SmithKline Beckman Corp. pleaded guilty in federal court tonight to 34 misdemeanor counts charging the pharmaceutical company with failure to disclose adverse reactions to a prescription drug.
At the same time, three physician-executives pleaded no contest to 14 counts.
The case, which involved Selacryn, a medicine for high blood pressure, was the first in which Food and Drug Administration reporting regulations were used as the basis of a criminal proceeding against a drug company and its officials.
Judge Edward N. Cahn delayed sentencing, saying he will advise the physicians if incarceration is a "possibility." If he decides it is, he said, they will be free to change their no-contest pleas -- which he equated with guilty pleas, under the law -- to innocent.
Each count carries a maximum possible sentence of one year in jail and a fine of $1,000. SmithKline, which is one of Philadelphia's largest corporations, faces a maximum penalty of a $34,000 fine.
Two of the doctors, who still work for SmithKline, and their titles at the time of the offenses in 1979 are: Philip Tannenbaum, 55, vice president and medical director of United States Pharmaceutical Products, a unit of the SmithKline and French Laboratories (SK&F) division; and Ralph M. Myerson, 66, group director, medical affairs, for the USPP unit. Theodore Selby, 58, who was the unit's former associate director for medical affairs, now works for Wyeth Laboratories.
Dr. Thomas G. Davis, 57, vice president and medical director of SK&F, who was named in 20 counts, continues to plead innocent. All five defendants had pleaded innocent after the office of the U.S. attorney in Philadelphia filed the 34-count information six months ago today.
The doctors and, for the company, Vice President and General Counsel Richard Holmes, entered the pleas at the close of a two hour and 20 minute proceeding in which Judge Cahn made certain that each defendant acted with full understanding of the potential consequences.
The defendants had entered into a plea agreement with the government, represented by assistant U.S. attorney Peter J. Smith, under which the government will not oppose the no-contest pleas, will dismiss 20 charges against the individual defendants, and will not make a sentencing recommendation.
For all of the defendants, counsel Donald J. Goldberg emphasized -- and Smith agreed -- that a four-year investigation and a search of 600,000 documents had turned up no evidence of criminal intent.
Selacryn (Ticrynafen) has been tied by George Washington University Medical Center researchers to 25 fatal and 315 non-fatal liver injuries in U.S. consumers, who number an estimated 300,000 to 350,000. The scientists rated a cause-effect link "likely" in 249 cases and "possible" in 91.
Selacryn originally was sold in France by Albert Rolland, S.A. (Anphar). Under license, SmithKline sold it here from early May 1979 until Jan. 16, 1980, when the FDA forced the company to halt sales and recall unsold supplies.
The charges arose from reports of adverse liver reactions that Anphar made to SmithKline at about the time U.S. sales began but that the firm discounted as benign and reversible. Indeed, Goldberg said, the victims cited by the French company recovered fully. But, he said, not until November did the company learn that the particular liver damage could be irreversible and fatal. If SmithKline had known that at the outset, it never would have tried to sell the drug, he told the court.
The 20 counts dropped against the physicians -- and the only ones standing against Davis -- charged all of the defendants with having shipped Selacryn across state lines with false and misleading prescribing instructions that failed to reveal that the drug had caused adverse reactions and falsely claimed that no cause-effect relationship with liver damage had been shown.