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PHARMAKINETICS FORMER CHIEF SCIENTIST PERKAL PLEADS GUILTY

Executive Summary

PHARMAKINETICS FORMER CHIEF SCIENTIST PERKAL PLEADS GUILTY to obstructing justice by permitting Bolar executives to replace samples of allegedly generic versions of Dyazide held by the Baltimore contract testing lab prior to their collection by FDA. Mark Perkal, PhD, a PharmaKinetics founder and its chief scientific officer until November 1990, entered the guilty plea before Judge John Hargrove in Baltimore federal court June 18. PharmaKinetics also entered a guilty plea on the same charge and agreed to pay a $ 200,000 fine. The company had said it would settle when charges were filed May 22 ("The Pink Sheet" May 27, T&G-3). PharmaKinetics announced in August 1990 that both it and Perkal were under investigation by a Baltimore grand jury in the switch investigation. Maryland U.S. Attorney Richard Bennett noted that PharmaKinetics "has cooperated with the government throughout the investigation and that Dr. Perkal has been assisting government investigators for the past six months." There is no evidence that Perkal received any payoff associated with the switch, the Maryland U.S. Attorney's office said. Perkal's sentencing is set for Oct. 8 at 9:30 a.m. pending completion of his cooperation with the government. He faces a maximum penalty of five years in prison and a maximum fine of $ 250,000. Bolar's generic vresion of SmithKline's Dyazide (triamterene/hydrochlorothiazide) was approved by FDA in August 1987. PharmaKinetics performed bioequivalence testing for Bolar's allegedly generic version of Dyazide in late 1986. The Justice Department "presented evidence to Judge Hargrove that, unbeknownst to any [PharmaKinetics] employee, Bolar had provided [PharmaKinetics] with capsules which... in fact, contained the ingredients of the brandname product," the Maryland U.S. Attorney said. Perkal decided to check the validity of the Bolar samples on June 23, 1989 when he heard that Vitarine had switched the innovator product for its version of Dyazide for bioequivalence testing performed by PharmaKinetics, according to the statement of fact entered with the guilty plea. He then examined retained samples of the drug submitted by Bolar and noticed that they were closer in color to SmithKline's product than to Bolar's, Justice said. "Dr. Perkal discussed this discovery with other members of senior management of [PharmaKinetics]," the statement of fact says. Then-CEO Steven Woodman called Bolar on June 26. "On June 27, 1989, two Bolar officials traveled to PK headquarters in Baltimore," the statement of fact says. Woodman "had to leave on a business trip to Germany and asked Dr. Perkal to deal with the Bolar officers." The two officers reportedly were former Bolar President Robert Shulman and Exec VP Jack Rivers. According to Justice, the Bolar execs disclosed at this meeting that the substitution had been made and asked Perkal to let them replace the innovator capsules with their own product before FDA collected the samples. At first, Justice said, "Dr. Perkal repeatedly refused their request." "The Bolar officials threatened to withdraw future business from [PharmaKinetics] and to refuse to pay for services that already had been performed unless [PharmaKinetics] assisted Bolar," the statement of fact says. "Dr. Perkal was repeatedly told by the Bolar officers that revelation of the switch could ruin Bolar and that if Bolar went down that they would insure that [PharmaKinetics] would go down with them." According to the court's statement of facts, Perkal "stated that the only way he would consider taking such action would be after consulting with his rabbi" with whom "he had maintained a very close relationship... for more than 20 years." Perkal and the two Bolar officials "immediately flew to New York City where they met with Dr. Perkal's religious adviser. " The rabbi concluded that Bolar "would not give up," the statement of fact says. "The religious adviser told Dr. Perkal that if he were to allow the Bolar officials to switch the samples, he should keep his involvement in such activity to a minimum. At this point, Dr. Perkal agreed to allow the switch." The switch was made by "one of the Bolar officers in question" the next day, June 28, the statement of fact says, and FDA investigators collected the samples on June 30. Perkal then "prepared a memorandum which misrepresented his contacts with Bolar officials concerning the retained samples." That memo was later given to FDA, Rep. Dingell's (D-Mich.) Oversight Subcommittee, and the federal grand jury in Baltimore, Justice said. Perkal also told investigators working with the FDA, Congress, and the grand jury that he had no knowledge of a Dyazide product substitution. Perkal "did not tell the CEO or any other [PharmaKinetics] employee what actually occurred on June 27-28," Justice said.
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