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A former officer of Fendih Medical Supply Inc. was sentenced to serve 51 months in prison yesterday in Los Angeles for his role in a fraud scheme that resulted in $1.5 million in fraudulent claims to Medicare. In addition, a physician was sentenced to 27 months in prison for his role in the scheme.

A pest control services company and its owner have been charged today in the U.S. District Court for the Middle District of Georgia with conspiracy, unlawful use of pesticides, false statements, falsification of records and mail fraud, announced Robert G. Dreher, Acting Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division and Michael J. Moore, U.S. Attorney for the Middle District of Georgia.

A former owner of a Los Angeles medical equipment supply company has been indicted for allegedly engaging in a $4 million Medicare fraud scheme.

A former owner of a Salt Lake City medical equipment supply company has been indicted and three former company employees have pleaded guilty for allegedly engaging in a $20 million Medicare fraud scheme.

The owner of a Louisiana medical equipment supply company and a marketer who worked for the company have been indicted for allegedly engaging in a $3 million Medicare fraud scheme.

Keith Johnson, 46, and his wife, Angela Johnson, 44, of Maryville, Tenn., pleaded guilty today to their roles in a $9.7 million procurement fraud scheme.

Several California companies and individuals that formerly supplied beef to the National School Lunch Program have agreed to settle allegations of inhumane handling of cattle, circumventing appropriate inspection of nonambulatory disabled (“downer”) cattle and false representations regarding their eligibility to process beef.

A former employee of a Florida-based airline fuel supply service company pleaded guilty today to obstructing an investigation into fraud and anticompetitive conduct in the airline charter services industry.

A former owner and operator of a Florida-based airline fuel supply service company pleaded guilty today to participating in a kickback scheme to defraud Illinois-based Ryan International Airlines, a charter airline company located in Rockford, Ill.

Steven A. Murray, 54, of Pelham, Ala., and his company, Bio-Tech Management Inc., pleaded guilty today in federal court in Macon, Ga., to charges of conspiracy, unlawful use of pesticides, false statements and mail fraud in connection with the misapplication of pesticides in Georgia nursing homes.

A co-owner of a Middlesex, N.J., industrial pipes, valves and fittings supply company pleaded guilty today to one count of making a false statement.

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A former owner and operator of a Florida-based airline fuel supply service company was sentenced today to serve 50 months in prison for participating in a scheme to defraud Illinois-based Ryan International Airlines.

The Justice Department announced today that U.S. District Court Judge Otis D. Wright II of the Central District of California entered a consent decree of permanent injunction against GM Manufacturing Inc. (GMM) and Mao L. Yang, Mary Chen and David Yang on Friday, June 20, 2014, to prevent the distribution of adulterated dietary supplements

The Justice Department announced today that the U.S. District Court for the Eastern District of New York has entered a consent decree of permanent injunction against Triceutical Inc. and its president, Liqun Zhang, of Farmingdale, New York, to prevent the distribution of adulterated dietary supplements

The Justice Department announced today that it has filed a complaint against Midwest Neurosurgeons L.L.C. and its owner, Dr. Sanjay Fonn, M.D., and DS Medical L.L.C. and its owner, Deborah Seeger, for allegedly violating the Medicare Anti-Kickback Statute and the False Claims Act by conspiring to solicit and receive commissions from medical device manufacturers related to the purchase of spinal implants and supplies used during spinal fusion surgeries performed by Dr. Fonn

The Justice Department announced today that the U.S. District Court for the Eastern District of New York has entered a consent decree of permanent injunction against Applied Polymer Systems dba APS Pharmaco (APS) and its president, Nuka Reddy, all of Lindenhurst, New York, to prevent the distribution of adulterated dietary supplements

On July 31, 2014, a federal jury in Los Angeles found that the former owner of a durable medical equipment (DME) supply company located in Carson, California, was guilty of health care fraud charges relating a 10-year scheme in which Medicare was fraudulently billed more than $8 million for DME that was not medically necessary

Rend Al-Mondhiry has joined the firm Amin Talati from the Council for Responsible Nutrition (CRN) as Senior Counsel, resident in the Washington, D.C. Office.

In this SupplySide West edition of the Healthy INSIDER podcast, Rachel Adams, managing editor, and Scott Steinford, founder and CEO of Trust Transparency Consulting, discuss the role of transparency in establishing trust with supplements consumers.  

The Organic Trade Association and The Organic Center on Thursday applauded Senators Bob Casey (D-PA) and Susan Collins (R-ME) for introducing The Organic Agriculture Research Act of 2018.

The chief executive of a supplement company under investigation by FDA could go to prison for allegedly violating the terms of his supervised release following a criminal conviction in 2014.

Research Promoting Women’s Health to Receive $20,000 Prize

Guest Blogger: Greg Weilersbacher
Founder & President, Eastlake Quality Consulting

All companies outsource. It’s a humbling fact that you simply can’t do it all yourself. This often has to do with resource allocation; your company may allocate dollars to build and sustain some activities in-house while choosing to contract higher-cost operations to qualified suppliers who already have the expertise and equipment. 

You may outsource the manufacturing of tablets, sterile injectable, or topical dosage form, or the GMP release and stability testing of your product. Once the production and testing is complete, the product may need to be stored under controlled temperature and humidity conditions and then distributed to locations around the globe. The Contract Development and Management Organizations (CDMOs) who execute these critical operations are of paramount importance to your company’s success. Choosing the right suppliers will also help to minimize stress-induced headaches throughout your organization. Here are the top five ways to get the most out of a supplier audit.



