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ORAFLEX CASE: JUSTICE DEPT. DECISION TO PROSECUTE LILLY's SHEDDEN

Executive Summary

ORAFLEX CASE: JUSTICE DEPT. DECISION TO PROSECUTE LILLY's SHEDDEN alone, rather than four company officials, was made by Deputy Attorney General D. Lowell Jensen, according to Acting Asst. Attorney General Richard Willard, who heads the departments Civil Div. In a Sept. 12 letter to Senate Judiciary Cmte. Chairman Thurmond (R-SC), Willard wrote: "Attorneys in the Office of Consumer Litigation of the Civil Div.. . .recommended bringing misdemeanor charges against the corporation and four of its employees." However, Jensen ultimately "decided that the corporation and one individual would be charged." Even though "the question of charging some of the four individuals was admittedly a close one, I saw no reason to overrule the staff recommendation or to prepare a separate recommendation of my own. Therefore, I forwarded the staff recommendation to Mr. Jensen as the Civil Div.'s recommendation." Willard explained. Nonetheless, he added, "although I did not recommend against prosecution of the other three individuals, I am satisfied that Mr. Jensen's decision was a proper exercise of prosecutorial discretion based upon the facts of the case." Willard's letter and Sept. 9 and 10 letters from Jensen were written in response to questions from Sen. Metzenbaum (D-Ohio) of the Judiciary Cmte. Following a July 24 confirmation hearing on Willard's nomination as asst. attorney general, Metzenbaum insisted on knowing Willard's role in the prosecution as acting asst. attorney general. After meeting with Willard on Sept. 12 and receiving a letter in which the acting attorney general stated that he was "inclined to agree with" the staff recommendation to prosecute four Lilly employees, Metzenbaum cleared the way for full Senate consideration of the Willard nomination. In defense of his department's prosecution of Lilly, and its former VP and Chief Medical Officer Ian Shedden, MD (now with Glaxo), Jensen maintained that "successful prosecution" in the Oraflex and the SK&F Selacryn cases were "two unprecedented achievements," which constituted "milestones in our long history of enforcement of the federal FD&C Act." Since passage of the 1962 efficacy amendments, "no administration had prosecuted a pharmaceutical company for failure to report adverse reactions associated with its drug product," Jensen explained. "Within the past year, these two prosecutions and the resulting convictions of two of the nation's largest pharmaceutical mfrs. have served notice that the Justice Dept. stands ready to take appropriate measures to ensure that information vital to the public's health and safety is communicated to FDA. We are confident that our handling of these cases will advance the public interest by fostering strict adherence to the requirements of the law," he said. Lilly's fine of $25,000 was the maximum penalty allowed under the law, Jensen noted. "We share the view that larger fines would enhance the deterrent effect of such convictions; however, that view is tempered by the reality that we were operating in these cases under an antiquated statutory limitation on penalties," he said. Under recent criminal code amendments, "the maximum fine for offenses such as those involved in these cases has been raised to $100,000 for offenses committed after Dec. 31, 1984. If this new law had been in effect at the time of the offenses of which Lilly was convicted, the maximum fine for Lilly could have been as much as $2.5 mil.," the deputy attorney general said.

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