In The News

Baxter Healthcare Corporation Agrees to Pay the Government More than $18 Million Dollars to Settle Claims that it failed to follow Good Manufacturing Practices

The endangerment of patient health seems to be a recurring theme when it comes to the government’s efforts to crackdown on fraud. An example of this came last week when the Department of Justice announced that Baxter Healthcare Corporation (Baxter) had agreed to pay $18.158 million to resolve criminal and civil violations arising from Baxter’s failure to follow Good Manufacturing Practices (cGMP) with its drugs products. The resolution reached last week includes a deferred prosecution agreement and penalties and forfeiture totaling $16 million plus a civil settlement under the False Claims Act. This civil settlement totals more than $2 million. Baxter is headquartered in Deerfield, Illinois and has facilities all throughout the US and the world.

The criminal charges state that between July 2011 and November 2012, Baxter introduced into the interstate commerce drugs that violated the Federal Food, Drug and Cosmetic Act (FDCA) because the company did not follow cGMP practices when they were being manufactured. At its North Cove facility (Marion, North Carolina), Baxter manufactured sterile intravenous (IV) solutions in a clean room that were exposed to the presence of mold. According to an employee there, this was determined by the presence of mold on a HEPA filter. Baxter is alleged to have continued to manufacture these IV solutions for months after this problem was identified. Testing of the filters by an unannounced inspection from the U.S. Food and Drug Administration (FDA) also confirmed the presence of several mold species on the HEPA filters. The FDA found no proof that the IV solutions themselves were actually contaminated by the mold.

As part of the deferred prosecution agreement, Baxter admitted that it distributed products that were in violation of the FDCA. As a result of this agreement, Baxter will pay a total of $16 million and will implement enhanced compliance provisions. It must, for example, certify to the government periodically that it is implementing these manufacturing provisions. (The deferred prosecution agreement must be accepted by the U.S. District Court in order to become final.) “FDA’s manufacturing standards are designed to ensure the quality, safety, and efficacy of drugs distributed to American consumers, and FDA expects pharmaceutical companies to correct deficiencies in an expedited manner,” said Special Agent in Charge Justin Green of FDA’s Office of Criminal Investigations, Miami Field Office. “We will remain vigilant in our efforts to protect the U.S. public health from potentially dangerous products.” Additionally, Baxter will pay approximately $2.158 million to the Department of Veterans Affairs based on its failure to follow cGMPs and its violations of the False Claims Act.


The civil settlement resolves a lawsuit that was filed by Christopher Wall, an employee of Baxter, under the Whistleblower provisions of the False Claims Act. This provision permits private parties to sue on behalf of the government in cases of false claims and to share in any monetary recovery. Mr. Wall is scheduled to receive $431,535.99 from the proceeds of the civil settlement. The settlement illustrates the government’s ongoing efforts to combat health care fraud which it has accomplished through its Health Care Fraud Prevention and Enforcement Action Team (HEAT). A powerful aid in achieving this goal has been the Whistleblower provisions of the False Claims Act. Whistleblower Medicare cases alone have resulted in millions in payouts to individuals who have reported illegal activities committed by private firms. If you believe you have a qui tam Medicare case, you should contact a Whistleblower law firm for advice.