Baxter is one of the largest pharmaceutical companies in the world. With 67 manufacturing plants and 48,000 employees, Baxter is one of the biggest manufacturers of sterile IV solutions. Last year the company was ordered to pay $18 million after a whistleblower stepped forward and said the company’s Marion, North Carolina “clean room” was anything but clean. Under FDA “CGMP” regulations (“current good manufacturing practices”), IV solutions must be manufactured and packaged in absolutely sterile conditions.
Pharmaceutical companies pay millions of dollars to build clean rooms. Just like you see on TV, workers are required to gown up and anything entering the room must be first be sterilized. Part of maintaining a sterile environment includes keeping air handling equipment clean. A clean room won’t stay clean very long unless the air circulating in the room is constantly filtered. And that is exactly what one whistleblower said was the problem at the North Carolina Baxter plant.
So just how much trouble can you get in for violating FDA current good manufacturing practices for air handling equipment and cleanliness? Last year Baxter Healthcare Corporation again learned its lesson the hard way, agreeing to pay $18.158 million to resolve both criminal and civil allegations that its North Carolina drug manufacturing facility failed to follow current good manufacturing practices (CGMPs).
Drug makers use HEPA filters to keep the air in the clean rooms clean. HEPA is short for high-efficiency particulate air. A HEPA filter works by forcing air through an extremely fine mesh. Harmful particles such as pollen, pet dander, dust mites, and even smoke are caught in these filters. Like the filter on a vacuum, HEPA filters need to be constantly replaced. If the filters are not clean, they can become bacteria magnets.
By refusing to change moldy HEPA filters involved in the manufacture of sterile intravenous (IV) drug solutions, Baxter Healthcare Corporation violated the federal False Claims Act, agreeing to a $2.158 million civil settlement. Baxter HVAC technician, Christopher Wall, collected a $431,000 cash whistleblower award for reporting the violations. (The remainder of the settlement was tied to violations of the Food, Drug and Cosmetic Act. Baxter was allowed to resolve the charges without pleading guilty to any criminal charges.)
Baxter Management Told HVAC Tech To “Just Wipe It Off”
Baxter Healthcare Corporation employee Christopher Wall owes his successful whistleblower claim to powerful photo evidence he obtained while working as an HVAC tech at Baxter’s Marion facility, North Cove.
His photos of mold growing on HEPA filters situated near IV bag filling machines prompted a 2012 FDA inspection that found “several mold species and other particulate matter” on air filters involved in the production of IV solutions – solutions that, if contaminated, can kill a patient within a matter of days.
Case documents filed in U.S. District Court suggest the IV solutions produced at Baxter’s North Cove facility account for around 60% of all sterile IV solutions used in U.S. hospitals. The drug packaging machine involved in the case filled about 60,000 IV bags per day.
Christopher Wall, who has been working for Baxter since 1979 (and still does), initially notified management about the moldy filters and potential contamination concerns in 2011, and again in 2012. Wall claims management told him to “just wipe it off” and not to replace the filters.
Like most conscientious pharma workers, Wall spoke to his boss and then his boss’ boss. When that didn’t work he spoke with a senior manager, Human Resources and ultimately the plant manager. Nothing. Ultimately, managers were getting tired of Wall’s complaint. One told him, “Whatever you do, don’t bring up changing the HEPA filters.”
The contaminated HEPA filters remained, during which time Wall took photos and used them to file an FCA whistleblower lawsuit claiming Baxter knowingly billed the Department of Veterans’ Affairs for the illegally manufactured IV solutions.
Most whistleblowers try to fix problems internally before reporting outside. Wall was no exception. Only after unsuccessfully telling four different layers of management and being ignored did Wall become a Baxter whistleblower.
Wall’s powerful photo evidence of FDA CGMP violations prompted a 2012 FDA investigation (the filters remaining in place for 16 months until just prior to the inspection).
“Despite notification by an employee of potential contamination concerns, Baxter was poorly focused on instituting sufficient safety standards for their products,” said U.S. Attorney for the Western District of North Carolina, Jill Westmoreland Rose.
Filter testing revealed several species of mold growing on the HEPA filters. While the FDA found no evidence of IV fluid contamination coming out of the Marion facility, they did conclude that Baxter had knowingly violated FDA CGMP regulations – and that’s all that is required to file an FCA whistleblower claim.
