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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 16, 1998
SCHEIN PHARMACEUTICAL, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-14019 11-2726505
------------------------ ---------------------------------
(Commission File Number) (IRS Employer Identification No.)
100 Campus Drive
Florham Park, New Jersey 07932
(Address of principal executive offices)
(973) 593-5500
--------------------------------------------------
(Registrant's telephone number, including area code)
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Inapplicable
- - -------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 5. OTHER EVENTS.
On October 16, 1998, Schein Pharmaceutical, Inc. ("Schein") announced in a press
release that its Phoenix-based subsidiary Steris Laboratories, Inc. expects to
resume manufacturing and distributing certain drugs, including Schein's branded
prodcut INFeD(R), under a consent agreement reached with the Food and Drug
Administration (FDA). This agreement was executed and filed in the United States
District Court of Arizona on October 21, 1998. Additionally, Schein announced it
expects to take a one-time after tax charge of approximately $135 million in
1998, the majority of which is for the write-off of goodwill.
A copy of the press release and consent agreement referred to above is attached
to this Form 8-K as an Exhibit and is incorporated herein by reference.
Certain of the matters discussed in this Current Report on Form 8-K and in the
press releases attached as exhibits hereto contain statements concerning future
events or results. These "forward looking" statements involve certain
significant risks and uncertainties, and actual results may differ materially
from the forward-looking statements. Some important factors which may cause
results to differ include: the uncertainty and difficulty of predicting FDA
approvals, uncertainties associated with the implementation of the terms and
conditions of the consent decree affecting the Steris facility, the uncertainty
of acceptance and demand for the Company's new products, the impact of
competitive products and pricing, the availiability of raw materials,
uncertainties associated with litigation and regulatory matters, and
fluctuations in operating results. Other important factors that may cause actual
results to differ materially from the forward looking statements are discussed
in the "Risk Factors" and "Management's Discussion & Analysis of Financial
Condition and Results of Operations" sections of the Company's prospectus dated
April 8, 1998, which is on file with the Securities and Exchange Commission as
part of the Company's Registration Statement on Form S-1. Readers are urged to
read the prospectus carefully to better understand these factors. The Company
does not undertake to publicly update or revise any of its forward looking
statements even if experience or future changes show that the indicated results
or events will not be realized.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(C) EXHIBITS
99.1 Press Release dated October 16, 1998.
99.2 Consent Decree executed and filed in the United States
District Court, District of Arizona on October 21, 1998
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
SCHEIN PHARMACEUTICAL, INC.
Dated: October 27, 1998 By: DARIUSH ASHRAFI
--------------------------
Dariush Ashrafi
Executive Vice President and
Chief Financial Officer
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
- - -------------- ------------
99.1 Press Release dated October 16, 1998.
99.2 Consent Decree executed and filed in the United States
District Court, District of Arizona on October 21, 1998
Schein Pharmaceutical, Inc.
100 Campus Drive
Florham Park, NJ 07932
Tel. 973 593-5500
Fax 973 593-5598
PRESS RELEASE
Contact: Melody A. Carey, Investor Relations
Telephone: (973) 593-5535
Fax: (973) 593-5598
FOR IMMEDIATE RELEASE
- --------------------------------------------------------------------------------
Schein Pharmaceutical Subsidiary Reaches Consent Agreement
-INFeD(R) Distribution and Selected Product Manufacturing at Steris to Resume-
Florham Park, New Jersey - October 16, 1998 - Schein Pharmaceutical, Inc. (NYSE:
SHP) announced that its Phoenix-based subsidiary Steris Laboratories, Inc. will
resume manufacturing and distributing certain drugs, including Schein's branded
product INFeD(R), under a consent agreement reached this evening with the Food
and Drug Administration (FDA). This agreement is subject to court approval,
which is expected soon. Additionally, Schein expects to take a one-time after
tax charge of approximately $135 million in 1998, the majority of which is for
the write-off of goodwill.
"As a result of the agreement reached, we expect to resume shipping INFeD(R) to
our customers shortly," said Martin Sperber, Schein's chairman and chief
executive officer. "A principal focus of the Company in these negotiations has
been to return certain products that are particularly important to the medical
community, including INFeD(R), to the market as soon as possible. Based on past
usage patterns, with the INFeD(R) inventory on hand and the resumption of
INFeD(R) manufacturing in the coming weeks, we expect to have sufficient product
to meet patients' needs."
