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    September 15, 2010

    Forest, Maker of Celexa, to Pay More Than $313 Million to Settle Marketing Case


    A unit of Forest Laboratories, the maker of the antidepressant Celexa, agreed on Wednesday to pay more than $313 million to settle criminal and civil complaints, including a claim that it had illegally promoted the drug for use in children.

    The settlement is the latest in a crackdown by the Justice Department on pharmaceutical companies that have promoted drugs for uses that have not been approved by the Food and Drug Administration, a practice called off-label marketing.

    The Forest settlement comes two weeks after Allergan, the maker of Botox, agreed to pay $600 million to settle claims that it had illegally marketed the drug from 2000 to 2005 for off-label uses including headaches and cerebral palsy in children. The settlements this month, however, pale compared with two last year when Pfizer agreed to pay $2.3 billion and Lilly agreed to pay $1.4 billion to settle illegal marketing claims.

    The office of the United States attorney in Massachusetts led the Forest investigation, which began in 2003 after a whistle-blower sued the company.

    Among the criminal charges was one that the subsidiary, Forest Pharmaceuticals, marketed Celexa, which was approved only for adult depression, to treat children and adolescents. The government also claimed that, in conjunction with the company’s off-label promotion, Forest publicized the positive results of a study on Celexa in adolescents while failing to tell doctors about a similar study that had negative results.

    “Forest Pharmaceuticals deliberately chose to pursue corporate profits over its obligations to the F.D.A. and the American public,” Carmen Ortiz, the United States attorney for the District of Massachusetts, said in a statement Wednesday.

    In addition, federal prosecutors accused Forest of paying doctors to induce them to prescribe Celexa and another antidepressant, Lexapro. The remuneration included “cash payments disguised as grants or consulting fees, expensive meals and lavish entertainment, and other valuable goods and services,” the government said in its civil complaint.

    Among the items that Forest sales representatives gave to doctors from 1998 to 2005, the complaint said, were tickets to St. Louis Cardinal games, which were to be “leveraged and sold as a reward for prescriptions”; a $1,000 gift certificate to Alain Ducasse, a gourmet French restaurant, for a high-prescribing child psychiatrist; a deep-sea fishing trip off Cape Cod for a doctor and his three sons; $400 in Broadway theater tickets for a doctor and his wife; and Red Sox tickets worth $2,276 to be used for doctors in the Boston area.

    Forest, with corporate headquarters in Manhattan, “expressly denies the allegations made in connection with the civil claims being settled,” the company said in a statement on Wednesday. The company previously said it had put aside $313 million plus interest in connection with the investigation and will not record additional charges to its earnings, the statement said.

    “We are pleased to bring closure to this long-running investigation,” Howard Solomon, the chief executive of Forest, said in the statement. “We remain dedicated to ensuring that we operate in full compliance with all laws and regulations.”

    A phone call and an e-mail to the company seeking additional comment were not answered.

    As part of the criminal settlement, Forest Pharmaceuticals, which is based in St. Louis, agreed to plead guilty to one felony count of obstructing justice, acknowledging that employees had lied to F.D.A. officials during a plant inspection in 2003.

    The company also agreed to plead guilty to two misdemeanors, one of which covers the company’s misbranding of Celexa by marketing the antidepressant for use in children from 1998 to 2002.

    The other misdemeanor covers the illegal distribution from 2001 to 2003 of an unapproved drug, Levothroid, to treat a thyroid hormone deficiency. Such thyroid pills, made by various drug makers, had been sold in the United States since the 1950s without F.D.A. approval. But in 2001, the agency told drug makers that they needed to reduce their distribution of such medications until the companies obtained agency approval to market the pills.

    The criminal charges accused Forest of making a deliberate decision to continue distributing the drug in quantities exceeding the F.D.A.’s directive. After the agency sent a warning letter to Forest, the company directed employees to work until 1 a.m. to continue shipping as much Levothroid as possible, according to the criminal complaint.

    Forest stopped distributing that thyroid drug in 2003.

    The criminal settlement calls for the company to pay a $150 million fine and to forfeit an additional $14 million in assets. Forest will also pay more than $88 million to the federal government and more than $60 million to the states to resolve a civil complaint that its actions caused false claims to be submitted to federal health care programs. In addition, two whistle-blowers will split $14 million from the federal share of the settlement.

    Forest has also entered into a five-year corporate integrity agreement, requiring an independent expert to review the company’s compliance with drug marketing regulations.

    The criminal resolution is subject to approval by the federal court for the District of Massachusetts.

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