IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA
Exhibit 10.15
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
UNITED STATES OF AMERICA
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: | |||
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v. |
: | CRIMINAL NO. | ||
XXX XXXXX AND COMPANY
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: |
Under Federal Rule of Criminal Procedure 11(c)(1)(C), the government, the defendant, Xxx Xxxxx
and Company (hereinafter “Xxx Xxxxx”), and Xxx Xxxxx’x counsel enter into the following guilty plea
agreement. Any reference to the United States or the government in this agreement shall mean the
Office of the United States Attorney for the Eastern District of Pennsylvania and the Office of
Consumer Litigation of the Department of Justice.
1. Xxx Xxxxx agrees to plead guilty to Count One of an Information, waiving prosecution by
indictment, charging it with the introduction into interstate commerce of drugs that were
misbranded, a misdemeanor, in violation of 21 U.S.C. §§ 331(a), 333(a)(1) and 352(f)(1), and not to
contest forfeiture as set forth in the notice of forfeiture seeking forfeiture of $100,000,000 in
substitute assets, in lieu of the drugs which were promoted illegally and are no longer available,
all arising from Xxx Xxxxx’x illegal promotion of its drug Zyprexa in the United States between
September 1999 and March 31, 2001. Xxx Xxxxx further acknowledges its waiver of rights, as set
forth in Exhibit A to this agreement.
2. The
parties agree that this plea agreement is made pursuant to
Fed.X.Xxxx.P. 11(c)(1)(C) and that the following specific sentence is the appropriate disposition
of this case. Taking into consideration the factors set forth in 18 U.S.C. §§ 3553(a) and 3572, the
agreed upon sentence is as follows:
A. Xxx Xxxxx agrees to pay the special assessment in the amount of
$125 on the date of sentencing.
B. Xxx Xxxxx agrees to pay $615,000,000 to resolve this Information, of
which $515,000,000 will be applied as a criminal fine, and $100,000,000 will be applied as
substitute assets to satisfy the forfeiture obligation described in paragraph 2(C) below. Xxx
Xxxxx will pay these amounts within 10 business days of the date of sentencing. Xxx Xxxxx and the
government agree that this fine and forfeiture represent a fair and just resolution of all
issues associated with loss, fine and forfeiture calculations.
C. Xxx Xxxxx agrees that as a result of its acts or omissions, the
forfeitable property, that is the drugs which were promoted off-label, are no longer available
for forfeiture as the drugs cannot be located or have been transferred, sold or deposited with a
third party, or otherwise disposed of, within the meaning of federal law. As a result, Xxx Xxxxx
agrees to the entry and satisfaction of a judgment and preliminary order of forfeiture on the date of
the guilty plea, forfeiting to the United States the sum of $100,000,000 as substitute assets for
the pertinent drugs. Xxx Xxxxx agrees that, within 10 business days of the date of sentencing, Xxx
Xxxxx will make payment to the United States, by means of a wire transfer to the United States
Marshal Service or check payable to same, in the amount of $100,000,000, this amount representing
substitute assets of the offense for which it is pleading guilty, subject to forfeiture in
full satisfaction of the judgment and preliminary order of forfeiture.
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D. In light of the anticipated Corporate Integrity Agreement, Xxx Xxxxx will not be
placed on probation.
3. Xxx Xxxxx and the United States intend to execute a separate civil settlement agreement.
Xxx Xxxxx waives any and all defenses and objections in this matter or in that civil proceeding
which might be available under the Double Jeopardy and Excessive Fines clauses of the Eighth
Amendment. The parties agree that, in light of the separate civil settlement agreement, and to
avoid unduly complicating and prolonging the sentencing process, the appropriate disposition of
this case does not include a restitution order.
4. Xxx Xxxxx waives any claim under the Hyde Amendment, 18 U.S.C.
§ 3006A (Statutory Note), for attorney’s fees and other litigation expenses arising out of
the investigation or prosecution of this matter.
5. Xxx Xxxxx understands, agrees and has had explained to it by counsel that the Court may
impose the following statutory maximum sentence: a fine of $200,000, or twice the gross gain or
gross loss, whichever is greater; a special assessment of $125; restitution as ordered by the
Court; and a five-year term of Court supervision; in addition, forfeiture may be ordered. Xxx Xxxxx
further understands that the terms and conditions of any Court supervision may be changed, and
extended, by the Court if Xxx Xxxxx violates any of the terms and conditions of that supervision.
