Firm Settles Allegations of Manipulating Production Data
Leiner Health Products agreed to forfeit $10 million and plead guilty to one count of wire fraud under a proposed settlement with the Justice Department concerning charges that the firm manipulated stability data at its OTC production facility.
Justice alleges that the manipulation occurred in December 2006 at Leiner’s Fort Hill, S.C., plant. The company said it has revamped its entire quality control operation, and the facility has been discontinued.
According to a motion submitted by Leiner to the U.S. Bankruptcy Court for the District of Delaware, the settlement would resolve charges that the firm “gave the false appearance that certain drugs had passed stability testing and allowed nonconforming drugs to be shipped to customers.”
The company, which is in Chapter 11 bankruptcy proceedings because the quality control problems have affected sales, is asking the court to let it enter into the plea agreement.
The data manipulation charges were detailed in an August 2007 warning letter citing Leiner’s OTC drug manufacturing operations at Fort Hill. The letter, issued by the FDA’s Atlanta District Office, resulted from a Jan. 22 through March 16, 2007, inspection of the site.
The letter cited the company for “extensive manipulation of data with no explanation regarding why the manipulation was conducted. This manipulation would include changing integration parameters or re-labeling peaks such that previously resolved peaks would not be integrated and included in the calculation for impurities.”
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