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In Plain Sight: GSK's Avandia Mess Eclipses Federal Probe of Paxil Factory
1. In Plain Sight: GSK's Avandia Mess Eclipses Federal Probe
of Paxil Factory
Last Updated Jul 15, 2010 12:24 PM EDT
GlaxoSmithKline (GSK) appears to be trying to get all its bad news
out at once with its announcement of a $2.36 billion writedown for legal expenses. The charge
includes costs for its recent Avandia woes -- it settled about 10,000 cases for $460 million -- but $750
million of it ends a Department of Justice investigation of its Paxil and Avandamet factory in Cidra,
Puerto Rico.
If your reaction to that was, "Wait, what Paxil investigation?" you're not alone. In fact, the feds have
been probing GSK's Cidra operations since late 2002, and the Avandia mess conveniently eclipses a
scandal about the way Paxil (an antidepressant) and Avandamet (a diabetes drug that uses Avandia
as an ingredient) were made. Here's the timeline:
In 2002, the FDA cited the Cidra factory being dirty and lacking quality control. Paxil pills could split
apart or deliver too much or too little medicine.
In 2003, "the US federal government executed a search warrant at the Cidra facility and seized
records relating to the manufacturing operations at the site," GSK said in its 2009 annual report.
In March 2005, U.S. Marshalls raided the factory and seized its supply of the antidepressant Paxil
and Avandamet, a diabetes drug that uses Avandia as an ingredient. The feds used harsh language
that suggested GSK was a scofflaw: "FDA and the Department of Justice will not allow drug
manufacturers to ignore our high public health standards for drug manufacturing ... Once we
discover a company is not following the standards, which were created to ensure safety and quality,
we expect them to correct the deficiencies in an expedited manner."
In April 2005, the Boston U.S. Attorney's office sent several subpoenas to GSK requesting records
from the factory, according to the annual report. Also that month, GSK signed a consent decree with
FDA to correct its deficiencies at Cidra. The decree required GSK to post a bond of $650 million
contingent upon GSK either reconditioning the seized drugs or destroying them and paying costs to