6. With respect to Xxx Xxxxx’x conduct:
| A. | The parties stipulate to the following facts and basis for the plea, criminal fine and forfeiture: |
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| (1) | Xxx Xxxxx marketed Zyprexa, which was a drug within the meaning of 21 U.S.C. § 321(g)(1). | ||
| (2) | Shipments of a drug in interstate commerce must be accompanied by labeling bearing adequate directions for use for each of the drug’s intended uses. | ||
| (3) | In September 1996, Zyprexa was approved by FDA for the short term management of the manifestations of psychotic disorders. In March 2000, FDA approved the addition of the subheading “schizophrenia” to the short term management of the manifestations of psychotic disorders. Also in March 2000, FDA approved Zyprexa for the short-term treatment of acute manic episodes associated with Bipolar I Disorder. In November 2000, FDA approved new labeling for Zyprexa for the short term treatment of schizophrenia in place of the management of the manifestations of psychotic disorders. Also in November 2000, FDA approved Zyprexa for maintaining treatment response in schizophrenic patients who had been stable for approximately eight weeks and were then followed for a period of up to eight months. | ||
| (4) | Between September 1999 and March 31, 2001, Xxx Xxxxx promoted Zyprexa in elderly populations as treatment for |
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| dementia, including Alzheimer’s dementia. Zyprexa is not approved by the FDA for treatment of dementia or Alzheimer’s dementia. Xxx Xxxxx’x promotion of Zyprexa for these additional intended uses violated 21 U.S.C. § 352(f)(1), because Zyprexa’s labeling did not bear adequate directions for each of the drug’s intended uses. |
| B. | The United States contends that, as a matter of relevant conduct, the conduct which forms the basis for this plea agreement, as set forth in subsection (A) above, continued past March 31, 2001. Xxx Xxxxx does not admit that this conduct extended past March 31, 2001. |
7. Xxx Xxxxx and the United States retain the right to withdraw from this guilty plea
agreement, and this plea agreement will be null and void, if the civil settlement agreement and
Corporate Integrity Agreement are not executed prior to the filing of the Information.
8. Except as provided herein, the United States agrees that, other than the charges in the
Information in this case, it will not bring any other criminal charges against Xxx Xxxxx, its
present and former parents, affiliates, divisions, and subsidiaries; their predecessors, successors
and assigns for conduct which (A) falls within the scope of the criminal investigation in the
Eastern District of Pennsylvania relating to Xxx Xxxxx’x drug Zyprexa; or (B) was known to the
United States Attorney’s Office for the Eastern District of Pennsylvania or the Office of Consumer
Litigation of the Department of Justice as of the date of the execution of this plea agreement, and
which concerned the sale, promotion, or marketing of Zyprexa in the United
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States. The non-prosecution provisions of this paragraph are binding on the Office of the United
States Attorney for the Eastern District of Pennsylvania, the Office of Consumer Litigation of the
Department of Justice, and the United States Attorney’s Offices for each of the other 93 judicial
districts of the United States. The non-prosecution provisions are also binding on the Criminal
Division of the United States Department of Justice, except that the investigation of Xxx Xxxxx and
its affiliates, divisions, and subsidiaries, being conducted by the Fraud Section of the Criminal
Division regarding possible violations of the Foreign Corrupt Practices Act and related offenses in
connection with the sales and marketing of Xxx Xxxxx’x products to foreign customers is
specifically excluded from the non-prosecution provisions and release provided by this paragraph
and agreement. Attached as Exhibit B is a copy of the letter to Acting United States Attorney
Xxxxxx Xxxxx from the Assistant Attorney General, Criminal Division, Department of Justice,
authorizing this agreement.
9. Xxx Xxxxx understands that this guilty plea agreement does not bind any other government
agency, or any component of the Department of Justice except as specified in paragraph 8 of this
guilty plea agreement. Further, Xxx Xxxxx understands that the United States takes no position as
to the proper tax treatment of any of the payments made by Xxx Xxxxx pursuant to this plea
agreement, the civil settlement agreement, or the Corporate Integrity Agreement referenced in this
plea agreement.
10. Xxx Xxxxx agrees to waive the statute of limitations, and any other time-related defense,
to the charge to which it is agreeing to plead guilty under this plea agreement, provided that the
guilty plea is accepted by the Court.
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11. Xxx Xxxxx understands and agrees that, should it withdraw its plea or if Xxx Xxxxx’x
guilty plea is not accepted by the Court for whatever reason, Xxx Xxxxx may thereafter be
prosecuted for any criminal violation of which the United States has knowledge arising out of this
investigation, notwithstanding the expiration of any applicable statute of limitations between the
time period when Xxx Xxxxx signed this plea agreement and either Xxx Xxxxx’x withdrawal of its plea
or the Court’s rejection of its plea. In that event, Xxx Xxxxx agrees that it will not raise the
expiration of any statute of limitations as a defense to any such prosecution, except to the extent
that the statute of limitations would have been a defense pursuant to the terms of a Tolling
Agreement between the parties effective October 7, 2008, all subsequent extensions of the Tolling
Agreement, and this paragraph.
