Forest Laboratories is stepping up its fight on behalf of CEO Howard Solomon. In the face of threats that Solomon would be barred from doing business with the federal government, the company has tapped former Sen. John Breaux for help. A Democrat from Louisiana, Breaux co-headlines a lobbying firm with former Senate Majority Leader Trent Lott, and one of his specialties is healthcare issues.
Several months ago, the Department of Health and Human Services notified Solomon that he might be excluded from government business, a move that would prevent Forest from capturing Medicare and Veterans Administration sales so long as Solomon is associated with the company. Forest immediately pledged its support in Solomon's fight against exclusion, noting that, while the company had pleaded guilty to marketing an unapproved drug and settled an off-label marketing investigation with the U.S. Justice Department, Solomon himself had never been accused of wrongdoing.
In going after Solomon personally, HHS is making good on threats to hold pharma executives accountable for their companies' misdeeds, perhaps even if those executives weren't directly involved in wrongdoing. In spite of several Justice Department settlements in the hundreds of millions of dollars--as well as a couple in the billions--federal officials have worried that such deals aren't enough to deter bad corporate behavior.
Solomon's problems with HHS have spawned problems for Forest, most notably a proxy fight with Carl Icahn and his investment funds. Icahn's group has nominated new members for the company's board, and it has sued the company for more information about Solomon's status. Clearly, Forest thinks it needs help fighting off the dragons, or it wouldn't have hired Breaux.
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