A generic drug manufacturer based in Bucks County, Pennsylvania, pleaded guilty to criminal charges on March 6, 2024. The charges were related to introducing adulterated drugs into interstate commerce. The company’s corporate affiliate was also implicated in the case.
As part of a plea agreement, the manufacturer admitted guilt and agreed to a $1.5 million fine and forfeiture. Meanwhile, the corporate affiliate entered into a three-year deferred prosecution agreement (DPA). This DPA allows the corporate affiliate to avoid conviction if it complies with terms that include implementing a compliance program to prevent future violations of federal regulations.
The companies acknowledged that between January 2011 and October 2013, the corporate affiliate introduced 62 batches of adulterated hydroxyzine tablets into interstate commerce. These tablets contained an active pharmaceutical ingredient (API) produced at a foreign facility. Additionally, between February 27, 2019, and April 16, 2019, the corporate affiliate manufactured prescription drugs without proper controls over computer systems, violating current good manufacturing practices regulations.
Furthermore, the corporate affiliate has agreed to pay $2 million to settle its civil liability under the False Claims Act. This liability stems from the company’s failure to implement proper controls as mandated by current good manufacturing practice regulations. As a consequence, the corporate affiliate introduced adulterated drugs into interstate commerce.
Between February 27, 2019, and April 16, 2019, the corporate affiliate sold these adulterated pharmaceuticals, leading to alleged false claims submitted to federal healthcare programs in violation of the False Claims Act.
Compliance Perspective
Issue
US consumers rely on Food and Drug Administration (FDA) oversight to ensure that the drugs they receive are safe and effective. Title II of the Drug Supply Chain Security Act (DSCSA) outlines steps to achieve interoperable, electronic tracing of products at the package level to identify and trace certain prescription drugs as they are distributed in the United States. This enhances the FDA’s ability to help protect consumers from exposure to drugs that may be counterfeit, stolen, contaminated, or otherwise harmful. Medications obtained from unlicensed sources may present safety issues since they have been manufactured or held outside of the jurisdiction of the FDA’s oversight. These medications may not be safe and effective for their intended uses and must be avoided in healthcare settings, where medications may only be obtained from authorized sources.
Discussion Points
- Review your medication management policies to ensure they include the requirement for purchasing all medications administered to residents from licensed pharmacies in the United States. Update as needed.
- Train appropriate staff about F755 Pharmacy Services requirements for obtaining medications only from US licensed pharmacies and their responsibility to ensure this is followed as they provide medications to residents. Offer education to residents and resident representatives at the time of admission and through Resident Council on approved pharmacies used by the facility for acquiring medications, including that medications from unauthorized sources may not be brought to the facility for resident safety purposes. Document that this training occurred and place a signed copy of the training record in the employee’s education file, in resident records, or in Resident Council meeting minutes.
- Audit to ensure that all medications administered to residents are obtained from a licensed pharmacy in the US and properly labeled. If concerns are identified that residents, their representatives, or visitors are providing counterfeit or other non-FDA approved medications from unauthorized sources, immediately secure the suspect medications and notify the administrator, director of nursing, compliance and ethics officer, or call the Hotline.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
