Oregon Department of Justice

Attorney General Ellen F. Rosenblum

Oregon Department of Justice - Attorney General Ellen F. Rosenblum
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$40.75 MILLION AGREEMENT RESOLVES ALLEGATIONS OF ADULTERATED DRUGS AT PHARMACEUTICAL PLANT

June 23, 2011

Oregon will receive $1.9 million under the multi-state agreement with GlaxoSmithKline and SB Pharmco

The Oregon Department of Justice today announced a $40.75 million multi-state agreement that resolves allegations that GlaxoSmithKline, LLC and a subsidiary of Glaxo's parent company used substandard drug manufacturing processes that produced adulterated drugs.

"Cutting corners to turn a profit is unacceptable," said Deputy Attorney General Mary Williams.

The allegations involve a manufacturing facility in Cidra, Puerto Rico, that was owned by SB Pharmco, a subsidiary of GlaxoSmithKline's parent company that produced products distributed by GlaxoSmithKline. In 2001, the Cidra facility was the largest production facility of GlaxoSmithKline products worldwide and was a major supplier of prescription drugs in the United States.

Oregon and Illinois led a 37-state and District of Columbia investigation after evidence surfaced suggesting that, from 2001 to 2004, GlaxoSmithKline and SB Pharmco failed to comply with federal manufacturing guidelines in the production of prescription drug brands Bactroban, Kytril, Paxil and Avandament. Under the complaint and agreement filed today in Multnomah County Circuit Court, GlaxoSmithKline and SB Pharmco are accused of violating state consumer protection law by manufacturing and distributing for use in Oregon certain lots of those drugs that were adulterated because they were produced using substandard manufacturing processes.

Today's agreement prohibits GlaxoSmithKline and SB Pharmco from making any false, misleading or deceptive claims about the manufacturing of all drugs formerly produced at the Cidra facility, regardless of where they are now manufactured. In addition, the companies may not misrepresent any characteristics of their drugs or cause the likelihood of confusion or misunderstanding about they way in which they are manufactured.

Under the $40.75 million settlement, $1,725,647 will go to the State of Oregon. In addition, GlaxoSmithKline and SB Pharmco will pay $111,500 to the state Public Employees Benefit Board (PEBB); $44,014 to the State Accident Insurance Corporation Fund (SAIF); and $2,675 to the Department of Corrections to reimburse those agencies for purchases of the four drugs.

GlaxoSmithKline and SB Pharmco are no longer manufacturing prescription drugs at their Cidra facility, which has been closed since 2009. For current users of Bactroban, Kytril, Paxil or Avandament, there is no current basis for concern because all adulterated batches have been recalled for several years and/or the expiration date of the drug is past. If consumers do have questions they should could consult their health care provider.

Senior Assistant Attorney General David Hart, Assistant Attorney in Charge of Financial Fraud/Consumer Protection, handled the case for the Oregon Department of Justice.

Attorney General John Kroger leads the Oregon Department of Justice. The Department's mission is to fight crime and fraud, protect the environment, improve child welfare, promote a positive business climate, and defend the rights of all Oregonians.

Contact:

Tony Green, (503) 378-6002 tony.green@doj.state.or.us |
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