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SUPERPHARM WILL PAY $1 MIL. CRIMINAL FINE

Executive Summary

SUPERPHARM WILL PAY $1 MIL. CRIMINAL FINE resulting from a corporate guilty plea in Baltimore federal court to four counts related to interstate shipments of adulterated generic drugs and unapproved new drug products. The Bayshore, N.Y. firm was sentenced in Judge John Hargrove's court April 7. Superpharm, which is virtually defunct, remains under the control of the Orlove family following the January acquisition of the family's Goldline/Bioline business by Ivax ("The Pink Sheet" Jan. 6, T&G-5). Former Helene Curtis exec Michael Orlove, who heads the family, represented Superpharm for the plea agreement. Under terms of the agreement, Superpharm is required to pay $350,000 of the $1 mil. fine within 15 days of sentencing, $375,000 after one year and the remaining $375,000 after two years, Maryland Assistant U.S. Attorney Raymond Bonner said. The guilty plea results from evidence introduced by Bonner during the February jury trial of ex-Superpharm execs Mohammed Azeem and Muhammed Mannan ("The Pink Sheet" Feb. 17, T&G-2). The two were found guilty on Feb. 12 on three and two counts, respectively, of false submissions to FDA relating to ANDAs. Their sentencing is scheduled for April 24. The government's star witness at the trial, ex-Superpharm employee Liaquat Hossain, also pled guilty and was sentenced on March 9 to three years of probation and a $10,000 fine for one count of making false statements about propanolol HCl. Two of the counts to which Superpharm pled guilty on April 7 relate to ANDAs for 2 mg and 5 mg diazepam tablets that were based on falsified R&D batch data. The company sold diazepam through 1989. The other two counts relate to shipments of adulterated 324 mg quinidine gluconate tabs and 100 mg doxycycline hyclate tabs in 1987. Superpharm employees had added magnesium stearate to batches of both drugs to solve a tablet sticking problem during manufacture. Magnesium stearate alters tablet dissolution rates. The government prosecutors noted that evidence had been introduced at the Azeem/Mannan trial showing that Superpharm employees engaged in criminal conduct other than those acts to which the company pleaded. These include: the submission of falsified stability test data to FDA; the substitution of a different lot number in test results for a new formula so that the company could avoid having to perform new bioequivalence testing; and the submission to FDA of false lab records.

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