Baxter Healthcare News: Company Agrees To $18M Settlement For Sloppy Manufacturing Practices, Avoids Criminal Prosecution

Baxter Healthcare Corp. agreed to pay more than $18 million to avoid criminal prosecution and resolve civil penalties for failure to following proper manufacturing procedures in production of sterile drug products at its North Carolina plant, the Justice Department said Thursday.

The agreement includes $16 million in penalties and forfeiture, and $2.158 million in civil payments.

Baxter was accused of shipping adulterated large volume sterile intravenous solutions from its North Cove plant in Marion, North Carolina. The solutions were supposed to be made in a clean room with high-efficiency particulate absorption filters in the ceiling.

A criminal information filed Thursday alleged after an employee reported in July 2011 there was mold in the filter, manufacturing continued through November 2012 without the filter being changed. An inspection by the Food and Drug Administration found several species of mold.

Justice said there was no evidence the mold had any impact on the solutions.

Baxter admitted it distributed adulterated products and agreed to implement enhanced compliance provisions, including periodic certifications to the government regarding the implementation of the provisions.

“Today’s settlement shows that the government will continue to hold companies accountable for failing to fulfill this critically important responsibility,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.

The $2.158 million in the civil settlement will go to the Department of Veterans Affairs under the False Claims Act.

Christopher Wall, the Baxter employee who brought the situation to light in a whistle-blower suit, will receive $431,535.99 from the civil settlement.

Since January 2009, $31.4 billion has been recovered by the Justice Department through False Claims Act cases, with nearly $19.6 billion involving fraud against federal healthcare programs.

The settlement still needs federal court approval.

Failure to follow proper clean room protocols has had deadly results. Sixty-four people died and 800 were sickened in 2012 by a fungal meningitis outbreak as a result of sloppy manufacturing practices involving injectable steroids at the New England Compounding Center in Framingham, Massachusetts.