Under the consent agreement, Steris is required to demonstrate, through
independent expert certification, that its processes, programs and controls
comply with current Good Manufacturing Practices (cGMP) regulations. The consent
agreement also provides for independent certification of Steris' management
controls, quality assurance and quality control programs, and employee cGMP
training. Steris will develop a timeline for implementing these actions and for
expert certification with respect to matters covered in previous FDA inspections
of the facility.
As a result of the negotiated consent agreement, Steris has divided its product
line into three categories: products that it will seek to manufacture under
expedited certification procedures, products that it will seek to manufacture
once it satisfies all conditions under the consent agreement, and products it
currently has decided not to manufacture.
(more)
<PAGE>
Page 2
Expedited certification procedures apply for certain products that are
particularly important to the medical community because they are primarily or
exclusively available from Schein or that are significant to the Company, such
as Vecuronium. Steris intends to resume production of INFeD(R) in the coming
weeks and other products starting in the first quarter of 1999.
During the next 30 days, Steris will continue and expand the records review and
product-testing program it initiated earlier this year, which includes oversight
by independent expert consultants. Based on the findings of this program to date
and other commitments under the consent agreement, Steris is initiating a number
of recalls and will institute other recalls, if warranted.
"We believe there are no safety issues associated with the products being
recalled," stated Mr. Sperber.
Additionally, Steris will voluntarily destroy certain inventory that the FDA had
seized. While the Company believes that all its products are safe, the time
required to demonstrate the cGMP compliance status of certain of the seized
products would have delayed the production of INFeD(R) and other significant
products.
"Our decision to destroy certain seized products was a financial one. As we
always have, we stand firmly behind the quality and safety of our products in
the marketplace," said Mr. Sperber. "We chose to focus our resources on resuming
manufacturing and the review and testing programs for INFeD(R), Vecuronium and
other important products."
As a result of these actions, work force reductions, the consolidation of
distribution operations, and other cost containment steps the Company is
considering, Schein expects to record a one-time charge in 1998 of approximately
$135 million, predominantly in the third quarter, with an expected tax benefit
of $26 million. The charge includes the non-cash write-off of goodwill,
inventory, and impaired fixed assets, which is approximately $132 million
pre-tax, and the accrual of severance related to workforce reductions, other
Steris costs, and costs associated with product recalls, estimated to be $29
million.
"The products that we have decided not to manufacture in the near term
contributed approximately $65 million in revenue during the 12 months ended June
1998. As we resume broader manufacturing, we will consider the reintroduction of
certain of these products and anticipate the approval of new products to reduce
the impact of this revenue loss," said Dariush Ashrafi, Schein's executive vice
president and chief financial officer. "Additionally, cost savings achieved
through significant streamlining of our operations, which is already under way,
is expected to partially offset the impact to operating income from this lost
revenue."
(more)
<PAGE>
Page 3
Schein Pharmaceutical is one of the leading generic pharmaceutical companies in
the United States. The Company develops manufactures and markets a broad generic
product line through the integration of its product development expertise,
diverse, high-volume production capacity and direct sales and marketing force.
The Schein product line includes both solid dosage and sterile dosage generic
products, and the Company is also developing a line of specialty branded
pharmaceuticals. The Company's branded product, INFeD(R), is the leading
injectable iron product in the United States. The Company has a substantial
pipeline of products under development. The Company enhances its internal
product development, manufacturing and marketing capabilities through strategic
collaborations. Schein operates four other manufacturing facilities in
Connecticut, New Jersey, New York and Puerto Rico.
Certain of the matters discussed in this press release contain statements
concerning future events or results. These "forward looking" statements involve
certain significant risks and uncertainties, and actual results may differ
materially from the forward looking statements. Some important factors which may
cause results to differ include: the uncertainty and the difficulty of
predicting FDA approvals, uncertainties associated with the implementation of
the terms and conditions of the consent decree affecting the Steris facility,
the uncertainty of acceptance and demand for the Company's new products, the
impact of competitive products and pricing, the availability of raw materials,
uncertainties associated with litigation and regulatory matters, and
fluctuations in operating results. Other important factors that may cause actual
results to differ materially from the forward looking statements are discussed
in the "Risk Factors" and "Management's Discussion & Analysis of Financial
Condition and Results of Operations" sections of the Company's prospectus dated
April 8, 1998, which is on file with the Securities and Exchange Commission as
part of the Company's Registration Statement on Form S-1. Readers are urged to
read the prospectus carefully to better understand these factors. The Company
does not undertake to publicly update or revise any of its forward looking
statements even if experience or future changes show that the indicated results
or events will not be realized.