12. In exchange for the undertakings made by the government in entering this plea agreement,
Xxx Xxxxx voluntarily and expressly waives all rights to appeal or collaterally attack the
defendant’s conviction, sentence, or any other matter relating to this prosecution, whether such a
right to appeal or collateral attack arises under 18 U.S.C. § 3742, 28 U.S.C.
§ 1291, 28 U.S.C. § 2255, or any other provision of law. This waiver is not intended to bar the
assertion of constitutional claims that the relevant case law holds cannot be waived.
13. Xxx Xxxxx also waives all rights, whether asserted directly or by a
representative, to request or receive from any department or agency of the United States any
records pertaining to the investigation or prosecution of this case, including without
limitation any records that may be sought under the Freedom of Information Act, 5 U.S.C. § 552, or the
Privacy Act, 5 U.S.C. § 552a.
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14. Xxx Xxxxx is satisfied with the legal representation provided by its lawyers; Xxx Xxxxx
and its lawyers have fully discussed this guilty plea agreement; and Xxx Xxxxx is agreeing to plead
guilty because Xxx Xxxxx admits that it is guilty of the misdemeanor described in paragraph 1.
15. Xxx Xxxxx will acknowledge acceptance of this guilty plea agreement by the signature of
its counsel and of an authorized corporate officer. Xxx Xxxxx shall provide to the government for
attachment as Exhibit C to this plea agreement a notarized resolution by Xxx Xxxxx’x Board of
Directors authorizing the corporation to enter a plea of guilty, and authorizing a corporate
officer to execute this agreement.
16. If acceptable to the Court, the parties agree to waive the presentence investigation and
report pursuant to Rule 32(c)(1) of the Federal Rules of Criminal Procedure, and ask that Xxx Xxxxx
be sentenced at the time the guilty plea is entered.
17. It is agreed that the parties’ guilty plea agreement contains no additional promises,
agreements or understandings other than those set forth in this written guilty plea agreement, and
that no additional promises, agreements or understandings will be entered into unless in writing
and signed by all parties.
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SIGNATURES FOR THE UNITED STATES
XXXXXXX X. XXXXXX
Assistant Attorney General
Civil Division
United States Department of Justice
Assistant Attorney General
Civil Division
United States Department of Justice
/s/ Xxxxxx X. Xxxxxxx |
/s/ Xxxxxx Xxxxx | |||||
XXXXXX X. XXXXXXX
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XXXXXX XXXXX | |||||
Director, Office of Consumer Litigation |
Acting United States Attorney | |||||
United States Department of Justice |
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/s/ Xxxxxxx X. Xxxxxx |
/s/ Xxxxx Xxxx Xxxxx | |||||
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XXXXXXX X. XXXXXX |
XXXXX XXXX XXXXX | |||||
Trial Attorney
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Chief, Criminal Division | |||||
Office of Consumer Litigation
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Assistant United States Attorney | |||||
United States Department of Justice |
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/s/ Xxxx X. Xxxxxxxxx
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/s/ Xxxxxxxxx Xxxxx | |||||
XXXX X. XXXXXXXXX
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XXXXXXXXX XXXXX | |||||
Trial Attorney
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Assistant United States Attorney | |||||
Office of Consumer Litigation |
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United States Department of Justice |
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| /s/ Xxxxxxx X. May | ||||||
| XXXXXXX X. MAY Assistant United States Attorney |
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DATE: 1-14-09
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/s/ Xxxxxx X. Xxxx | |||||
| XXXXXX X. XXXX Assistant United States Attorney |
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SIGNATURE FOR XXX XXXXX
DATE: 14 Jan. 2009 |
/s/ Xxxxxx X. Xxxxxxxx | |||||
| XXXXXX X. XXXXXXXX | ||||||
| Senior Vice President and General Counsel | ||||||
| Xxx Xxxxx and Company |
SIGNATURES OF XXX XXXXX’X ATTORNEYS
DATE: 1/14/09
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/s/ Xxxx X. Xxxxxxx | |||||
| XXXX X. XXXXXXX | ||||||
| Xxxxxx Xxxxxxxx LLP | ||||||
| Counsel for Defendant | ||||||
DATE: 1/14/09
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/s/ Xxxxxx X. Xxxxxxxxx | |||||
| XXXXXX X. XXXXXXXXX | ||||||
| Xxxxxx Xxxxxxxx LLP | ||||||
| Counsel for Defendant | ||||||
DATE: 1/14/09
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/s/ Xxxx X. Xxxx | |||||
| XXXX X. XXXX | ||||||
| Sidley Austin LLP | ||||||
| Counsel for Defendant | ||||||
DATE: 1/14/09
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/s/ Xxxxxxxx X. Xxxxxxxx | |||||
| XXXXXXXX X. XXXXXXXX | ||||||
| Sidley Austin LLP | ||||||
| Counsel for Defendant |
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Exhibit A
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
UNITED STATES OF AMERICA
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v. |
: | CRIMINAL NO. | ||
XXX XXXXX AND COMPANY |
: |
ACKNOWLEDGMENT OF RIGHTS
Xxx Xxxxx and Company (“Xxx Xxxxx”), through its properly authorized officer, hereby
acknowledges that it has certain rights that it will be giving up by pleading guilty.