CGMP Non-Compliance Violates False Claims Act
Under the Federal Food, Drug, and Cosmetic Act, the government claimed that, between July 2011 and November 2012, Baxter introduced adulterated drugs into interstate commerce by failing to comply with FDA cGMP.
The Baxter settlement is the third FDA CGMP False Claims Act settlement in recent years, (following the $750 million GalaxoSmithKline case and the $505 million Ranbaxy case) highlighting the popularity of these claims.
QA professionals, drug calibration specialists, laboratory technicians, pharmaceutical sales reps, public health administrators, drug manufacturing company executives and other pharmaceutical safety or quality control professionals are the most common people to run across violations and file FDA CGMP whistleblower claims.
Those with knowledge of CGMP violations may qualify for a whistleblower award as long as that product or the company that produced it is involved in a government-funded program like Medicare, Medicaid or TRICARE. [Most pharmaceuticals qualify.]
Any company that violates the FCA must pay between $11000 and $21000 per false claim, plus treble damages. For exposing FDA CGMP violations, FDA pharma whistleblowers collect between 15% and 30% of the total government recovery.
Baxter Enters Deferred Prosecution Agreement – Pays $18M
Baxter has agreed to pay approximately $2.158 million to settle allegations that, as a result of its CGMP non-compliance, the drug manufacturer caused the submission of false claims to the Department of Veterans Affairs in violation of the FCA. Whistleblower Chris Wall will receive nearly 20% of the settlement amount ($431,535.99) as his cash award.
In addition, Baxter entered a deferred prosecution agreement admitting that it distributed adulterated drugs in interstate commerce in violation of the Federal Food, Drug, and Cosmetic Act.
Under the agreement, Baxter must draw up improved compliance policies, submit regular reports to the government regarding the execution of these new policies, and pay penalties and forfeitures equaling $16 million. The company was able to settle without a formal plea of guilt.
“Following current Good Manufacturing Practices is essential to ensure the safety and efficacy of our drugs,” said Benjamin C. Mizer, the Justice Department’s Civil Division Head and Principal Deputy Assistant Attorney General. “Today’s settlement shows that the government will continue to hold companies accountable for failing to fulfill this critically important responsibility.”
We are amazed that Baxter spent millions of dollars on building clean rooms but decided to cheap out on the filters. This case being on the heels of another adulteration case involving Baxter, one where approximately 100 Americans were believed to have died because of adulterated heparin manufactured by Baxter.
Call for Baxter Whistleblower (Pharmaceutical Whistleblowers)
The 2007 Baxter heparin deaths were tragic and preventable. Baxter won’t say how much it paid to settle the cases stemming from the poisonous heparin. (The company admits that some people had a “reaction” to the drug.) We believe, however, that there were 740 lawsuits against the company. All but one appear to have confidentiality provisions (gag orders) preventing victims or their families from discussing the cases.
In the 2007 case, no one from Baxter stepped forward initially and became a whistleblower. Dozens of lives could have been saved. Fortunately, Christopher Wall stepped forward in 2012. His actions may have saved countless lives.
Whistleblowers are the new American heroes. They play an essential role in the pharmaceutical world. The FDA simply does not have enough staff to inspect every facility and every smaller company that makes the active ingredients for drugs. There are literally over ten thousands of these plants worldwide.
The FDA relies on pharmaceutical whistleblowers to step forward and report violations. Under the False Claims Act, these whistleblowers are entitled to between 15% and 30% of whatever the government collects from the wrongdoers. Their actions save lives and save taxpayers billions of dollars each year.
With 67 plants worldwide, we wonder if Baxter will ever learn their lesson. That is why we are actively seeking a Baxter whistleblower (or whistleblower from any pharmaceutical company.)
Not a US citizen? Not a problem. False Claims Act whistleblowers can be paid to citizens and non US citizens alike. All you need is original source (inside) information.
For more information, contact us online, by email or by phone at (direct). You can also visit our pharmaceutical and FDA whistleblower page. All inquiries are protected by the attorney – client privilege and kept confidential. We take cases worldwide if the drugs are being marketed in the US. There is no fee for our services unless we win your case and you collect an award.