There have been significant settlements resulting from whistleblowers who report cGMP fraud. But what is cGMP fraud? The term “cGMP” stands for “Commercial Good Manufacturing Practices.” CGMP fraud refers to drug or device manufacturing fraud.
Additionally, if state Medicaid money is involved in the manufacturing fraud, a qui tam can be brought under State False Claims Acts, such as the Oklahoma Qui Tam Statute, Maryland Qui Tam Statute and Vermont Qui Tam Statute. Or if California private insurance companies are defrauded by the same conduct, a whistleblower can bring a case under the California Insurance Fraud Prevention Act.
Qui Tam Settlements for Manufacturing Fraud
There have been several large settlements for cases involving violations of the cGMPs.
cGMP Fale Claims Act Case Against GSK
For example, a former compliance officer filed a False Claims Act case against GlaxoSmithKline (“GSK”) alleging the company violated cGMPs. The whistleblower alleged that GSK caused false claims to be submitted to government health care programs for adulterated drugs. The drugs were adulterated because GSK violated the cGMPs. Examples of the violations include:
- microbial contamination
- content uniformity failures
- instruments not calibrated
- investigations overdue or inadequate
- documentation deficiencies
- HVAC cross contamination
- products and processes not validated
This qui tam case resulted in a $900 million settlement in 2010.
cGMP False Claims Act Case Against Ranbaxy
The following settlement stemmed from a qui tam action initiated by a former executive of the company who sought to report cGMP fraud.
In 2013, the whistleblower filed a qui tam to report cGMP fraud against Ranbaxy. The whistleblower alleged that Ranbaxy (manufacturer) made false statements to the FDA regarding the quality of its drugs. Additionally, the whistleblower alleged that Ranbaxy failed to comply with current good manufacturing practices. This case involving manufacturing fraud settled for $500 million.
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