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Pharmaceutical Fraud: When Violating a Contract Can Lead to Defective Drugs

We believe that Americans should be able to trust in our medical system. In accordance with this trust, we should be able to count on the companies that manufacture and sell our pharmaceuticals to keep our safety foremost in mind. A recent case brought by the government (and a brave whistleblower) against a vaccine distributor provides an example of the all-too-frequent violations of this trust. It is a case that reminds us that, in the health care arena, violating contractual obligations can put defective drugs on the market and can endanger the health of countless trusting patients.

Pharmaceutical Company Settles Case Involving Vaccine Distribution Agreements

Earlier this month, McKesson Corporation agreed to pay $18 million to settle allegations brought by the Centers for Disease Control ("CDC") against the San Francisco pharmaceutical distributor. A press release from the Department of Justice ("DOJ") explains that, under vaccine distribution agreements with the CDC, McKesson was to distribute government-purchased vaccines to health care providers. In the lawsuit, the government alleged that, between April and November 2007, McKesson failed to set electronic temperature monitors properly. The contracts required the use of these monitors in order to maintain an appropriate temperature during shipping. The suit was based on the False Claims Act, with the CDC suggesting that McKesson knowingly submitted claims for payment despite not meeting its contractual obligations.

McKesson representatives told the journal Modern Healthcare that it settled because of the uncertainty of any trial and insists no vaccines were compromised. Thankfully, the CDC agrees with the latter statement and the DOJ notes that redundant measures are used to ensure vaccine safety. In this case, packing procedures are actually the primary method of temperature control and the temperature monitors at issue are a secondary safeguard.

The Public Health Consequences of Violating Contractual Obligations

While we are glad that the vaccines remained safe, we also agree with concerns expressed in the DOJ press release. Special Agent Derrick Johnson with the Department of Health and Human Services notes the importance of ensuring those involved with programs aimed at protecting children comply with their contractual obligations. Voicing similar concerns, Stuart Delery, an Assistant Attorney General in the Justice Department, emphasizes that failing to comply with requirements in such contracts "could jeopardize the integrity of products, like vaccines, that Americans count on to be safe."

Suppose the people in charge of packaging opted to skirt their legal duties at the same time as temperature monitors were not set properly? Suppose those in charge of each of the so-called "redundant measures" skipped their duties, each assuming the other would prevent a negative consequence? What if a vaccine or other pharmaceutical product became ineffective because of such acts? Or worse, what if the medication sickened people instead of helping them?

False Claims Act suits focus on fraud against the government. In far too many cases, these frauds involve health care and/or pharmaceuticals and the acts (or inaction) can have serious health consequences. When people are sickened or die because a company failed to live up to its safety-related contractual duties, the same conduct that results in a False Claims Act case can also give rise to a personal injury or wrongful death claim. Our law firm works on such cases, helping recover money damages for people who were injured or lost a loved one because of a pharmaceutical company's unsafe practices. Call if we can help you.

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