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Forest Pharmaceuticals Agrees to Criminal Plea, Pays $313 Million for Illegal Marketing

September 20, 2010

Forest Pharmaceuticals, Inc., a subsidiary of Forest Laboratories, Inc., has agreed to a guilty plea, a criminal fine and forfeiture, and a civil settlement all arising out of allegations of illicit marketing of its drugs Celexa, Levathroid, and Lexapro.  The DOJ and several qui tam whistleblowers maintain that Forest illegally promoted Celexa for the treatment of depression in children – a use unapproved by the Food and Drug Administration – and distributed and marketed the unapproved drug Levathroid.

Under federal law, pharmaceutical manufacturers are required to submit all new drugs for approval by the FDA and may promote drugs only for the uses authorized.  Claims to Medicare and Medicaid for drugs marketed “off-label” and prescribed for unapproved uses constitute false claims to the United States and state healthcare programs.

The United States contends that Forest illegally promoted its drugs for off-label uses.  At the time in question, the antidepressants Celexa and Lexparo were approved only for treatment of adults.  Yet, Forest allegedly marketed the drugs for pediatric use, directing its sales force to push the drugs to pediatric specialists and publicising positive test results while concealing negative information pertaining to the drugs’ safety and efficacy for children.  Forest is also charged with distributing Levathroid without FDA approval and with obstructing the federal investigation into these allegations.

As part of the settlement, Forest will plead guilty to one criminal felony count of obstructing justice, one criminal misdemeanor count of distributing an unapproved drug in interstate commerce, and one criminal misdemeanor count of distributing a misbranded drug in interstate commerce.  Forest will pay a criminal fine of $150 million and forfeit $14 million in assets.  Finally, the company will pay a civil settlement of $149 million.  The whistleblowers will receive approximately $14 million from the federal portion of the settlement.

To report Medicare fraud contact Frohsin & Barger.

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