March 2, 11

NEWS / Forest Pharmaceuticals Sentenced to Pay $164 Million for Criminal Violations

WASHINGTON -- Drug manufacturer Forest Pharmaceuticals Inc. was sentenced today by U.S. District Judge Nancy Gertner to pay a criminal fine of $150 million and forfeit assets of $14 million following the company’s guilty plea in November 2010 to one felony count of obstructing justice, one misdemeanor count of distributing an unapproved new drug in interstate commerce and one misdemeanor count of distributing a misbranded drug in interstate commerce, the Justice Department announced. The company, a subsidiary of New York City-based Forest Laboratories Inc., pleaded guilty to charges related to obstruction of an FDA regulatory inspection, to the distribution of Levothroid, which at the time was an unapproved new drug, and to the illegal promotion of the anti-depressant drug Celexa for use in treating children and adolescents.

Today’s sentencing of Forest was the final component of a global resolution totaling more than $313 million to resolve criminal and civil allegations against Forest and its parent company in connection with the distribution and marketing of certain drugs. In September 2010, Forest Laboratories and Forest Pharmaceuticals entered a civil settlement to resolve False Claims Act charges involving three of its drugs: Levothroid, Celexa and Lexapro. As part of the civil settlement, Forest agreed to pay more $149 million, including more than $88 million to the federal government and more than $60 million to the states.

According to court documents, Forest Pharmaceuticals began distributing Levothroid for treatment of hypothyroidism in the early 1990s without first obtaining Food and Drug Administration (FDA) approval. In 1997, the FDA, after determining that the drugs were medically necessary, gave manufacturers a certain amount of time to conduct the necessary studies and obtain FDA approval. In 2001, the FDA stated that it would continue to permit manufacturers of unapproved levothyroxine sodium drugs to distribute their unapproved drugs after Aug. 14, 2001, on certain conditions. One of those conditions was that any manufacturer which had not obtained approval needed to comply with a gradual distribution phase-down of its unapproved drug until it obtained FDA approval. According to court documents, Forest made a deliberate decision to continue distributing its unapproved Levothroid product in quantities far exceeding the amounts permitted by the FDA’s distribution phase-down plan.

The FDA sent a warning letter to Forest Pharmaceuticals on Aug. 7, 2003, informing the company that it was no longer entitled to distribute its unapproved Levothroid product.

According to prosecutors, after Forest received the letter, the company directed its employees at its St. Louis distribution center to work overtime until approximately 1:00 a.m. the following morning and, during that time, to continue shipping as much of its unapproved Levothroid as possible.

Court documents also indicate that Forest obstructed an FDA regulatory inspection relating to Levothroid at Forest’s Cincinnati plant in November 2003. According to prosecutors, management personnel at the Cincinnati plant were aware that serious equipment malfunctions had resulted in testing conditions that, for hundreds of days and thousands of hours, did not comply with the FDA’s requirements for Levothroid that had been manufactured for research purposes. Prosecutors stated that in an attempt to remedy this problem, certain Forest management personnel at the Cincinnati plant decided to use a portable home humidifier in the testing room as a temporary fix. Later, when FDA inspectors saw this humidifier in the testing room during a regulatory inspection of the plant, certain management personnel falsely told the investigators that the portable humidifier was merely being stored in the room and had not been used for humidity control. This conduct was the basis for the felony obstruction charge to which Forest pleaded guilty.

Forest halted its commercial distribution of its unapproved version of Levothroid as of August 9, 2003. Since the fall of 2003, Forest has been commercially distributing a different orally administered levothyroxine sodium drug, also called Levothroid. This resolution does not involve that product.

Regarding Celexa, court documents state that Forest promoted the drug for use in treating children and adolescents suffering from depression despite the fact that the FDA had only approved the drug to treat adult depression. Prosecutors stated that Forest’s off-label promotion consisted of various sales techniques, including directing its representatives to promote pediatric use of Celexa in sales calls to doctors who treated children and adolescents, and hiring outside speakers to talk to pediatric specialists about the benefits of prescribing Celexa to children and teens. Prosecutors stated that in conjunction with this off-label promotion, Forest aggressively publicized the positive results of a double-blind, placebo-controlled Forest study on the use of Celexa in adolescents while, at the same time, Forest Pharmaceuticals suppressed the negative results of a contemporaneous double-blind, placebo-controlled European study on the use of Celexa in adolescents.

" Forest Pharmaceuticals pleaded guilty to obstructing justice and marketing drugs for unapproved uses, including improperly promoting an anti-depressant to children and adolescents," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "As the court’s stiff sentence demonstrates, not only is such conduct unacceptable, taxpayers should not foot the bill for practices that violate the law."

“Both the criminal and civil cases were predicated upon the fact that Forest Pharmaceuticals made a calculated decision to place a higher priority on increasing corporate sales than on complying with the basic, legal requirements that Congress and the FDA created to protect the American public,” said Carmen Ortiz, U.S. Attorney for the District of Massachusetts.

In addition to its sentence today, and previously agreeing to a civil settlement, Forest also previously signed a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General (HHS-OIG).

"Today’s sentencing of Forest Pharmaceuticals is a victory for the system designed to protect patients from potentially harmful prescription drugs," said Daniel R. Levinson, Inspector General of the Department of Health & Human Services. "Attempts to circumvent that system by selling misbranded and unapproved drugs simply will not be tolerated."

The criminal case was investigated and prosecuted by Assistant U.S. Attorney James E. Arnold of the U.S. Attorney’s Office for the District of Massachusetts and Trial Attorney Jeffrey I. Steger of the Justice Department’s Office of Consumer Litigation. The case was investigated by agents from the FBI, the HHS-OIG, the FDA’s Office of Criminal Investigations and the Department of Veterans Affairs’ Office of Inspector General. Assistance was also provided by the FDA’s Office of General Counsel and the Office of Personnel Management.

http://www.justice.gov/opa/pr/2011/March/11-civ-270.html

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