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FORMER PHARMAKINETICS EXEC PERKAL SENTENCED TO FOUR MONTHS HOME DETENTION; EX-BOLAR PRODUCT DEVELOPMENT MANAGER RODRIGUEZ GETS TWO MONTHS DETENTION

Executive Summary

Former PharmaKinetics' exec Mark Perkal, PhD, was sentenced on July 22 to four months home detention, two years probation, and fined $10,000 for obstructing an FDA investigation into irregularities concerning Bolar's generic version of Dyazide. Perkal pled guilty in June 1991 to allowing Bolar officials to switch samples of the antihypertensive drug being retained by the Baltimore testing lab just prior to a June 1989 visit by FDA investigators ("The Pink Sheet" June 24, 1991, T&G-15). At that time, PharmaKinetics paid a $200,000 fine in connection with the charge. In sentencing the 46-year-old PharmaKinetics founder and former chief scientific officer, Baltimore federal court Judge John Hargrove took into consideration Perkal's cooperation with the government in providing information for the criminal charges against former Bolar President Robert Shulman and Exec VP Jack Rivers, as well as his involvement in community service. Under the sentencing guidelines, Perkal could have received 14 months in jail and a $20,000 fine. Perkal came forward in December 1990 after it became clear that Shulman and Rivers would be indicted by the Maryland U.S. Attorney's Office. The former PharmaKinetics officer told the government that in June 1989 he had decided to examine samples of generic Dyazide (triamterene/hydrochlorothiazide) submitted by Bolar to the contract lab following revelations that the generic firm Vitarine had switched the innovator SmithKline product for its version of Dyazide for bioequivalence testing. However, after determining that Bolar also had submitted the innovator product as its sample, Perkal allowed Bolar's Rivers to substitute the company's triamterene/hydrochlorothiazide for the innovator product and failed to notify FDA investigators of the switch when they inspected a few days later. He then prepared a false memorandum covering up the true nature of the meeting. Hargrove reduced Perkal's incarceration time to four months home detention without an electronic bracelet, citing the former PharmaKinetics exec's extensive involvement in Baltimore's Orthodox Jewish community. Looking around the court room, filled with rabbis and other members of the community, Hargrove commented to Perkal: "You wouldn't have this many people come out for you if you hadn't done something good." Several members of the community testified to Perkal's integrity and exemplary life. The judge said that home detention would allow Perkal to continue uninterrupted the role of raising his 10 children. While Hargrove ultimately agreed to a reduced sentence, he did not accept the defense's argument that Perkal should be given a reduced sentence based on the principle of duress. Defense attorney David Irwin (Baltimore-based Irwin, Kerr, Green, McDonald and Dexter) had contended that Perkal withheld information on the Dyazide switch during eight different government inquiries because he feared for his family's safety. Specifically, the defense maintained that Bolar exec Shulman had threatened both Perkal and his family during a meeting held to convince the PharmaKinetics exec to switch the samples. Perkal's rabbi, who was called to consult at the meeting along with Shulman's rabbi, testified to Shulman's violent rage. In support of its argument, the defense called AgVar Chemicals President Agnes Varis to testify to Shulman's proclivity to anger and threats. Calling Shulman "the biggest con man in the pharmaceutical industry," Varis told the court that Shulman had once threatened her when she planned to take business from Bolar. However, under cross-examination by Maryland Assistant U.S. Attorney Lawrence McDade, Varis admitted that the threats were mostly economic in nature, explaining: "I am bigger than Bob Shulman so he wouldn't threaten physical harm to me." In letters to the court, former Schein exec William Haddad, Generic Pharmaceutical Industry Association President Dee Fensterer and PharmaKinetics VP-Business Development Max Mendelsohn testified to Shulman's violent temper. Mendelsohn said Shulman once threatened him with a gun. Hargrove dismissed the defense's contentions, saying that the greatest threat Perkal faced from Shulman was probably financial ruin since over 50% of PharmaKinetics' business comprised testing of Bolar products. "The bottom line of all this is making money," Hargrove remarked. The judge noted that Perkal had "more than one opportunity to tell someone" about the Dyazide switch over the period of 13 months during which he met with FDA investigators, the U.S. Attorney's Office and Congressional staff to discuss questions regarding samples of other Bolar products. The Baltimore federal court judge maintained that many generic companies are currently "suffering because of a few" such as Bolar. "Every little violation in this investigation is important," Hargrove said. He added that consumers also have been hurt by the withdrawal of many generic products from the market because of falsifications. They are being forced to "spend exorbitant amounts of money to buy name brand [drugs]," Hargrove maintained. On July 24, Judge Hargrove sentenced former Bolar Product Development Manager Juan Rodriguez to two months home detention and fined him $2,860 for attempting to obstruct a 1989 FDA investigation. Rodriguez, who pled guilty on Oct. 3 ("The Pink Sheet" Oct. 7, 1991, T&G-12), was persuaded by a Bolar senior officer to rewrite his personal log detailing manufacturing procedures of the company's generic version of Dyazide. Rodriguez deleted all references to a lot of the triamterene/hydrochlorothiazide drug that had been produced during January 1987. Maryland Assistant U.S. Attorney Gary Jordan noted to the court that before Rodriguez's original notebook was destroyed, he made a copy of it which he turned over to the government during its investigation of Bolar. "My client's biggest mistake was an error in judgment," defense attorney Joseph Kuida told the court. "My client received no financial gain by helping a friend in need." After apologizing for his wrongdoing, Rodriguez said: "I was naive and I was made a fool of by someone I trusted." Hargrove responded that he understood that Rodriguez played a minor role when he was asked to bail Bolar out of a "squeeze." But "in the scientific field, you don't just change records when you know they are going to be examined," Hargrove said. "You knew it was wrong, but it was a serious mistake." Perkal and Rodriguez were the fifth and sixth defendants to be sentenced in connection with improprieties committed by Bolar. Jack Rivers was sentenced on July 10 to four years in prison without parole and fined $1 mil. ("The Pink Sheet" July 13, T&G- 5). During the week of July 13, former Bolar regulatory affairs personnel Susan Long and Gloria Schetlick received 18-month prison terms. Former Bolar R&D Director and whistleblower Gena Finelli was given three years probation ("The Pink Sheet" July 20, p. 5). VP-Operations Charles DiCola and ex-Quality Assurance Director Arthur Mendell will be sentenced on Sept. 9 and 18, respectively. Shulman is scheduled for sentencing on Sept. 25.

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