Health : Settlement Will Cost Bolar $40 Million
Bolar Pharmaceutical Co. said Tuesday that it agreed to pay SmithKline Beecham Corp. $40 million to settle a lawsuit accusing Bolar of lying to get government approval for a generic version of a hypertension drug.
The settlement is the latest in a series of actions involving troubled Bolar, which in March pleaded guilty to federal criminal charges for selling adulterated and mislabeled generic drugs and was fined $10 million.
Bolar was considered the flagship company in the generic drug industry but has stumbled badly because of its admitted wrongdoing. Several top executives have resigned, and Bolar has relinquished its right to make 150 generic drugs.
SmithKline last year accused Bolar in federal court in Philadelphia of falsifying evidence that a generic version of SmithKline’s Dyazide hypertension drug achieved the same effect in the same dosage.
The lawsuit accused Bolar of back-dating testing studies to make it appear that the company’s tests were performed on a batch of Dyazide when, in fact, they were done on a batch not prepared according to federal procedures.
Bolar removed its generic version of the drug from the market in January, 1990, after acknowledging that the company had faked lab tests to win approval from the federal Food and Drug Administration.
Bolar, based in Copiague, N.Y., said it paid SmithKline $22 million when the agreement was signed and would pay the pharmaceutical giant $2 million twice a year starting in February.
The settlement does not cover similar accusations made by Philadelphia-based SmithKline against Vitarine Pharmaceutical Inc. of Springfield Gardens, N.Y.
SmithKline said in a statement it was “pleased with the settlement, particularly in light of Bolar’s available assets.”
The agreement was announced near the close of stock market trading. Bolar rose 12 1/2 cents to $5.50 on the American Stock Exchange on the day. SmithKline fell 75 cents to $65 in New York Stock Exchange trading.
In the first half of 1991, Bolar reported $19 million in losses.
