Founder of Generic Drug Firm Fined, Gets Jail Term in Bribery

A former generic drug company executive was fined $250,000 and ordered to serve 60 days of an 18-month jail sentence after pleading guilty to bribing Food and Drug Administration officials, the U.S. attorney in Baltimore announced Thursday.

Dilip P. Shah, 43, a founder and former president of Quad Pharmaceuticals Inc., also was ordered to devote 12 months of full-time community service to the American Cancer Society.

Shah’s was the first sentence to be handed down in the widening generic industry scandal, in which three corporate executives, three FDA employees and two corporations already have been convicted. More indictments are expected.

Shah admitted to illegal payoffs of about $23,000 to Charles Y. Chang, a former branch chief in the FDA’s generic drugs division; $8,000 in cash to David Brancato, a review chemist in Chang’s branch; and two $500 department store gift certificates to Walter Kletch, a review chemist in another branch in the division.

At the time the payments were made, Chang, Brancato and Kletch had reviewed and recommended approval of drugs manufactured by Quad, which is the liquid products subsidiary of Par Pharmaceuticals Inc. of Spring Valley, N.Y.

Gary P. Jordan, the first assistant U.S. attorney who prosecuted the case, said Shah had agreed to cooperate with the government during the early stages of its investigation.