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Executive Summary

CHELSEA LABS GUILTY PLEA ON MECLOFENAMATE SODIUM includes a $500,000 corporate fine on one count related to shipments of the arthritis drug, the Maryland U.S. Attorney's office announced April 8. The charge relates to shipments in the mid-1980s of meclofenamate sodium 100 mg capsules that were based on a falsified ANDA application approved in 1986. Chelsea entered the guilty plea in Baltimore federal court before Judge John Hargrove on April 8. The fine includes the government's costs for the investigation into Chelsea's ANDA approvals. Earlier, as a result of that investigation and the company's internal review, the Monroe, N.C.-based subsidiary of Rugby Labs withdrew approved ANDAs for 55 products and 14 pending ANDA applications. Chelsea currently has 75 ANDAs and says applications for other ANDAs are pending with the agency. With regard to meclofenamate, Chelsea requested that FDA withdraw the drug's ANDA in November along with 19 other approvals. At the same time, the company also agreed to withdraw 31 other product strengths for which it had been contesting withdrawals on the grounds that the manufacturing variances in the records were said to be minor ("The Pink Sheet" Dec. 16, 1991, T&G-11). Chelsea stopped producing the suspect products in early 1990 and initiated a recall on all 55 products in early November 1991. The government charges against Chelsea state that the company combined two test batches of meclofenamate and generated lab data from that combined batch. A false pilot batch record was then submitted to FDA, Maryland Assistant U.S. Attorney Christopher Mead reported. A statement of facts submitted to the Baltimore federal court lists additional Chelsea violations before 1987, including the use of an unapproved capsule coating company for some test batches; the submission of paperwork to FDA implying that Chelsea had coated the capsules itself; and the manufacture of some test batches at its R&D facility rather than at its production facility where the ANDA said the batches were made. The company "fully cooperated with the government's investigation," the prosecutor noted, "including sharing the results of its own internal audits." Chelsea began an internal review of its ANDAs two-and-one-half years ago and reported its findings, as they became known, to FDA between January 1990 and September 1991, when the agency made the latest of a series of requests for ANDA withdrawals. Chelsea noted April 8 that "the people who were responsible for these activities are no longer with the company" and none of the suspect product remains on the market. The company said the recordkeeping problems that led to the ANDA discrepancies were rectified in a reorganization initiated in 1985-1986 and that Chelsea began "rigorous documentation procedures" in 1987.

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