You're Fired: Forest Labs' CEO May Be Banned From Federal Health Care

By Paul Thacker

As reported at Pharmalot, the CEO of Forest Laboratories received an unfortunate letter last week, demanding that he explain within 30 days why he should not be excluded from participation in federal healthcare programs. Banning Mr. Howard Solomon would prevent Forest from billing the government -- every pharma company's largest customer -- and effectively end his over 30-year tenure as CEO.

The company's board expressed shock.

"It would be completely unwarranted to exclude a senior executive against whom there has never been any allegation of wrongdoing whatsoever," said board member William J. Candee III, in a Forest statement. "Mr. Solomon has always set a tone of the highest integrity from the top."

Oh, really?

The move to exclude Mr. Solomon apparently stems from Department of Justice accusations of fraud in 2009 related to Lexapro, an antidepressant. In a civil complaint, federal prosecutors alleged that Forest hid from parents and doctors the results of a study indicating that Lexapro might increase the risk of suicide in kids. Meanwhile, the complaint alleges, the company was promoting another clinical trial -- financed by Forest, naturally -- showing Lexapro's effectiveness.

Prosecutors also charged the company with providing kickbacks to doctors in the form of sports tickets, expensive meals, and paid vacations.

For this last allegation, we really don't need to rely on the good word of attorneys at DOJ. Take a gander yourself at Forest Lab's "Fiscal Year 2004 Marketing Plan" for Lexapro. As reported by The New York Times, 80 pages of this confidential document were made public by investigators working for Senator Charles Grassley (R-IA). (Full Disclosure: The Forest Laboratories marketing document was released as part of my duties as an investigator for Senator Grassley)


"Fiscal Year 2004 Marketing Plan"

Under "Marketing Tactics," the document said the company planned to create bylined "or ghostwritten" articles. "We will identify a Lexapro thoughtleader to place 2-3 bylined articles in trade journals, consumer publications and on the Internet."

The estimated cost for the ghostwriting program was $100,000.

Another sales tactic was funding continuing medical education (CME) courses, the classes doctors take to remain current about patient treatment. Believe it or not, doctors actually allow companies to pay for their education. And get this: some doctors believe that companies won't use this opportunity to influence prescribing. Makes you want to question your doctor's intellect, no?

Forest's estimated CME budget to push Lexapro in 2004? $11.9 million.

Maybe we should change the acronym's meaning to Corporate Marketing Education (CME)?

Other marketing schemes included "lunch and learns" for $36 million. "Providing lunch for a physician creates an extended amount of selling time for representatives," the document said.

I suspect Forest was not serving PB&J.

And of course, Forest's marketing plan taps Zelig himself, Dr. Charles Nemeroff. Can we ever escape him? In this case, Dr. Nemeroff's bounty was a mere $100,000 in the form of an "unrestricted educational grant" to Emory University.

"Public relations activities surrounding this initiative to raise the awareness of Forest's support in the field of psychiatry will be explored," the document said.

At POGO, we're more than happy to help Forest in this public relations endeavor.

So here's where things get a little tricky and a tad bit confusing. Despite the damaging evidence staring them in the face, Forest seems nonplussed by DOJ's action against their CEO.

"Numerous other major pharmaceutical companies have plead guilty to much more egregious offenses, and none of them has faced the exclusion of a senior executive who has not himself been convicted of a crime or pleaded guilty to a crime," stated Herschel S. Weinstein, Vice President and General Counsel.

True. But we thought the "everybody else was doing it too, Mom," defense went out in middle school. Guess we were wrong.

The government has been signaling for the last couple years that pharmaceutical executives should expect to become targeted for prosecution or debarment. Mr. Solomon is just the latest turn of the screw.

Expect more activity in the future.

Paul Thacker is a POGO Investigator