Feds, states reach settlement with drug maker

By Keith Loria | Oct 1, 2010


OLYMPIA, Wash. (Legal Newsline) - Washington Attorney General Rob McKenna announced on Wednesday that several states and the federal government have reached a $3.2 million settlement with a drug manufacturer that allegedly illegally marketed three drugs.

Forest Pharmaceuticals, Inc., was named in a lawsuit by the federal government and several states for allegedly engaging in criminal sales tactics, including directing salespeople to promote the pediatric use of Celexa in calls to physicians who treat minors and hiring speakers to talk to pediatric specialists about the benefits of prescribing the drug to young children and teens.

"Rules for doing business with Medicaid protect public health and taxpayer dollars," McKenna said. "These settlement funds, along with the millions netted by our Medicaid fraud team every year, help fill a financial hole created by companies that skirt the rules."

The federal government also alleged that Forest Pharmaceuticals publicized a study showing positive results that Celexa worked for adults, but downplayed less favorable results concerning the drug's effectiveness for treating teen depression.

Additionally, the suit alleged that the company engaged in similar marketing for the drug Lexapro, even though that drug was not approved for pediatric use at the time.

Illegal sales tactics for both drugs, the government alleged, also included cash payments disguised as grants or consulting fees to physicians as well as expensive meals and lavish entertainment provided to entice physicians to promote their drugs.

Under terms of the agreement, the subsidiary of Forest Laboratories, of New York City, will pay $770,628 in restitution to the state Medicaid program and $847,957 in penalties, which will be deposited into the state"s general fund. An additional $1.6 million will be returned to the federal government for Medicaid contributions.

Forest Pharmaceuticals entered a plea agreement on Sept. 15, in which the company accepted responsibility for criminal actions relating to the distribution of Levothroid, used to treat hypothyroidism, between 2001-2003. They also admitted to illegally promoting anti-depression drugs Celexa and Lexapro for pediatric use.

The drug company will also settle all pending allegations that it caused false claims to be submitted to federal health care programs for the drugs Levothroid, Celexa and Lexapro.

As part of the civil settlement, more than $88 million will be distributed to the federal government and more than $60 million will be shared by other states.

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