Bitter pill for chief of Forest Labs
The government, fed up with Forest’s encouraging doctors to prescribe for children antidepressants approved only for adults, has demanded that Mr. Solomon be sent packing. If the company fails to comply, Washington will effectively bar Medicare and Medicaid from buying its drugs. Such a move “could amount to a corporate death sentence,” according to a memo co-authored by Kenneth Breen, a partner at Paul Hastings, a law firm that has represented Forest in the past.
The company also got in trouble with the Food and Drug Administration, which in a 2003 letter warned Forest to stop marketing an unapproved new drug. Rather than comply immediately, prosecutors said, Forest tried to move as much of the item as possible, going so far as to override computer systems, hire extra trucks and pay staffers overtime at a St. Louis distribution facility before halting shipments a day after receiving the FDA missive.
Forest pleaded guilty last November to obstructing justice, distributing an unapproved drug and distributing a misbranded drug. In addition to agreeing to $313 million in penalties—equal to about a third of earnings in the last fiscal year—Forest signed a Corporate Integrity Agreement with the Department of Health and Human Services’ inspector general.
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