Glaxo Whistle-Blower Lawsuit: Bad Medicine

Of all the things that you trust every day, you want to believe your prescription medicine is safe and effective. The pharmaceutical industry says that it follows the highest standards for quality. But in November, we found out just how much could go wrong at one of the world's largest drug makers. A subsidiary of GlaxoSmithKline pleaded guilty to distributing adulterated drugs.

There was reason to believe that some of the medications were contaminated with bacteria, others were mislabeled, and some were too strong or not strong enough. It's likely Glaxo would have gotten away with it had it not been for a company insider: a tip from Cheryl Eckard set off a major federal investigation.

She's never told the public what she saw inside Glaxo, but now she has. Her story opens a rare window on how one company traded its good name for bad medicine.

GSK regrets the manufacturing issues at the Cidra facility, which were inconsistent with GSK's commitment to manufacturing quality. It is important to note, however, that the issues outlined in the 60 Minutes story occurred in the past -- between 2001 and early 2005 -- and related to one manufacturing facility. GSK had been working with the U.S. Food and Drug Administration to improve the plant's performance as early as 2001, before Cheryl Eckard was sent in 2002 as part of the team to address the issues cited by the FDA.

GSK strongly disagrees with 60 Minutes' implication that patients suffered harm as a result of the Cidra issues. The FDA; the US Department of Justice; and Neil Getnick, Cheryl Eckard's attorney, all stated there was no indication that patients were harmed as a result of the production issues at Cidra. Massachusetts U.S. Attorney Carmen Ortiz herself stated: "We did not uncover any evidence that patients were harmed from these adulterated batches."

GSK's manufacturing division has a strong track record of quality and compliance with current Good Manufacturing Practice (cGMP) requirements. Various regulatory agencies - including the FDA - conduct an average of more than 100 inspections each year at over 80 GSK manufacturing sites located in over 30 countries. The FDA has raised no material issues as a result of its very thorough inspections. GSK is committed to continuous improvement in our manufacturing processes. Patients should have a high level of confidence about GSK's manufacturing and the quality of our medicines.

GSK worked to bring the Cidra facility to a high level of operating performance that satisfied both GSK and the FDA. The plant was closed in 2009 due to a declining demand for the medicines made there. The company strongly rejects any claim of retaliation for whistle-blowing. In fact, employees are encouraged to report any concerns they might have to management or through a confidential compliance hotline. Issues raised are investigated, and company policy prohibits any retaliation against employees.

In 2002, Eckard was assigned to help lead a quality assurance team to evaluate one of Glaxo's most important plants, in Cidra, Puerto Rico. Nine hundred people worked there, making 20 drugs for patients in the U.S. But Eckard says that when she saw what was happening to some of the company's most popular drugs, she couldn't believe it.

"All the systems were broken, the facility was broken, the equipment was broken, the processes were broken. It was the worst thing I had run across in my career," she told "60 Minutes" correspondent Scott Pelley.

The worst, because so many things behind the walls of the plant were going wrong at once: Eckard says water used to make tablets was tainted with bacteria; failures on production lines made some drugs too strong, some not strong enough; and the employees were contaminating products, including the anti-bacterial ointment Bactroban, which was made in a sealed tank to prevent contamination.

"They were opening up the lid and then they were sticking their body into the tank and scraping it with like a paddle," Eckard said.

"But this product is supposed to be free of bacteria. Why would they do that?" Pelley asked.

"It saved money," Eckard replied.

As her team continued its evaluation of the plant, Eckard says she discovered something much worse than contamination: because of failures on various production lines, she says that powerful medications were getting mixed up.

"Are you saying that different kinds of drugs were packed into the same bottle?" Pelley asked.

"Yes. And that's shocking," she replied.

Eckard says a chart that she produced for company executives shows the kinds of mix-ups that were happening at Cidra. She identified nine, including Avandia diabetes pills mixed in packages with over-the-counter Tagamet antacids and Paxil antidepressants, mixed with the Avandia diabetes drug.

"When you saw these mix-ups happening, what did you do?" Pelley asked.

"I contacted the vice president of quality for North America and I told him that he needed to shut down the factory and call the FDA," Eckard said. "I urged him to stop the trucks that were leaving the dock that day."

Asked what happened then, she told Pelley, "I went back to work and waited for the news that they had called the FDA or that they had stopped shipments, and it didn't happen."

Eckard says as the mix-ups continued, a pharmacist called the company with a story about a mix-up involving the powerful antidepressant Paxil in its ten milligram dose. The patient was an eight-year-old boy.

"A grandmother came in to pick up this little boy's prescription. And in front of the pharmacist, she opened up the bottle. She tore off the induction seal. And she looked at it. And she became upset. And she said, 'I knew it. His medicine has always been yellow. But last month, it was pink. And he's been so sick,'" Eckard said.

"And what did that mean? The yellow and the pink?" Pelley asked.

"Paxil ten milligram is yellow. It's not pink," Eckard explained.

There is a version of Paxil that is pink. Paxil CR is 25 milligrams. If that's what the pills were, the boy was getting two and a half times his prescribed dose. Eckard says that she assigned one of her investigators to the case and found that both Paxil doses were made on one production line, which led her to a theory of how the mix-up could have happened.

"Maybe there was still Paxil in the hopper, the filling hopper when they switched out the bottles and changed out the labels. So in that batch some of the first bottles that went though were labeled ten milligram when they were actually 25," she said.

Eckard says she took her findings to the same vice president that she had asked to shut down the plant five months before. "I took it and I handed it to him and I said to him, you know, read this. And he put his head down and put his hands over his face and he said, 'Oh my God. Oh my God,'" she recalled.

