Forest Pharmaceuticals Agrees to Pay $300M in Criminal Penalties

Washington, DCThe U.S. Food and Drug Administration (FDA), working in close coordination with the U.S. Department of Justice (USDOJ), has announced that Forest Pharmaceuticals Inc, has entered into a plea agreement in which the company accepted responsibility for criminal actions including distribution of an unapproved new drug, distribution of a misbranded drug, and obstruction of an FDA inspection.

To resolve these charges and a related civil suit, Forest Pharmaceuticals has agreed to pay more than $300 million, including $164 million in criminal penalties. This plea agreement is the culmination of a multiyear investigation conducted by FDA's Office of Criminal Investigations in cooperation with its law enforcement partners and the U.S. Attorney's Office for the District of Massachusetts.

Charges against Forest Pharmaceuticals are primarily for its marketing of Levothroid (levothyroxine sodium tablets, USP), an unapproved drug used for the treatment of hypothyroidism. A 1997 Federal Register notice announced that these products are considered "new drugs" within the meaning of the Federal Food Drug and Cosmetic Act (FDCA) and that manufacturers who wished to continue marketing these products must obtain approved applications from the FDA by August 2000. Because levothyroxine was considered a medically necessary product, the FDA permitted a gradual phase-out with all distribution of unapproved levothyroxine sodium drug products to cease no later than August 2003.

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.

"These charges should serve as a warning to industry that the FDA takes seriously its role to protect the public from unapproved drugs," said Deborah M. Autor, director of the Office of Compliance in FDA's Center for Drug Evaluation and Research. "Any company that operates in violation of the FDCA and ignores FDA's warnings should be aware that a criminal action could follow."

Forest Pharmaceuticals also is charged with distribution of a misbranded drug for its off-label promotion of Celexa for pediatric use when it was approved only for use in adults. Celexa is the brand name for the prescription drug citalopram, a selective serotonin reuptake inhibitor (SSRI) drug for the treatment of adult depression. In addition, the company also is charged with obstructing an agency proceeding because of false statements made by its employees during a 2003 FDA inspection.

Under the terms of the plea agreement, Forest Pharmaceuticals will plead guilty to all three counts brought against the company and will pay criminal penalties totaling $164 million. The Department of Justice also announced that Forest Pharmaceuticals, Inc. and its parent company, Forest Laboratories have agreed to pay $149 million and to enter into a Corporate Integrity Agreement with the Office of Inspector General of the U.S. Department of Health and Human Services in order to resolve a related civil complaint against the companies.