The U.S. government's move against Forest Laboratories CEO Howard Solomon has set the pharma industry abuzz. After all, barring Solomon from the drug business is a step outside the enforcement box. And if HHS succeeds in forcing him out, then other pharma executives could find themselves in the crosshairs.
Forest inked an off-label marketing settlement with the Justice Department last year, agreeing to pay $313 million in civil and criminal penalties to resolve a probe into its promotions of the antidepressants Celexa and Lexapro. The settlement was one in a long series of plea agreements between drugmakers and Justice. Forest is defending Solomon, saying he wasn't accused of wrongdoing.
HHS officials were already warning that they would target individual executives connected with regulatory violations, because the government settlements didn't seem to be working to deter misconduct. Indeed, Pfizer's record-setting, $2.3 billion settlement was at least the company's second marketing-related penalty.
Excluding individual corporate leaders is designed to "alter the cost-benefit calculus of the corporate executives," Lew Morris, chief counsel for the HHS inspector general, told Congress last month (as quoted by the Wall Street Journal). To make that happen, regulators have said they'll rely on an old legal provision that allows executives to be held accountable for their companies' actions, even if they weren't directly involved in the misconduct--in fact, even if they didn't know it was happening at the time.
And drugmakers aren't the only ones who should be worried, experts are saying. Other U.S. agencies--such as the Defense Department and the EPA--have similar exclusion powers, said corporate defense lawyer Richard Westling. "The use of sanctions such as exclusion and debarment to punish individuals where the government is unable to prove a direct legal or regulatory violation could have wide-ranging impact," Westling told the WSJ.
- see the WSJ piece
Special Report: Big Pharma behaving badly: A timeline of settlements.