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Complaint Against SoCal Drugmaker Dismissed

SAN FRANCISCO (CN) - A federal judge dismissed without prejudice a lawsuit accusing California-based drugmaker Gilead Sciences of fraudulently using substandard ingredients from a Chinese company and retaliating against an executive who objected.

Gilead Sciences develops, manufactures and markets prescription drugs to treat life-threatening conditions, such as HIV and AIDS, cystic fibrosis, hepatitis and cardio-pulmonary diseases and conditions, U.S. District Judge Edward Chen wrote in his Jan. 7 order.

Gilead, based in Oceanside, obtains the active ingredients for its drugs from multiple sources and distributes most of its final products through state and federal health care programs, such as Medicaid and Medicare.

Gilead Sciences' former senior director of global quality assurance Jeff Campie and its current associate manager of quality control, Sherilyn Campie claimed the company violated FDA regulations.

Beginning in 2008, the Campies claimed, Gilead began using ingredients from Synthetics China to manufacture HIV/AIDS drugs to reduce costs. They say the FDA did not approve use of those ingredients until about two years after Gilead began using them.

The Campies also claim Gilead lied to the FDA to get permission to use ingredients from Synthetics China. Gilead claimed it bought three batches of ingredients from Synthetics China that passed testing and were equal to the ingredients produced by other manufacturers, the Campies said, but they claimed two of the three batches in fact failed the company's internal testing.

One batch had excessive solvent levels and other impurities and a second had "microbial contamination" and contained "arsenic, chromium and nickel contaminants," the Campies said.

The Campies claimed Gilead concealed its use of the Chinese ingredients by importing them via Canadian companies, by claiming the ingredients would be used in trial drugs instead of commercially, and by claiming that an approved supplier, Yuhan, made the ingredients instead of Synthetics China.

The Campies accused Gilead of violating the False Claims Act, and of retaliation for firing Jeff Campie in January 2009 after he raised concerns about using the ingredients.

Gilead filed a motion to dismiss, saying the Campies did not state a "viable FCA [False Claims Act] action."

Gilead claimed that "at no point during the Medicaid or Medicare reimbursement process" did the company claim the drugs complied with federal safety regulations, Chen wrote. "It contends there was no false or fraudulent statement made in connection with the request of reimbursement."

Because the Campies accused Gilead of lying to the FDA, and not to Medicaid or Medicare regulators, Chen found that their claims against Gilead fail.

Chen also said Campie's retaliation claims "fail at this stage for the simple reason that there are insufficient allegations from which it can be inferred that any adverse employment action he suffered was caused by his engaging in protected activity under the FCA or FLSA [Fair Labor Standards Act]."

Chen dismissed without prejudice both claims against Gilead and gave the Campies until Feb. 9 to file an amended complaint.


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