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Forest pleads guilty in FDA probe

Forest Pharmaceuticals will pay over $300m after pleading guilty to distributing an unapproved new drug and obstructing an FDA investigation

Forest Pharmaceuticals has pleaded guilty to distributing an unapproved new drug and obstructing an investigation conducted by the US Food and Drug Administration (FDA). The company will pay more than $300m in civil and criminal penalties to resolve the charges, which result from a multiyear investigation conducted by the FDA's Office of Criminal Investigations and the US Attorney's Office for the District of Massachusetts.

The company will pay $164m in civil penalties, with the rest of the charges going to resolve a related civil suit. Forest Pharmaceuticals and its parent firm, Forest Laboratories, will also enter into a Corporate Integrity Agreement with the Office of the Inspector General of the US Department of Health and Human Services in order to resolve the civil complaint. The agreement requires Forest to maintain its current compliance programme and to institute new corporate integrity measures for five years.

The charges revolve around Forest's marketing of its hypothyroidism drug Levothroid (levothyroxine sodium). Levothroid and similar drugs were legally marketed for years without FDA approval, but in 1997, the FDA determined that the drugs did require regulatory clearance and that manufacturers who wished to continue selling them would need to obtain approved New Drug Applications (NDAs) by August 2000.

"Forest Pharmaceuticals did not obtain drug approval, increased its distribution of Levothroid rather than scaling down, and ignored a subsequent Warning Letter to stop the manufacture and distribution of Levothroid," according to the FDA.

The currently marketed formulation of Levothroid has since received an approved NDA and is compliant with regulations, the FDA noted.

Forest has also pleaded guilty to distribution of a misbranded drug for off-label promotion of its antidepressant Celexa (citalopram), which the company marketed for pediatric use although its FDA approval covered only adult depression. The charge of obstructing an investigation, to which Forest has also pleased guilty, is related to false statements made by Forest employees during a 2003 FDA inspection.

Forest said it will pay the financial penalties using previously disclosed reserves and will not record any additional charges to its earnings in conjunction with the settlement.

16th September 2010

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