Big Pharma facing law suits and increased regulatory scrutiny in the USA

Last month's settlement of a case against a major pharmaceutical company, UK giant GlaxoSmithKline (LSE: GSK), regarding production violations has ignited increased concern from the US Food and Drug Administration, comments South Africa-based www.stockcall.com.

The case in question claimed that GSK carelessly packaged drugs of varying strengths, different types, broken pills and the presence of microorganisms at facilities in Puerto Rico. The resolution included a criminal fine and forfeiture totaling $150 million and a civil settlement under the False Claims Act and related state claims for $600 million (The Pharma Letter October 27).

The egregious violations occurred almost a decade ago but the case was only settled recently. The settlement has been sufficient to spark further inquiries from the FDA as well as oversight organizations around the world. Global distribution of drugs is becoming an increasingly vital part of Big Pharma's revenues so the recent interest in scrutinizing production is a major cause for concern, say analysts at stockcall.