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EX-PBI AND PAR EXECS CHARGED WITH MAKING FALSE STATEMENTS

Executive Summary

EX-PBI AND PAR EXECS CHARGED WITH MAKING FALSE STATEMENTS to the government, the Maryland U.S. Attorney's Office announced Feb. 25. Former Pharmaceutical Basics, Inc. Research and Development Manager Kumar Prasad is charged with making false statements in connection with PBI's submission of an ANDA for timolol (Merck's Blocadren). Former PAR R&D Director Padam Bansal is charged with providing false and misleading testimony to a federal grand jury investigating Par's ANDA for triamterene/hydrochlorothiazide (Mylan/Lederle's Maxzide). Both men are "cooperating with the continuing investigation of" their respective firms, the U.S. Attorney's Office said. Sentencing dates have not been set. Prasad is charged with submitting an ANDA to FDA on April 21, 1987 for timolol which contained "batch production records for reference batch x-908 that misrepresented the batch size actually produced, the quantity of the active ingredient used, and the laboratory number of the inactive ingredients actually used," according to the criminal information. At the time the batch records were created Prasad was employed by Colmed. PBI subsequently acquired the assets of Colmed. PBI received the first timolol approval on Jan. 10, 1989. One former PBI/Colmed exec, VP Raj Matkari, was sentenced in July 1989 for paying illegal gratuities to FDA. In January 1991, PBI announced that it was suspending manufacturing at its Denver facility after discovering "apparent discrepancies" in some preproduction batches ("The Pink Sheet" Jan. 21, 1991, T&G-11). FDA requested a recall of 61 products, including timolol, and filed token seizure actions in August ("The Pink Sheet" Aug. 26, 1991, p. 10). PBI agreed to the recall in November ("The Pink Sheet" Nov. 18, 1991, T&G-8). Prasad faces a maximum sentence of five years in prison and a $250,000 fine. In the case of Par, the criminal information charges that Bansal "knowingly [gave] false and misleading testimony to the grand jury [during his May 22, 1990 testimony] concerning his knowledge of, and participation in, the submission of a false pilot batch record for batch N02305 in support of an ANDA application for triamterene/hydrochlorothiazide." Par recalled its generic Maxzide in July 1989 when the company's new management discovered that an executive had switched samples during an FDA inspection. Par paid $2.5 mil. to settle 10 felony counts brought against the company in November ("The Pink Sheet" Nov. 25, 1991, T&G-15). One of the counts included falsifying data for the Maxzide application. Former Par Senior VP Ashok Patel pled guilty in October 1989 to offering illegal gratuities to FDA officials. Par subsidiary Quad's ex-CEO Dilip Shah also pled guilty to offering illegal gratuities. Par was fined $650,000 at that time. Par now operates as a subsidiary of Pharmaceutical Resources; Quad was discontinued and sold to T&S Holding in January ("The Pink Sheet" Jan. 20, In Brief). "To date, 23 individuals and five companies have been convicted as a result of the probe," the U.S. Attorney's Office said. "Additional charges are anticipated."
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