The CEO of long-established Forest Labs, Howard Solomon, has the distinction of the Obama
administration going after him personally, and threatening him with his job. There will be no Government Medicare/Medicaid or Veteran hospital procurements unless 83-year-old Howard Solomon leaves the company. The firm pleaded guilty to marketing violations in September 2010 and agreed to a $313 Million settlement but that wasn’t enough. Now it’s personal and the Obama administration wants Solomon gone, even though the standard in the industry is that the offending company go through court or settle out of court.
A government attempt to oust a longtime drug-company chief executive over his company’s marketing violations is raising alarms in that industry and beyond about a potential expansion of federal involvement in the business world.
The Department of Health and Human Services this month notified Howard Solomon of Forest Laboratories Inc. that it intends to exclude him from doing business with the federal government. This, in turn, could prevent Forest from selling its drugs to Medicare, Medicaid and the Veterans Administration.
The campaign against drug-company CEOs is part of a larger Obama administration effort to pursue individual executives blamed for wrongdoing rather than simply punishing companies.
In other words, the government has decided to arbitrarily decide on punishment without any due process in regard to the individuals involved. The Obama administration wants the power to dictate to the private sector who can and cannot run firms that do business with Washington. I’m not sure even Ayn Rand predicted that in Atlas Shrugged…
[Richard Wrestling Defense Attorney] “It would be a mistake to see this as solely a health-care industry issue. The use of sanctions such as exclusion and debarment to punish individuals where the government is unable to prove a direct legal or regulatory violation could have wide-ranging impact.” An exclusion penalty could be more costly than a Justice Department prosecution.
He said that the Defense Department and the Environmental Protection Agency, for example, have debarment powers similar to the HHS exclusion authority.
Business leaders better kowtow to the Obama administration or else his bureaucrats will cut off the company’s ability to do business with the government. Since the government controls so many industries now, through regulations, threats and other means, these actions can destroy private companies…
The government is now in the business of bullying private companies into firing executives they dislike. What’s next? I suppose what’s next is the government forcing corporations to hire politically acceptable flunkies they prefer.
So a business that is innocent of violating regulations and wins a lawsuit, can still be presumed guilty by the government agency that regulates them and lost the lawsuit. The government can punish them because they’re in the mood to punish them.
There is an article in Bloomberg BusinessWeek about Howard Solomon and his son Andrew, who in 1994 was 31 years old. Forest Laboratories was 20+ years old then. The son was suffering severe depression. Howard Solomon took on the challenge, moved Andrew in with him and nursed him day and night, and each morning awoke Andrew to remind him, and assure him the “hopelessness would fade:
…ate dinner with Andrew every night, cutting up his son’s food when Andrew couldn’t.
In this way, the Solomons could be any parent and child brought together by a serious illness. What sets them apart is how the experience transformed both them and the company that Howard Solomon has run for the past two and a half decades. Solomon is remarkably reserved, a lawyer by training, a man used to going about his business unnoticed. But now his professional and personal lives, once as separate as any chief executive’s could be, are intertwined. All too familiar with the harrowing nature of depression and impressed by the efficacy of some medications for it, Howard sought to license a popular European antidepressant that was unavailable in the U.S.
The point is that after settling with the Department of Justice, now comes the demand from Health and Human Services for Solomon to leave the company. Have to wonder if Solomon saw that coming, and would the company have “settled” knowing the Government would do everything in it’s power to destroy him and the company. Maybe they should have anticipated it, as that’s exactly what happened at General Motors after it became Government Motors.