Cheryl Eckard’s Story
In the world of fake or sub-standard pharmaceuticals, the thriller writer doesn’t have to look far for plots. The money involved is so huge and the opportunities for cheating so varied that the only reason this rich vein is not tapped, is because not many people know about it. Take the case of the GlaxoSmithKline (GSK) facility in Cidra, Puerto Rico.
The US Food and Drug Administration (FDA) first raised concerns about the plant which manufactured a range of products including drugs to treat depression and diabetes. As a result GSK sent down Cheryl Eckard, a quality assurance manager, who uncovered much more than the FDA had. What she found appalled her: non sterile environments, contaminated water source while some medicines were being mixed up and packaged in the wrong doses. She described a tank that was supposed to be sealed to protect the ingredients from infection. “They were opening up the lid … and then they were sticking their body into the tank and scraping it with, like, a paddle,” she told reporters. “They did it to save money.”
Eckard also reported that a pharmacist contacted the company complaining that their powerful anti-depressant, Paxil, had been prescribed for an eight-year-old boy. The boy’s grandmother picked up the prescription but opened it up and said, “I knew it. His medicine has always been yellow but last month it was pink [like this one] and he’s been so sick.” Eckard discovered that the yellow Paxil is a ten milligram dose, while the pink is 25 milligrams, but they were both made on the same production line. She took her findings to the same vice president she’d asked to shut down the plant five months earlier. “I took it out and handed it to him … and he put his head down and put his hands over his face and said “Oh my God. Oh my God.” But instead of shutting down the plant they simply filed a report with the FDA saying it was “extremely unlikely” that the mix-up occurred in Cidra and that “there were no adverse reactions”.
Eckard remembered one visit to the plant. “The director of manufacturing at the factory, maybe he was VP of manufacturing, he pulled me aside and said, “We can all tell you’ve been crying. You come here every days and your eyes are swollen because you’ve been crying. So I want to ask you to stop that” And I said to him, “You know, I do cry. I cry at night. I cry in the morning. And what I don’t understand is why I’m the only one. Why aren’t you crying?”
After eight months’ investigation, she sent a summary to seven executives highlighting nine high risk areas at the plant, reporting on the mix-ups, the water contamination and problems with sterility. She warned them that if the FDA found out they could seize the factory. Weeks later, she was made redundant – GSK said they were “downsizing”.
Frustrated, she finally approach the FDA but even then GSK refused to acknowledge her claims. But she was determined to follow it up. “This is not something I ever wanted to do, but I felt I had no choice because of the safety concerns,” she’s quoted as saying. “It’s difficult to survive this financially, emotionally, you lose your friends because all your friends are people you have at work. You really do have to understand that it’s a very difficult process.”
Federal agents eventually staged a raid on the plant and seized defective drugs worth millions of dollars and nearly eight years after first uncovering the problem, she faced GSK in a Boston court room. Her lawsuit was filed under the False Claims Act, legislation that dates way back to Abraham Lincoln, designed to encourage informants to shop fraudsters selling rancid meat to the Union Army. It allows private citizens to sue companies when they have defrauded the government and if the adulterated drugs are paid for by the Medicare program, it’s the government that’s being defrauded. GSK finally admitted the charges and agreed to pay $750 million including fines totalling $150 million. In total GSK set aside $2.4 billion to cover all its costs, including the legal fees and clean-up in Puerto Rico. This was the first successful case to assert that a drug maker knowingly sold contaminated products – they knew about it because Cheryl Eckard had told them.
But this isn’t the largest such settlement. Pfizer alone has settled four whistleblower cases and in 2009 paid the largest-ever fine: $2.3 billion, which gives some idea of the size of the pharmaceutical market involved. This fine was almost matched in the case of US hospital group MCA (which runs many of the private hospitals in the UK). In what at the time was the largest fraud settlement in US history, HCA agreed to pay $840 million in criminal and civil penalties for submitting inflated invoices and expenses to the government. These invoices, also paid for by Medicare, included kick-backs for doctors for patient referrals. For years the company had been paying doctors to refer patients to their hospitals. They provided doctors with loans without expectation of repayment, free rent and free drugs. At least one doctor sold those drugs to his patients and kept the money himself. Attorney General Janet Reno said HCA’s guilty plea would send an important message to the health care industry. “Health care fraud impacts every America citizen.”
In such a murky world, where billions of dollars appear to be loose change to the pharmaceuticals giants and the market for drugs is so huge, the thriller writer has no shortage of real-life examples on which to base a story. But Cheryl Eckard’s story has a happy ending – at least for her. The False Claims Act also allows for rewards to be paid to the whistleblower who first uncovered the fraud. In her case against GSK, Cheryl Eckard was awarded £96 million from the Federal Government but stood to receive even more from individual States under the same Act. Given the huge profits to be made, whether the industry world-wide has cleaned up its own act seems unlikely.