in a statement said:
Following current Good Manufacturing Practices is essential to ensure the safety and efficacy of our drugs. Today’s settlement shows that the government will continue to hold companies accountable for failing to fulfill this critically important responsibility.
The U.S. government is represented in the criminal matter by Kelli Ferry, Allan Gordus and Shannon Pedersen. The U.S. government is represented in the civil matter by Sanjay Bhambhani and Jonathan H. Ferry. The cases are United States of America v. Baxter Healthcare Corporation, (case number 1:17-mj-00010) in the U.S. District Court for the Western District of North Carolina; and United States ex. rel. Christopher Wall v. Baxter International Inc. et al., (case number 1:13-cv-00042) in the U.S. District Court for the Western District of North Carolina.
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