Baxter to pay $18 million
over mold at North Carolina plant
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[January 13, 2017]
By Eric Beech and Sarah N. Lynch
WASHINGTON (Reuters) - Baxter International
has agreed to pay $18 million to resolve its criminal and civil
liability over claims its unit ignored mold in air filters at a plant
where sterile intravenous solutions were made, the U.S. Justice
Department said on Thursday.
The resolution includes a deferred prosecution agreement and
penalties and forfeiture totaling $16 million and a civil settlement
under the False Claims Act with the federal government totaling
approximately $2.158 million, the Justice Department said in a
The government charged that managers at Baxter Healthcare Corp's
North Cove plant in Marion, North Carolina, ignored an employee's
warning that mold was found in air filters in the ceiling of the
room where sterile intravenous solutions were manufactured, the
There was no evidence, however, that the mold affected the quality
of the IV solutions, which were manufactured from July 2011 to
November 2012, the department said.
A Baxter spokeswoman said the handling of the mold concerns "was not
consistent with Baxter's standards" and the company had made some
changes as a result.
"We took a number of actions to address these issues, including
terminating several members of the facility’s management team and
enhancing the training and compliance processes for employees
throughout the facility," Baxter spokeswoman Deborah Spak said in a
Problems with mold in Baxter's air filters were revealed several
years ago, after FDA inspectors issued the company a warning letter
about the problem.
"We are especially concerned that you have not identified the root
cause that allowed the mold to proliferate" to a level that was too
numerous to count, the FDA said in its May 2013 letter.
The letter also said the mold problem represented a "repeat
violation" from a 2012 inspection.
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The civil portion of Thursday's settlement came about after
Christopher Wall, a Baxter employee, blew the whistle and filed a
False Claims Act lawsuit.
He will recover a little more than $431,500 from the case.
While the quality of the IV solutions were not affected by the mold
in this case, the company has had a number of recall product recalls
over the last few years in connection with quality problems.
Some lots of IV solutions, for instance, were previously recalled
after a customer discovered an insect.
Baxter also in 2014 recalled some of its dialysis products due to
(Reporting by Eric Beech and Sarah N. Lynch; Editing by Diane Craft
and Cynthia Osterman)
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