VIA Bloomberg Business Week
Howard Solomon’s Career May Meet a Sad End
The Forest Laboratories CEO, who built his company’s fortune on the antidepressants Celexa and Lexapro, faces exile from the health-care industry
By Dune Lawrence
In part
..."Forest’s aggressive marketing of Celexa and flouting of regulations has put Solomon on a far less comfortable kind of stage, one at the center of a debate over the accountability of the pharmaceutical industry and its leadership, and the limits of government power. On Apr. 12, Solomon learned that the Office of Inspector General, or OIG, which handles the U.S. Health and Human Services Dept.’s efforts to fight waste and fraud in government health programs, is considering “excluding” him. Technically, this means exclusion from doing business with federal health programs such as Medicare, Medicaid, and the Veterans Affairs Dept. Functionally, it means a ban from the entire health-care industry. Personally, it is a censure, the equivalent of an official shaming. And for American business it seems to presage an increased government effort to hold executives accountable, making corporate misbehavior personal for leaders who may have seen monetary punishment as a mere line item for shareholders to bear.
The OIG has not announced a decision, at least publicly, but the potential move is already disrupting the company. Forest is facing a proxy battle and lawsuit from Carl Icahn, the corporate raider and activist shareholder. Companies he controls have built a stake of about 7 percent in Forest, nominated four new members for its nine-member board, and are suing the drugmaker in the Delaware Court of Chancery for details on why the government is seeking to bar Solomon."
Read the entire article here at Bloomberg.
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Background
Health Care Fraud :OIG and Dept of Health and Human Services report for 2010: Big Pharma & Device makers Behaving Badly
From the U.S.Dept of HHS and the OIG the pdf report"The HCFAC program is designed to coordinate Federal, State and local law enforcement activities with respect to health care fraud and abuse. The Act requires HHS and Department of Justice (DOJ) detail in an Annual Report the amounts deposited and appropriated to the Medicare Trust Fund, and the source of such deposits."
Fraud by Pharmaceutical and Device Manufacturers and Related Individuals
In September 2010, Forest Laboratories, Inc. and Forest Pharmaceuticals, Inc. agreed to pay more than $313 million to resolve allegations of civil and criminal liability relating to obstruction of justice, the distribution of an unapproved new drug, Levothroid, and the illegal promotion of Celexa for use in treating children and adolescents. With respect to its civil liability, Forest paid $89 million to federal programs and $60 million to state Medicaid programs to resolve allegations that it caused the submission of false claims to federal health insurance programs by (1) illegally promoting the drugs Celexa and Lexapro for unapproved pediatric uses in treating depression, (2) paying kickbacks to physicians through a variety of programs designed to induce providers to prescribe Celexa and Lexapro in violation of the Anti-Kickback Statute, and (3) distributing Levothroid in violation of the Food, Drug, and Cosmetic Act (FDCA). To resolve its criminal liability, Forest agreed to plead guilty to felony and misdemeanor counts and pay a $164 million combined criminal fine and forfeiture.
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It's hard to see the human side of the Solomon situation when focused on the criminal side and the illegal marketing of pharmaceuticals, I find it hard to believe people in charge of these companies don't see the people in the marketing target audience that may have been victims (kids for example) of the drugs rx'd to them because doctors were sold on the idea--from Forest Labs direct to physician influence.
Some have a soft spot for the people who work for Solomon (PharmaGiles) and wrote a post asking readers to consider the employees that have been with Forest a long time and PharmaGiles says in that post, "So I really hope Mr. Solomon and his board succeed in fighting off the predators. Forest employees (along with everyone else) know that the old boy is a huckster, but at least he's THEIR huckster."
What are your thoughts on Solomon, CEO of Forest Labs resigning, or being forced to resign at age 80 something? does the age matter? what about business integrity? do you think the fine will help curb these illegal marketing practices? should the CEO's do jail time?
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