Private-Label Drugmaker Pays $10M Fine For Fraud
Make a commentBy Ed Silverman // July 9th, 2008 // 10:02 am
A federal judge ordered a drugmaker that supplies private-label meds to pay $10 million in connection with fraud, the Associated Press reports. US District Judge Joseph Anderson Jr. fined Leiner Health Products $1 million and ordered the company to forfeit an additional $9 million in profits for falsifying info on expiration dates for its medications.
The now-bankrupt Leiner, which is based in Carson, California, is one of a few major companies that produce off-brand, over-the-counter meds like pain relievers, antacids and decongestants for retailers such as Wal-Mart and Target. US Attorney Walt Wilkins tells the AP the government found no evidence the drugs were unsafe.
The FDA suspended drug-making operations at Leiner’s manufacturing facility in Fort Mill, North Carolina, last year after inspectors found the plant was not complying with regulations. Samples taken from seven different product lines showed more than 1,200 batches of drugs sent by Leiner to retailers and pharmacies did not meet shelf-life standards, according to Wilkins, the AP writes.
The investigation, which was prompted by a tip from an employee, led to product recalls. Leiner temporarily halted production and distribution of generic over-the-counter meds - about 25 percent of its total business. In June, the drugmaker pleaded guilty to mail fraud, a charge prosecutors linked to sending falsified data about its product stability and shelf-life to the FDA.
Leiner filed for Chapter 11 bankruptcy protection in March and, last month, nutritional supplement maker and retailer NBTY bought Leiner for about $371 million at an auction. An attorney for Leiner did not immediately return a message seeking comment, the AP writes.
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Fraud, Leiner Health Products, Private Label, Target, Wal Mart