Forest Pharmaceuticals, Inc. Agrees To Pay More Than $313 Million To Settle Civil And Criminal Allegations That It Unlawfully Marketed And Sold Certain Drugs

On September 15, 2010, the U.S. Department of Justice announced that it has entered into a settlement agreement with Forest Pharmaceuticals, Inc. in which Forest will pay more than $313 million to resolve civil and criminal allegations that it engaged in unlawful practices in connection with the sale and marketing of its drugs Levothroid, Celexa, and Lexapro.  Approximately $164 million of the settlement constitutes a criminal fine and forfeiture to resolve allegations that Forest intentionally distributed a drug, Levothroid, that was not approved by the Food and Drug Administration (FDA) and that the company obstructed an FDA regulatory inspection concerning data submitted in connection with Forest’s application for approval of Levothroid.

Forest will pay approximately $149 million to resolve three qui tam lawsuits brought by whistleblowers under the False Claims Act.  Those lawsuits alleged that Forest improperly submitted claims for payment to the Government for the drug Levothroid, even though the drug no longer qualified for coverage by government health care programs and that the company unlawfully promoted Celexa and Lexapro for off-label uses.  The lawsuits further asserted that Forest used illegal kickbacks—such as expensive meals, lavish entertainment, and cash payments described as consulting fees—to induce physicians to prescribe Celexa and Lexapro.  As a reward for disclosing Forest’s unlawful activity, the whistleblowers will receive a $14 million share of the settlement.

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