Remember Able Laboratories?

Two years ago, the little-known company imploded - in a very big way - over fabricated test results. Widely used meds were recalled. Some 500 employees lost jobs. Investors lost money. And the episode renewed concerns about FDA oversight and the safety of generics.

Earlier today, some of those responsible for this mess gave themselves up. During a 90-minute hearing in federal court in Newark, NJ, the former vp of quality control and regulatory affairs, Shashikant Shah, pled guilty to one count of distributing misbranded or adulterated drugs and another count of securities fraud. According to court documents, Shah made $909,000 trading options on inside information.

Three other former Able employees - two quality-control supervisors and a lab manager - also pled guilty to one count of distributing misbranded or adulterated drugs. Each count carries a maximum of 5 years and a $250,000 fine. Shah, therefore, faces 10 years and a $500,000 fine.

But there’s much more, of course.

The court document describing the options trading refers to unnamed co-conspirators. Under questioning, Shah acknowledged receiving instructions from “higher level executives” to “falsify and manipulate” test data. And three years ago, Shah admitted, he received directions from none other than former Able ceo, Dhananjay Wadekar, to oversee a “secret project” to falsify quality assurance records. Anyone participating in this scheme received a bonus.

Wadekar, who has not been charged in the case and lives outside Boston, couldn’t be reached for comment. But Robert Kirsch, an assistant US attorney promises that “the investigation is active and ongoing.”

Thanks to George Jordan of The Star-Ledger of New Jersey for the dispatch and documents.

[tags]Able Laboratories, Generics[/tags]