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Solomon, 83, the CEO of Forest Illustration by John Ritter
In June, under the gilded ceiling of the Gotham Hall Grand Ballroom in Midtown Manhattan, Howard Solomon was honored before hundreds of gala-goers for his contribution to the prevention of suicide among young people. Solomon is the chairman and chief executive officer of Forest Laboratories, and the event was a fundraiser for the Jed Foundation, which works with college students to promote mental health and prevent suicide. When his son Andrew took the podium, he called Solomon an appropriate honoree, “because his tenure in the pharmaceutical industry has led to drugs that save untold thousands of lives.”
“One of the lives he has saved, over and over again, is mine,” Andrew continued, before summoning his father with a simple, “Dad.”
The 83-year-old—with large glasses and receding hair—resembles a kinder version of Mr. Burns from The Simpsons and is a familiar figure at galas and fundraisers, whether as a trustee at New York-Presbyterian Hospital or a board member of the Metropolitan Opera and the New York City Ballet. His philanthropy and social standing are built on the wealth and reputation he has amassed in more than 30 years as chief of Forest Laboratories, a company whose success, in turn, has largely been built on one drug, the antidepressant Celexa.
But Forest’s aggressive marketing of Celexa and flouting of regulations has put Solomon on a far less comfortable kind of stage, one at the center of a debate over the accountability of the pharmaceutical industry and its leadership, and the limits of government power. On Apr. 12, Solomon learned that the Office of Inspector General, or OIG, which handles the U.S. Health and Human Services Dept.’s efforts to fight waste and fraud in government health programs, is considering “excluding” him. Technically, this means exclusion from doing business with federal health programs such as Medicare, Medicaid, and the Veterans Affairs Dept. Functionally, it means a ban from the entire health-care industry. Personally, it is a censure, the equivalent of an official shaming. And for American business it seems to presage an increased government effort to hold executives accountable, making corporate misbehavior personal for leaders who may have seen monetary punishment as a mere line item for shareholders to bear.
The OIG has not announced a decision, at least publicly, but the potential move is already disrupting the company. Forest is facing a proxy battle and lawsuit from Carl Icahn, the corporate raider and activist shareholder. Companies he controls have built a stake of about 7 percent in Forest, nominated four new members for its nine-member board, and are suing the drugmaker in the Delaware Court of Chancery for details on why the government is seeking to bar Solomon.
Exclusion is common enough; the Health and Human Services Dept. punishes about 3,000 people a year this way, often because of criminal convictions. Solomon stands out because the Justice Dept. has never charged him with wrongdoing, nor has he ever admitted to wrongdoing, not even in Forest’s $313 million settlement last year on charges related to the marketing of antidepressants and the distribution of an unapproved drug, the thyroid medication Levothroid.
If the government decides to exclude Solomon, Forest would be forced to get rid of him—or lose its business with the government. Despite the risks, an Apr. 13 company press release disclosing the notice struck a defiant tone, quoting board member William J. Candee III saying, “Mr. Solomon has always set a tone of the highest integrity from the top. … We believe the potential HHS-OIG action may well be beyond its legal authority.”
Solomon submitted his response last month, according to Lesley Bogdanow, a company spokeswoman, who declined to comment further on the matter. Now he must wait for a decision from the OIG. And the drug industry is left to ask: Why Howard Solomon?