Asked if the company then shut down the plant, Eckard told Pelley, "No, they filed a report with the FDA that said that the mix-up was not real. And did not happen at the factory. We all knew, they all knew it was real."

The Glaxo report to the FDA Eckard is talking about said it was "extremely unlikely" the Paxil mix-up occurred at Cidra.

We don't know what happened to the boy because drug incident reports don't contain names, but the Glaxo note to the FDA said "there were no adverse reactions."

The vice president that Eckard says she spoke to is no longer with Glaxo and he declined to talk with "60 Minutes." Glaxo denies Eckard's allegations. And it denies that it ever lied to the FDA. In fact, the company was eager to tell us that it has learned from Cidra.

Ian McCubbin is a senior vice president from Glaxo headquarters in London.

"We regret what happened in Cidra. But we've worked really, really hard to resolve those issues. We spend $600 million every year on make sure that our plant and equipment is state of the art," McCubbin said.

"Would you say that the company was chastened by all of this?" Pelley asked.

"No, I'd say the company was very disappointed that this occurred and that we regret that this occurred. But we've learned from it. And what you learn from, you become stronger," McCubbin replied.

McCubbin told Pelley the company has about 80 plants around the world. When asked if any of them operate the way Cidra did, he said, "Absolutely not."

"So how did Cidra go wrong?" Pelley asked.

"They all operated to the same standard, to the same quality system that we had in place. The difference between Cidra and all the rest of the plants is the effectiveness with which that quality system was implemented it was much weaker and that resulted in the compliance issues that occurred," McCubbin said.

"Cheryl Eckard says that she was issuing warnings and no one was listening," Pelley remarked.

"I don't know Cheryl Eckard. And I don't all the details of her accusations. What I do know is that we were working with the FDA before Cheryl went to that plant," McCubbin said.

It was an FDA inspection that first revealed problems at Cidra. And that's why Glaxo sent Eckard's team in to resolve those FDA concerns. But Eckard says she found much more than the FDA had.

FDA inspections of drug plants are only occasional, so it's up to drug companies to police themselves.

"Probably most drugs are safe that people are taking, but there are scary examples like this that certainly raise questions," Dr. Jerry Avorn of Harvard Medical School told Pelley.

Dr. Avorn is one of the nation's leading authorities on pharmaceuticals. He says that Eckard's story is an extraordinary look at what can happen when there aren't enough investigators to follow-up on the federal inspections.

"The fact that there were so many different kinds of problems and that there were even other issues about diabetes drugs and antidepressants on the same line getting allegedly mixed together. The sterility issues, it speaks of a really pretty chaotic, out of control manufacturing process. This was not apparently one isolated incident. It just looks like nobody was minding the store at this plant," Avorn said.

"What do you say to someone who says, 'Well the drug manufacturing process is very complicated very hard to do there are bound to be mistakes'?" Pelley asked.

"Just because something is complicated doesn't mean it's okay to get it wrong. We don't accept that of our brain surgeons or of our airlines, or of other complicated things in society. The reason we pay so much for drugs - more than any other country - is that we expect that in exchange for those high prices, the companies are gonna actually manage their manufacturing processes carefully," Avorn said.

Cheryl Eckard says her first warning to shut down the plant at Cidra came in August 2002. She continued to work, seven days a week, reporting to executives, but nothing seemed to be changing on the factory floor and the frustration was taking its toll.

"The director of manufacturing at the factory, maybe he was the VP of manufacturing at the factory, he pulled me aside and said, 'We can all tell that you've been crying. You come here every day 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?'" Eckard remembered.

After eight months of reporting problems at Cidra, Eckard sent a summary to seven executives detailing nine high-risk areas at the plant, including the mix-ups, the water contamination and the problems with sterility. She warned that if the FDA knew what the company knew, the government could seize the factory.

Weeks later, she was out of a job. Glaxo said it was downsizing.

Still worried about patient safety, Eckard took the same information she had sent to her Glaxo bosses and turned it over to the FDA.

Just as she had warned, federal agents executed a search warrant at the plant and ultimately seized defective drugs worth hundreds of millions of dollars.

"This case goes right to the heart of patient safety," attorney Neil Getnick told Pelley.

Getnick and Lesley Ann Skillen are Eckard's lawyers. And under the federal whistleblower law, they filed suit on behalf of the federal government claiming that Glaxo had defrauded the taxpayers.

Asked how this is fraud against the U.S. government, Getnick said, "Pharmaceutical drugs are paid for by our Medicare program for the elderly, by our Medicaid program for the impoverished. And here we have a situation where hundreds of millions of dollars were paid for adulterated drugs through our Medicaid programs."

Glaxo pleaded guilty to a felony. It admitted it distributed "adulterated drugs Paxil CR, Avandamet (a diabetes drug), Kytril (a drug given to cancer patients), and Bactroban." All together, the company paid $750 million to settle the criminal conviction and Eckard's suit.

"Can anything like this happen at Glaxo again?" Pelley asked Glaxo's Ian McCubbin.

"I absolutely hope not. We will work really hard to resolve these issues and make sure that our quality management system is in place and robust," he replied.

The plant at Cidra is closed. Glaxo says no drugs made there are on the market today and it says there is no evidence that anyone was hurt by the defective medications.

Under the whistleblower law, Eckard was rewarded with a percentage of the millions that the government recovered in the fraud suit. Her portion comes to $96 million.

"You know that there are people watching this interview who are saying, 'Well, she did it for the money,'" Pelley pointed out. "And to them you say what?"

"That I hope and I pray that their mothers and their brothers and their children have safer medicine today than they had before I filed that lawsuit," Eckard replied. "And I believe they will. Right? I believe they will."

Produced by Denise Schrier Cetta