1.  Come to the Audit Prepared
This seems obvious. However, more often than not, quality auditors step into the supplier’s lobby without doing their homework. Ask yourself the following questions: Why am I auditing this supplier? Is this supplier new to my company or one that we have used before? If used previously, have I read over the audit observations as well as the supplier’s responses and do I understand them? Which audit observations do I suspect would be the most challenging for the supplier to address and which are most important to my company’s requirements for this product? Have I reviewed previously executed production batch records and testing data and are there issues that need to be resolved? Are their deviations and CAPAs to follow up on?

Your understanding the supplier’s work proposal is of great value in refining the scope of the audit. Ask yourself:  Which of our products may be manufactured and tested here and which strengths (e.g., potency) will be produced? Which equipment is likely to be used? For a tablet production, the equipment train could include balances, blenders, roller compactor, spray dryer, solvent-rated oven, comils, tablet press and tooling, gravity feeder, coating systems, de-duster, weight sorter, metal detector, tablet counter, etc. This list of equipment will assist you in requesting equipment records during the audit. 

2.  Stay On Point
Proper audit planning will help to keep the audit organized and adhere to the audit timeline. In advance of the audit, provide the audit host with a list of the technical, lab, and manufacturing staff you wish to speak with and the records you need to review. A well-organized host will have this available for your review. Stick to your audit agenda. This is critical. The best way to derail your progress is to spend precious time chasing down minor issues while glaring problems get little to no attention. Continually refer back to the audit agenda and remember to keep the content of your audit report in mind while executing the audit.


3.  Know Your Technical Expertise and Limitations
Many auditors have led previous lives in the laboratory or in manufacturing while others started their careers in quality assurance and may have little technical background with regard to equipment, manufacturing processes, GMP utilities and laboratory testing. Know your limitations and if necessary strengthen them by hiring an expert consultant to assist you during the audit.

A common problem area that is at best glossed over and at worst completely ignored during an audit is the CDMO’s compliance with GMP utilities requirements. All too often, this is due to the auditor’s lack of understanding of the operation, inputs and outputs, validation parameters, and periodic testing and maintenance requirements for utilities such as HVAC, clean or pure steam, purified water and WFI systems, autoclaves, clean compressed air, nitrogen and other gases used for operating equipment or used during processing activities in manufacturing. Typically, these areas are also less well understood by the CDMO’s employees and as a result noncompliance abound. 

Some GMP utilities may be connected to the facility’s building management system, while others may be stand-alone equipment. In either case, the CDMO should have records of alarms (e.g., out of specification or out of range conditions), an acknowledgement of each alarm by designated staff members, and documentation of corrective actions. The last item is key. This is where the execution of quality systems tends to fail. Make a point to request documentation of corrective actions for each utility alarm. 

Additionally, purified and WFI water systems along with gases, such as clean compressed air and nitrogen, require periodical sampling/testing at each point-of-use. Verify that the timelines (monthly, quarterly, or annual) for sampling and testing were performed as directed by the CDMO’s procedures. These timelines are typically not well adhered to. A clear understanding of all the operations of the supplier’s GMP utility management process will keep your thoughts clear during the audit and help identify areas that are in need of improvement. 

4.  The Auditor’s Job is to Identify the Good and the Bad (Not to Win the Debate)
An important goal of a supplier audit is to identify the supplier’s strengths and weaknesses and come away from the audit with a compliance assessment that your company can use to make important decisions. It is of no value to your company if the goal of the auditor is to show the supplier how much he or she knows by debating the fine points of compliance. GMP auditors with decades of experience generally avoid this competitive exchange as it is unproductive. Rather, it is more important to the spend the necessary time identifying compliance issues, making them known to the audit host in a professional manner, and taking detailed notes that assist in writing the audit report. Your company’s senior managers need to know the supplier’s good and not-so-good points; detailing all of these provides the greatest value. 

5.  Interview the CDMO's Lab Staff, Manufacturing Operators, and Shipping/Receiving Personnel
CDMO’s quality systems are generally written by managers and directors who have many years of industry experience. It is of utmost importance that staff members who execute these systems understand them if your company’s product is to be manufactured, tested, stored, and distributed in a compliant manner. Request to speak with manufacturing staff members who work on the production floor and are likely to work on your product. Ask them about the process they would follow to conduct lines clearance, charge powders to a blender, operate a spray dryer, use a comil, set-up of a tablet press, inspect tablets, use metal detectors, etc. Compare the information they provide to the CDMO’s SOPs to determine if the staff understands their jobs. Listen for phrases such as “I usually do it this way…” or “it’s a different every time but I typically set up the equipment like this…” These phrases reveal a lack of control and adherence to procedures. 

The Take Away
The audit itself lays the foundation for a relationship with the supplier and the take-away message should address the following questions: Will the supplier work to resolve the issues I’ve identified? Am I confident that the supplier will immediately notify and involve my company’s representatives when deviations occur during production or testing? Do the supplier’s quality systems and records meet my company’s requirements and those of regulatory agencies? How confident am I that the supplier will produce and/or test a quality product that my company can stand behind? Is the supplier simply a pair of hands or are they committed to be my partner in this product’s success? The answers will provide you with a comfort level in making the decision to move forward with the CDMO or to look to the their competition.  

*********************************************************************************

A version of this article was first published in Outsourced Pharma.

 About the Author
Greg Weilersbacher is the Founder and President of Eastlake Quality Consulting, a GMP consulting firm based in the Southern California area. Over the last 25 years, he has held director and vice president positions leading Quality Assurance, Quality Control, Analytical Chemistry, Materials Management, GMP Facilities, and Product Manufacturing in biotech and pharmaceutical companies. His unique experiences and technical background have led to the manufacture and release of hundreds of solid oral, sterile, and biologic investigational products to clinics in the U.S. and abroad. Email Greg at weilersbacher.greg@gmail.com.

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