A pharmaceutical company admitted Friday in a settlement that it marketed a powerful depressant to doctors for illnesses it was not approved to treat.
Orphan Medical Inc., a subsidiary of Jazz Pharmaceuticals Inc., pleaded guilty in U.S. District Court in Brooklyn to a charge of felony misbranding of a pharmaceutical product, agreeing along with Jazz to pay $20 million in penalties.
Prosecutors said the company illegally promoted Xyrem, also known as gamma-hydroxybutyrate or GHB for unapproved uses. It is a powerful and fast-acting central nervous system depressant, also classified by the Department of Health and Human Services as a date-rape drug.
Mark J. Mershon, who heads the FBI office in New York, said pharmaceuticals manufactured under strict standards can still injure or kill if used for unauthorized reasons.
"Tainted, counterfeit or illicit drugs are not the only ones that pose substantial health risks for consumers," he said.
In July 2002, the FDA approved the sale of the drug for the treatment of cataplexy, a condition in which weak or paralyzed muscles manifest themselves in a sleep disorder known as narcolepsy. It was later approved for treatment of excessive daytime sleepiness.
But Orphan admitted in its plea that it promoted the drug to physicians for off-label uses including fatigue, insomnia, chronic pain, weight loss, depression, bipolar disorders and movement disorders such as Parkinson's Disease.
The company also admitted that it paid a psychiatrist tens of thousands of dollars to promote the drug in speeches across the country. The psychiatrist even suggested that the drug was safe for children and the elderly and that the active ingredient was not really a date-rape drug, prosecutors said in a release.
The law firm of Phillips & Cohen said in a release that its client, Shelley Lauterbach, a former sales representative for Orphan, filed a whistleblower lawsuit in 2005 that reported the company's behavior.
As a label on boxes of the drug warned, Xyrem can induce sleep quickly and cause serious side effects including difficulty breathing while asleep, confusion, abnormal thinking, depression, nausea, vomiting and sleepwalking.
Improperly used, the drug can cause dependence as well as seizures, coma and even death, the government said.
Orphan will pay criminal restitution to public and private health insurers of $12.2 million and a criminal fine of $5 million. The companies will also pay $3.75 million, plus interest, a portion of which was ordered in the criminal case, to resolve civil charges.
Shares of Jazz fell 61 cents, or 3.98 percent, to $14.73 Friday.
Copyright 2007 AP Features
