A company will pay $16 million in fines and other penalties to settle lawsuits claiming that a North Carolina plant knowingly produced millions of IV bags in rooms that had moldy HVAC filters Observer staff
A health care company will pay more than $18 million in fines and other penalties after prosecutors said its manufacturing plant west of Charlotte knowingly produced millions of hospital IV bags in rooms with active mold infestations.
According to government documents unsealed this week, Baxter Healthcare will pay a $2.2 million fine and forfeit another $16 million in profits to settle criminal charges and a whistleblower complaint filed by a longtime employee. Prosecutors say Baxter was assessed the fine after being charged with submitting false claims to the Department of Veterans Affairs based on the company’s failure to follow good manufacturing practices at its North Cove plant in Marion.
In the criminal complaint, the U.S. Attorney’s Office accused the company of “introducing an adulterated drug into interstate commerce.”
According to Charlotte attorneys Tommy Odom and Tony Scheer, employee Chris Wall notified the government about the mold problem after his superiors repeatedly failed to fix it. Prosecutors say that under federal law, private parties can sue on behalf of the government and receive a share of the recovered money.
“This guy did everything you’d want of a loyal employee,” Scheer said in a statement. “He tried repeatedly to get his managers to make it right … He only sought us out to help stop it when it was clear that those productions lines were going to keep cranking out hundreds of thousands of IV bags a day where he feared potentially deadly conditions existed.”
Deborah Spak, the company’s director of global communication, said Friday that while the handling of the mold problems “was not consistent with Baxter’s standards, there has been no evidence” that its North Cove products were contaminated. She said the company fired some of its Marion managers and put enhanced safeguards in place for better testing and monitoring, while cooperating fully with the government to resolve the matter.
The operation in question is a massive one. North Cove, about 100 miles northwest of Charlotte, is the largest IV-solution plant in the world, prosecutors say. It has more than 2,000 employees, and from July 2011 to November 2012 produced 60 percent of the IV bags used by all U.S hospitals, or about 1.5 million bags a day, court documents say.
Two of its production lines, however, had chronic mold problems in the filters of ventilation lines into two “clean rooms” where the supposedly sterile bags were filled, the government alleges.
Under company practices, the filters were to be inspected, tested and replaced as needed during annual maintenance shutdowns.
Starting in 2006, Wall and North Cove’s other HVAC employees were told to stop using the word “mold” in their inspection reports of the filters. According to court documents, when Wall used the word anyway on several reports, his superiors changed it to “discoloration” or “stain.”
In July 2011, Wall discovered an apparent mold outbreak on 15 filters in the Line 11 clean room, documents say. He and another employee had replaced five when a supervisor told them to stop. The rest of the unsafe filters – some directly above where the IV bags were filled – were left in place for months, the government says.
In the following days, Wall took his concerns all the way to the plant manager, documents say, but little was done and the problem appeared to worsen.
During a July 2012 maintenance shutdown, Wall reported that he had found 29 moldy filters in the Line 11 room – filters that again were not replaced.
In frustration, Wall eventually reported the problem to the federal Food and Drug Administration, his attorneys say. The agency made a surprise inspection on the plant in November 2012. It, too, found mold.
Odom said the plant’s violations “had potential serious and far reaching consequences” to U.S. patients who need IV fluids.