# # #
Editor's note: This release is available on the Internet at
http://www.schein-rx.com
JOSE DE JESUS RIVERA
United States Attorney
District of Arizona
LISA E. JENNIS
Assistant U.S. Attorney
4000 U.S. Courthouse
230 North First Avenue
Phoenix, Arizona 85025
Telephone (602) 514-7500
IN THE UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
UNITED STATES OF AMERICA, )
)
Plaintiff, )
)
v. )
)
1. ALL DRUGS INCLUDING, BUT NOT ) CIV 98-1630 PHX RGS
LIMITED TO, INPROCESS DRUG PRODUCTS)
AND COMPONENTS DETERMINED TO HAVE ) (Consolidated with
ORIGINATED OUTSIDE OF THE STATE OF ) 98 Civ. 6386 (CSH)
ARIZONA LOCATED AT STERIS ) (SDNY))
LABORATORIES, INC., 620 NORTH 51ST )
AVE., PHOENIX, ARIZONA, )
)
2. ALL DRUGS PACKAGED IN VARIOUS )
CONTAINERS, INCLUDING VIALS, BOXES,)
AND CASES, LABELED OR UNLABELED, )
AND DETERMINED BY RECORDS, OR )
OTHERWISE, TO HAVE BEEN )
MANUFACTURED BY STERIS )
LABORATORIES, INC., 620 NORTH 51ST )
AVENUE, PHOENIX, ARIZONA LOCATED )
AT SCHEIN PHARMACEUTICAL, INC., )
1825 SOUTH 43RD AVE., PHOENIX, )
ARIZONA, )
)
Defendants. )
)
- -----------------------------------)
)
UNITED STATES OF AMERICA, )
)
Plaintiff, )
)
v. )
)
VARIOUS ARTICLES OF DRUG, INCLUDING)
BUT NOT LIMITED TO, INJECTABLE )
VITAMIN PRODUCTS, PACKAGED IN )
<PAGE>
VARIOUS CONTAINERS, INCLUDING )
BOTTLES, BOXES, AND CASES LABELED )
WITH, AMONG OTHER THINGS, THE )
IDENTITY OF THE ARTICLE, AND )
DETERMINED BY RECORDS, OR )
OTHERWISE, TO HAVE BEEN )
MANUFACTURED BY STERIS )
LABORATORIES, INC., 620 N. 51ST )
AVENUE, PHOENIX, ARIZONA, AND WHICH)
ARE LOCATED AT SCHEIN )
PHARMACEUTICAL, INC., MOUNT EBO )
DRIVE SOUTH, ROUTE 22, BREWSTER, )
NEW YORK, )
)
Defendants-in-rem. )
)
- -----------------------------------)
UNITED STATES OF AMERICA, )
)
Plaintiff, )
)
22. )
)
STERIS LABORATORIES, INC., a )
corporation, and JAVIER )
CAYADO, ROBERT CASTELLUCCI, and )
ROBERT DEPHILLIPS, individuals, )
)
Defendants. )
- -----------------------------------)
CONSENT DECREE OF
CONDEMNATION AND PERMANENT INJUNCTION
-------------------------------------
WHEREAS, plaintiff United States of America ("Plaintiff" or the "United
States"), on behalf of the United States Food and Drug Administration ("FDA"),
has filed a verified complaint for forfeiture in this Court bearing the docket
number CIV 98-1630-PHX-RGS (the "Arizona action") and has filed a verified
complaint for forfeiture in the Southern District of New York bearing the docket
number 98 Civ. 6386 (CSH)(the "New York action") against the above-described
articles of drug, alleging that the drugs are adulterated within the meaning of
the Federal Food, Drug, and Cosmetic Act (the "FFDC Act"), 21 U.S.C. '
35l(a)(2)(B), while
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such drugs are held for sale after shipment in interstate commerce, or after
shipment of one or more of their components in interstate commerce, in that the
methods used in, and the facilities and controls used for, their manufacture,
processing, packing, and holding do not conform to and are not operated and
administered in conformity with current good manufacturing practice ("GMP") to
assure that such drugs meet the safety requirements of the FFDC Act and have the
identity and strength, and meet the quality and purity characteristics, which
they purport and are represented to possess (collectively, the in rem
actions); and
WHEREAS, the United States Marshal for this District and the United
States Marshal for the Southern District of New York have seized the articles of
drug (the "Seized Drugs") pursuant to warrants of arrest in rem issued by this
Court and by the United States Court for the Southern District of New York; and
WHEREAS, the United States has served potential claimants and has
caused notice of the complaints and seizures to be published in accordance with
the requirements of the Supplemental Rules for Certain Admiralty and Maritime
Claims; and
WHEREAS, Steris Laboratories, Inc. ("Steris") affirms that it is the
sole owner of the Seized Drugs and agrees to hold the United States harmless
should any party or parties hereafter file or seek to file a claim to intervene
in this action, or seek to defend or obtain any part of the Seized Drugs; and
