A week before Eli Lilly (LLY.N) revealed to regulators that the US Department of Justice was investigating its New Jersey plant, the drugmaker told employees that its own investigation, conducted by a firm of outside attorneys, had found no evidence of wrongdoing there, according to a company memo reviewed by Reuters.
On April 8, a group of employees filed an anonymous internal complaint alleging that an executive at its Branchburg, New Jersey plant had changed documents required by the U.S. Food and Drug Administration.
As Reuters reported last month, Lilly brought in Washington DC law firm Covington & Burling LLP to investigate the alleged changes, which employees said were aimed at downplaying serious quality control issues. in the drug manufacturer’s COVID-19 antibody treatment plant.
In a note to Branchburg employees on May 20, Nellie Clark, plant manager, summarized the findings of the outside lawyers: “Ultimately, and this is very important, the allegations that Lilly made false claims to the FDA were unfounded. “
A week after the note was released to employees, Reuters reported that the Justice Department launched a criminal investigation focused on the Branchburg plant. That same day, May 27, Lilly reported to the United States Securities and Exchange Commission that she had received a subpoena from the department requesting documents related to the plant.
The company said it was cooperating with the Justice Ministry’s investigation and that an external law firm “is also fully investigating these allegations.”
It was not clear which investigation – the company or the government – was launched first and to what extent the topics coincide. However, as Reuters reported last month, based on three sources familiar with the matter, the Justice Department’s investigation into Lilly includes a review of allegations of manufacturing irregularities and falsification of records.
Lilly spokeswoman Kathryn Beiser and a spokesperson for the Department of Justice declined to comment. Clark did not respond to a request for comment. A Covington spokesperson did not respond to a request for comment or a request for a copy of the company’s report.
The Covington investigation is important because Lilly’s handling of any allegations by employees will likely be considered by U.S. prosecutors when they assess whether there are grounds to pursue criminal prosecution, bring a civil action, or sue. refuse to bring an action, said several legal experts.
Government prosecutors often wonder if a company made a real effort to investigate and deal with potentially illegal activity once they became aware of it.
If the Justice Department concludes that an internal investigation was thorough, it may result in a no-prosecution agreement with little or no penalties, experts said. However, a company-led investigation that appears to have been mismanaged could lead to more difficult results.
“Whenever a company hires an outside lawyer to conduct an investigation, the Department of Justice takes it very seriously,” said Paul Pelletier, a longtime former federal prosecutor who oversaw corporate criminal investigations.
Covington has handled dozens of cases for Lilly over the past 20 years, according to the Westlaw Database of Legal Cases and Press Releases, including intellectual property issues, personal injury lawsuits and class actions.
The firm also has several attorneys whose reputations would hold weight with the Justice Department and the FDA, including former Attorney General Eric Holder, legal experts have said. Gerald Masoudi, the Covington partner who handled the recent investigation for Lilly, previously served as chief counsel for the FDA. Masoudi did not respond to requests for comment.
ANSWERING DIFFERENT QUESTIONS
The company-backed survey was based on interviews with more than 100 people, according to the May 20 memo to Lilly employees. However, the memo did not address all of the employee concerns raised in their April complaint, which Reuters reviewed.
The memo denies that the company made any false claims to the FDA. In their complaint, employees said they were generally concerned that the quality control documents the FDA requires companies to maintain have been rewritten or fabricated. Employees did not say whether the materials had been shown to the FDA.
The company’s memo said Lilly could not substantiate allegations that employees risked retaliation for refusing to make false statements. He did not address specific complaints from employees that they were being retaliated against for other reasons, except to say that he encouraged employees to “speak up.”
The Branchburg plant was first reviewed by the FDA in late 2019, when the agency’s inspectors began documenting numerous quality control issues. As of March 2020, the FDA had rated manufacturing issues as “indicated official action,” its most serious category of violation.
Lilly is committed to fixing the issues and said none of them affected the drugs on the market. The FDA, which took no public action, did not respond to requests for comment.
In March 2021, Reuters reported that a former Lilly human resources manager, Amrit Mula, had internally identified some of the same violations later documented by the FDA. Mula was forced out of the company in early 2019 after Lilly executives sought to play down her findings, according to a letter demanding compensation for damages her lawyers sent to the company.
Lilly has denied retaliating against employees and no lawsuits have been filed on Mula’s behalf.
In October 2020, the Trump administration ordered $ 375 million worth of COVID-19 antibody therapy bamlanivimab from Lilly, which is manufactured at the Branchburg plant.
One US Senator, New Jersey Democrat Bob Menendez, called the allegations of manufacturing irregularities and falsification of records at the Branchburg plant “troubling.” Menendez sponsored a bill calling for a non-partisan and independent COVID-19 commission to examine the US response to the pandemic, including government contracts with companies.
“These reports have raised serious questions that need answers,” Menendez said of Reuters coverage. “I expect this administration will coordinate across agencies to get to the bottom of this and that Eli Lilly will cooperate fully with any ongoing investigation.”
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