Head of generic drug firm is sentenced

January 23, 1993|By Norris P. West | Norris P. West,Staff Writer

A federal judge yesterday sentenced the former head of a drug company to five years in jail and a $1.25 million fine -- the largest penalty against an individual since the government began investigating generic drug fraud four years ago.

Judge John R. Hargrove imposed the sentence upon Robert Shulman, 59, of Centerport, N.Y., for filing false statements to gain approval for products made by Bolar Pharmaceutical Inc. of Copiague, N.Y.

The sentence, handed down in U.S. District Court in Baltimore, also places Shulman on two years probation following his release.

Shulman, Bolar's former president, chief executive and board chairman, pleaded guilty in November 1991 to charges of conspiracy, obstruction of justice, wire fraud and two counts of filing false statements.

He also has pleaded guilty to one count of price-fixing brought by the U.S. Justice Department's antitrust division. His 21-month sentence and $20,000 fine for that charge will run concurrently with the other charges, the judge ruled.

In a brief, straightforward statement, Shulman said he was "truly, truly sorry" for his crimes. "It was a misguided, obsessive, poorly thought-out course of action that I saw by blind design as something I had to do to protect Bolar."

Gary P. Jordan, first assistant U.S. Attorney in Maryland, said Shulman deserved to receive the stiffest penalty any individual has received in the investigation.

The scandal began in the mid-1980s when pharmaceutical companies rushed to duplicate brand-name drugs after patents for those drugs had expired. Generic companies competed to produce and market their versions, which were subject to approval by the Food and Drug Administration.

Judge Hargrove said the drug scandal was driven by greed, without regard for the safety of consumers.

Bolar was one of the companies that lied to the FDA when it was unable to adequately duplicate some of the brand-name drugs.

Nine companies and more than 30 people have been convicted on fraud charges in connection with generic drugs.

Mr. Jordan said Shulman was involved in developing a system at Bolar to keep separate sets of records. One set, sent to the FDA, contained false information. Another set showed the products' actual effects.

In 1991, Bolar was fined $10 million, the largest amount levied against a company in the investigations.

Mr. Jordan said in court papers that Bolar earned more than $140 million from illegal sales of Triamterene/Hydrochlorothiazide, a generic version of the anti-hypertensive drug Dyazide. He said the company earned more than $200 million from sales of all its illegally approved drugs.

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