WHEREAS, Steris has intervened and filed claims in each
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<PAGE>
action to certain of the Seized Drugs (the "Claimed Drugs"); and
WHEREAS, Steris and the United States have agreed to transfer
the New York action to this Court and consolidate the New York action with this
action pursuant to 21 U.S.C. ' 334(b); and
WHEREAS, the United States has filed an amended complaint
consolidating the in rem actions in this District and adding claims against
Steris and against individual defendants Javier Cayado, President of Steris;
Robert Castellucci, Acting Vice President, Quality Operations for Steris (who
assumed that position in September 1998); and Robert DePhillips, Vice President,
Manufacturing for Steris (Steris and the individuals are collectively
"Defendants"), seeking permanent injunctive relief pursuant to the FFDC Act, 21
U.S.C. " 301 et seq.; and
WHEREAS, Defendants, solely for the purpose of settling the
consolidated in rem actions and for no other purpose, have appeared and, before
any testimony has been taken, consented to the entry of this Consent Decree,
without admitting any of the allegations in the amended complaint or the in rem
forfeiture complaints, and disclaiming any liability in connection therewith,
and denying that the Seized Drugs are adulterated within the meaning of 21
U.S.C. ' 351(a)(2)(B); and
WHEREAS, for the purposes of this agreement, the following
exhibits have been created: Exhibit A: Drugs that Defendants want to continue
manufacturing after compliance with the provisions of paragraph 19;
Exhibit B: Drugs for which Defendants will either request
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<PAGE>
withdrawal of drug marketing application approvals or reserve the option to
propose resumption of manufacturing pursuant to the validation and certification
procedures set forth in paragraph 19;
Exhibit C: Drugs that FDA has determined to be medically necessary;
Exhibit D: Drugs that may be validated under the accelerated procedures of
paragraph 21.
THEREFORE, IT IS ORDERED, ADJUDGED, AND DECREED that:
I. JURISDICTION
-------------
1. Defendants consent to this Court's exercise of subject
matter jurisdiction over this action and personal jurisdiction over all parties
pursuant to 28 U.S.C. ' 1345 and 21 U.S.C. " 332 and 334. Venue is proper in
this District under 28 U.S.C. ' 1391(b), 1391(c), and 1395.
2. The amended complaint states a claim for relief under the FFDC Act.
II. THE SEIZED DRUGS
----------------
3. The Claimed Drugs are drugs that are adulterated within the meaning
of 21 U.S.C. ' 351(a)(2)(B), while held for sale after shipment in interstate
commerce, or after shipment of one or more of their components in interstate
commerce, in that the methods used in, and the facilities and controls used for,
their manufacture, processing, packing, and holding do not conform to and are
not operated and administered in conformity with GMP.
4. The Claimed Drugs are hereby condemned and forfeited to the
United States pursuant to 21 U.S.C. ' 334(a).
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<PAGE>
5. The United States shall recover from Steris all court costs, fees,
and storage and other proper expenses, and such further costs for which Steris
is liable pursuant to 21 U.S.C. ' 334(e) with respect to the Seized Drugs.
Steris shall pay these costs within twenty (20) days of the entry of this
Consent Decree or of receiving notice from the FDA of such costs.
6. Within twenty (20) days of the entry of this Consent Decree, Steris
shall execute and file with the Clerk of this Court a good and sufficient penal
bond with surety in the amount of $6,000,000.00 to be applied to each
$5,000,000.00 of Claimed Drugs and held for application to later released
Claimed Drugs after each $5,000,000.00 worth of drugs has been reconditioned and
released pursuant to this Decree. The bond shall be in a form acceptable to the
Clerk of this Court and payable to the United States of America, and conditioned
on Steris's abiding by and performing all of the terms and conditions of this
Consent Decree and of such further orders and decrees as many be entered in this
proceeding relating to the Claimed Drugs.
