Forest Labs CEO Retires, But Feds Issue Subpoena
May 28th, 2013 // 6:22 pm @ jmpickett
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Last year, Howard Solomon decided to step aside as the CEO of Forest Laboratories, but that’s when DOJ sent the firm a subpoena regarding its treatment for chronic obstructive pulmonary disease, known as Turdorza Pressair.
The subpoena got the the company HQ on May 6, and Solomon announced he would depart on May 23.
It could be that this timing was a coincidence, and we have seen very little information about the subpoena, other than that Forest says it is cooperating with the federal authorities. However, this disclosure is quite embarrassing for Forest Labs, due to its history with questionable marketing tactics and the difficulties that this caused Solomon in 2011.
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Back in 2010, Forest pleaded guilty to obstructing justice, illegally promoting two medications and also distributing a drug that was not approved by FDA. The firm settled the charges by paying $313 million. This included $163 million in criminal sanctions. Also, a Corporate Integrity Agreement of five years was signed. Forest agreed to show it had clearly established procedures to prevent such an event again.
Still, the feds tried to exclude the CEO from participating in Medicare and Medicaid. This would have prevented Forest Labs from securing essential contracts. However, the feds decided to back off due to lobbying from US Senator Chuck Schumer, according to sources on Capitol Hill.
As Soloman announced his retirement at age 85, he said it was time for a younger CEO to take over. Of course, Forest also probably wants to avoid having problems getting contracts with Medicare and Medicaid. Solomon’s retirement could assure that from happening again in the near future.
