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Forest Labs Case - Essay Example

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Was the Government wrong against Howard Solomon Forest Labs? Howard Solomon is the head of Forest Labs which is a growing pharmaceutical company in the United States. He has been the CEO of this company since 1977, and the proxy statement of the company in 2010 says that “he possesses detailed and in-depth knowledge of the issues, opportunities and challenges facing the company” (Henning)…
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Forest Labs Case
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Download file to see previous pages The new profits earned through the sales of Celexa were used by Solomon for the expansion of the company; he licensed several other drugs from pharmaceutical companies of Europe. However, Solomon has been accused of excessive marketing and the expansion of Forest is deemed as dangerous for other companies. Also, the profits made by Forest Labs over such a short span of time are unreasonable high. The previous year Solomon earned $8.3 million as the CEO of the company. However, it was found out that the Marketing Department had been marketing the earlier named antidepressants to adolescents and children, and that too illegally, although these drugs are not suitable for them. Hence, the Obama Administration decided to oust Howard Solomon from doing further business. Solomon agreed to pay a fine of $313 million for resolving the issue (Hooper and Henderson). In my opinion, the decision taken by the Government was ethical. This is because several pharmaceutical companies have been alleged of conducting business unethically in the past, but none of the charges or penalties levied against them seemed to have a deterrent effect on their business. Ousting a companies' CEO for conducting such activities should definitely bring out the desired effect as he would make efforts to correct the mal-practices prevalent in his company. There is always a counter argument which states that only ousting a CEO would not prevent the company from putting an end to its illegitimate practices; one should rather take a serious action against the entire marketing department which can directly be blamed for the offense. But, being the CEO of the company, the Government has full rights to hold Howard Solomon accountable for all the mal-practices going on within his company. The company shall also be fined a very heavy sum which is equivalent to the amount of sales made during the period of illegal marketing. But, I believe, the Government is justified in taking the step it took as it would serve as a starting ground and other CEOs whose companies are also indulged into such activities would learn lessons from it and would take action to stop any objectionable activities within them. By taking this decision, the Government is trying to send a message to the entire industry which, hopefully, would be heard by them. Also, there is a certain provision in the Federal Law that legitimizes the exclusion of an individual who has not been alleged of a crime. Hence, this action of the Government is in coherence with the American Law and thus, the Government cannot be questioned. By concealing negative case study about Celexa and by pushing sales representatives to pay illegal kickbacks to pediatricians, the senior executives of Forest Labs indeed proved to be highly culpable (Singer). Antidepressants can be highly lethal for adolescents and children. It is a belief that this is a cause of suicidal behavior in children and mental illnesses. This fact has been verified by the Food and Drug Administration (FDA). Among the various side effects that children experience due to such medications the common ones are feelings of sedation and weight gain, whilst some children may feel more energized with the intake of antidepressants. In short, antidepressants cause psychotic problems in children which are very harmful. Hence, I believe that ...Download file to see next pagesRead More
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