Record Fine Imposed on Generic Drug Maker

By Henkel, John | FDA Consumer, November-December 1997 | Go to article overview

Record Fine Imposed on Generic Drug Maker


Henkel, John, FDA Consumer


Massachusetts-based Copley Pharmaceutical Inc. was ordered to pay $10.65 million--the largest fine ever imposed on a drug company--for defrauding FDA by manufacturing four generic drugs using false abbreviated new drug applications.

The drugs were potassium chloride, a prescription time-release tablet used to treat potassium deficiency; procainamide, a prescription drug for treating irregular heartbeat; brompheril, an over-the-counter time-release antihistamine and nasal decongestant tablet; and hydrocortisone acetate and pramoxine hydrochloride, a prescription foam used to relieve rectal inflammation.

Copley, which is majority-owned by the large German chemical firm Hoechst AG, was sentenced June 19 in the U.S. District Court for the District of Massachusetts. The company pleaded guilty to a one-count criminal information, which charged that the company:

* changed manufacturing methods from those approved by FDA

* falsified records to cover up deviations from approved manufacturing processes

* submitted to FDA false annual reports for approved drugs (which did not disclose manufacturing changes)

* failed to seek FDA approval for manufacturing changes.

Prosecutors stated at the sentencing that Copley's wrongdoing "was no paperwork error" and that the company intentionally deceived FDA.

An investigation continued at press time, and though the company was fined, individuals within Copley still could be charged with criminal violations, according to FDA officials. The company also agreed to take corrective actions, including hiring independent auditors approved by FDA to audit 20 Copley drug applications.

"The public needs to have confidence when using generic drugs that [companies] are following the correct, approved manufacturing procedures," says U.S. attorney Donald Stern, whose Boston office prosecuted the fraud case.

The agency had previously uncovered regulatory troubles at the company. In December 1993, Copley, at FDA's urging, recalled nearly 4 million bottles of the asthma drug albuterol sulfate solution for inhalation, the company's best seller, because it was contaminated with Pseudomonas bacteria. A number of albuterol-related lawsuits were instituted in 1995 on behalf of patients harmed as a result of Copley's product. One such class-action suit resulted in a settlement in which the company agreed to pay plaintiffs up to a total of $150 million.

In early 1994, FDA became concerned about information Copley was submitting to satisfy legal requirements for its drug products. "We had suspicions about what they were putting in their applications. The data seemed unrealistic," recalls Sharon Norris, investigator for FDA's special prosecution staff, a group of experts that investigates complex, document-intensive criminal cases of application, reporting and manufacturing fraud involving FDA-regulated products. "Things just didn't add up," she says.

As the investigation continued, Norris says, "we uncovered potentially incriminating evidence about the company's reporting procedures."

In June 1994, two brothers who worked for Copley, Mark and Mike Riley, went to the U. …

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