Federal Blacklist of Drug Firm's CEO Worries Businesses

Wednesday, 27 Apr 2011 03:18 PM

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A federal campaign against a single CEO has business leaders worried that the Obama administration is using strong-arm tactics to influence corporate decision-making, the Wall Street Journal reports.

The chief executive, Howard Solomon of the pharmaceuticals company Forest Laboratories Inc., faces banishment from doing any business with the U.S. government. Solomon’s company paid civil and criminal fines for marketing its anti-depressant drugs to children's doctors before receiving federal approval.

Solomon himself was never charged with any wrongdoing, but the Department of Health and Human Services wants to exclude him from all government contracts.

If the ban goes into effect, Solomon is as good as fired, because Forest Laboratories, like most companies that sell products to the government, needs a CEO who isn’t operating under a federal blacklist.

The exclusion penalty "is a game changer," said Richard Westling, a corporate defense attorney in Nashville, Tenn. "It would be a mistake to see this as solely a healthcare industry issue. 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."



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