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Executive Summary

GENERIX INDICTMENT INVOLVES CHARGES OF OBSTRUCTING FDA INSPECTIONS and conspiring to deceive the agency. The Hollywood, Fla.-based firm and four officials -- President Lewis Orlove, Exec VP Gary Dubin, VP-Repackaging Ofelia Perez, and Warehouse Manager Robert Woolverton -- were indicted on Jan. 22 by a grand jury in Fort Lauderdale Federal Court for allegedly hiding stocks of unapproved Rx drug products from FDA investigators. The indictment identified eight Rx drugs that it said were distributed by Generix without FDA approval: allopurinol, betamethasone valerate, diethylpropion HCl, furosemide, hydrochlorothiazide with triamterene, hydroxyzine HCl, metronidazole, and spironolactone. The alleged conspiracy occurred from 1979-1981. Several of the drugs named in the indictment were at the heart of the Generix suit v. FDA that culminated in the 1982 Supreme Court decision upholding the agency's authority to require premarketing approval of generic drugs. A Justice Dept. press release notes that a conviction of obstructing FDA inspections would carry a maximum penalty of five years in prison and a $5,000 fine; a conspiracy conviction would carry a maximum penalty of five years in prison and $10,000 in fines. The department added that charges against Orlove, Dubin, and Woolverton for falsifying records carries upon conviction five years in prison and $10,000 in fines. The indictment charges that "in order to evade inspection" Generix employees were ordered "to alter . . . and hide receiving records" and "to hide Rx drugs at the Generix Warehouse in Hollywood, Fla.," in a warehouse vault, and at a lease warehouse. In addition, the defendants allegedly caused employees "to take Rx drugs home preceding and during FDA inspections," to hide quantities in a van and an employee handbag, and "to feign ignorance as to the existence and location of certain Rx drugs to FDA investigators during FDA inspections."

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