| 1. | Xxx Xxxxx understands that it does not have to plead guilty. | ||
| 2. | Xxx Xxxxx may plead not guilty and insist upon a trial. | ||
| 3. | At that trial, Xxx Xxxxx understands: |
| a. | that Xxx Xxxxx would have the right to be tried by a jury that would be selected from the Eastern District of Pennsylvania and that along with its attorney, Xxx Xxxxx would have the right to participate in the selection of that jury; | ||
| b. | that the jury could only convict Xxx Xxxxx if all twelve jurors agreed that they were convinced of Xxx Xxxxx’x guilt beyond a reasonable doubt; | ||
| c. | that the government would have the burden of proving Xxx Xxxxx’x guilt beyond a reasonable doubt and that Xxx Xxxxx would not have to prove anything; | ||
| d. | that Xxx Xxxxx would be presumed innocent unless and until such time as the jury was convinced beyond a reasonable doubt that the government had proven that Xxx Xxxxx was guilty; | ||
| e. | that Xxx Xxxxx would have the right to be represented by a lawyer at this trial and at any appeal following the trial, and that if Xxx Xxxxx could not afford to hire a lawyer, the court would appoint one for Xxx Xxxxx free of charge; | ||
| f. | that through Xxx Xxxxx’x lawyer Xxx Xxxxx would have the right to confront and cross-examine the witnesses against Xxx Xxxxx; |
| g. | that Xxx Xxxxx could call witnesses to testify in its defense if Xxx Xxxxx wanted to, and Xxx Xxxxx could subpoena witnesses for this purpose if Xxx Xxxxx wanted to; and | ||
| h. | that Xxx Xxxxx would not have to call witnesses to testify or otherwise present any defense if Xxx Xxxxx did not want to, and that if Xxx Xxxxx did not present any evidence, the jury could not hold that against Xxx Xxxxx. |
| 4. | Xxx Xxxxx understands that if Xxx Xxxxx pleaded guilty, there will be no trial and Xxx Xxxxx would be giving up all of the rights listed above, as well as any other rights associated with the trial process arising under statute, common-law, or judicial precedent. | ||
| 5. | Xxx Xxxxx understands that if Xxx Xxxxx decides to enter a plea of guilty, the judge will ask Xxx Xxxxx representatives questions under oath, and that if any of those representatives lie on behalf of Xxx Xxxxx in answering those questions, those persons could be prosecuted for the crime of perjury, that is, for lying under oath. | ||
| 6. | Xxx Xxxxx understands that if Xxx Xxxxx pleads guilty, Xxx Xxxxx has waived its right to appeal, except as set forth in appellate waiver provisions of the plea agreement. | ||
| 7. | Understanding that Xxx Xxxxx has all these rights and that by pleading guilty Xxx Xxxxx is giving them up, Xxx Xxxxx still wishes to plead guilty. |
/s/ Xxxxxx X. Xxxxxxxx |
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Senior Vice President and General Counsel |
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Xxx Xxxxx and Company |
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/s/ Xxxx X. Xxxx |
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Sidley Austin LLP |
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Counsel for Defendant |
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Exhibit B
| U.S. Department of Justice | ||
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Criminal Division | |
Acting Assistant Attorney General
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Washington, D.C. 20530 | |
| JAN 9 2009 |
The Xxxxxxxxx Xxxxxx Xxxxx
Acting United States Attorney
Eastern District of Pennsylvania
Philadelphia, Pennsylvania 19106
Acting United States Attorney
Eastern District of Pennsylvania
Philadelphia, Pennsylvania 19106
Attention:
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Xxxxxxxxx Xxxxx | |
| Assistant United States Attorney | ||
Re:
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Global Non-prosecution Agreement for Xxx Xxxxx and Company |
Dear Xx. Xxxxx:
This is in response to your request for authorization to enter into a global case disposition
agreement with the business entity known as Xxx Xxxxx and Company.
I hereby approve the terms of the Plea Agreement, including Paragraph 8, in which the
United States Attorney’s Offices and the Criminal Division of the Department of Justice agree
not to initiate further criminal prosecutions as set out therein.
You are authorized to make this approval a matter of record in this proceeding.
| Sincerely, | ||
| Xxxxxxx X. Xxxxxxxxx | ||
| Acting Assistant Attorney General |
| /s/ Xxxx X. Xxxxxx | ||||
| Xxxx X. Xxxxxx | ||||
| Deputy Assistant Attorney General Criminal Division |
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