7. After the filing of the penal bond with this Court, Steris shall
give written notice to the District Director of the Los Angeles District Office,
United States Food and Drug Administration, Department of Health and Human
Services, 19900 Mac Arthur Blvd., Suite 300, Irvine, CA, 92612-2445, or
alternate address as designated by the Los Angeles District Director ("the Los
Angeles District Director") that Steris, at its own expense, is prepared to
attempt to bring the Claimed Drugs into compliance
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<PAGE>
with the law under the supervision of FDA and shall submit a written statement
detailing the proposed reconditioning process (the "Reconditioning Plan") within
thirty (30) days of entry of this Consent Decree. Notwithstanding the foregoing,
Steris may request immediate release without bond of limited quantities of
specified drug components for use in the development and validation of test
methods. The request may be made to the Los Angeles District Director, who shall
notify the appropriate United States Marshal to release such drugs to Steris, in
amounts adequate for use in method development and validation. Such release
and/or testing shall be conducted under FDA supervision, at FDA's option, or the
supervision of the experts appointed pursuant to this Consent Decree.
8. Except as noted below, if Steris submits a proposed Reconditioning
Plan, FDA shall respond in writing within thirty (30) days to notify Steris as
to whether the Reconditioning Plan is acceptable. If the Reconditioning Plan is
acceptable as to certain of the Claimed Drugs and not others, FDA shall specify
those drugs for which the Reconditioning Plan is acceptable. If FDA notifies
Steris in writing that some or all of the Reconditioning Plan is unacceptable,
FDA shall state with particularity the reasons for such determination. Steris
shall then submit, within thirty (30) days of receipt of FDA's letter, a revised
Reconditioning Plan for those drugs for which the initial plan was unacceptable.
If Steris has not submitted a revised Reconditioning Plan within thirty (30)
days of receipt of FDA's letter, or if FDA finds that the revised Reconditioning
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<PAGE>
Plan is unacceptable, FDA shall give written notice to Steris, and Steris shall
cause that portion of the Claimed Drugs for which no revised Reconditioning Plan
was submitted or for which the revised Reconditioning Plan was unacceptable to
be destroyed under FDA supervision and at Steris's expense. All destruction
under this Decree shall be in a manner that complies with the requirements of
the National Environmental Policy Act of 1969 and any other applicable law.
Notwithstanding the foregoing, (a) submission and approval of a Reconditioning
Plan is not a prerequisite to release under paragraph 7 of the materials
necessary for development and validation of test methods, the conduct of media
fills, the requalification of equipment and cleaning procedures, and the
performance of tests necessary to completion of open investigations; and (b) any
Reconditioning Plan for drugs listed in Exhibit C shall be reviewed
expeditiously.
9. Steris shall not attempt to bring the Claimed Drugs into compliance
with the FFDC Act until Steris has submitted a Reconditioning Plan to FDA and
has received from FDA written authorization to commence reconditioning.
10. Following Steris's receipt of written authorization to commence
reconditioning as described in paragraph 8, and following payment by Steris of
the costs as described in paragraph 5 of this Decree, the United States Marshal
for this District and the United States Marshal for the Southern District of New
York shall, upon receiving written notice from FDA, return the Claimed Drugs
that are specified in FDA's notice to the
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<PAGE>
custody of Defendants for the sole purpose of attempting to bring the Claimed
Drugs into compliance with the FFDC Act pursuant to the approved Reconditioning
Plan.
11. Defendants shall, at all times, until the Seized Drugs have been
released in writing by FDA for shipment, sale, destruction, or other
disposition, retain intact each lot of Seized Drugs for examination or
inspection by FDA, in a place made known to and approved by FDA, and shall
maintain the records or other proof necessary to establish the identity of the
Seized Drugs to the satisfaction of FDA.
12. Steris shall at no time, and under no circumstances whatsoever,
ship, sell, offer for sale, or otherwise dispose of any part of the Claimed
Drugs until they are reconditioned in accordance with an approved Reconditioning
Plan and: (a) FDA has had free access to the Claimed Drugs in order to take any
samples or make any tests or examinations that it deems necessary; and (b) FDA
has released, in writing, the Claimed Drugs for shipment, sale, or other
disposition.
13. The Reconditioning Plan shall specify the time frame(s) by which
proposed reconditioning shall be completed. After receiving written notification
from FDA that a Reconditioning Plan for some or all of the Claimed Drugs is
acceptable, Steris shall at its own expense complete the process of attempting
to bring the drugs covered by such plan into compliance with the FFDC Act under
the supervision of FDA to the extent FDA deems necessary. If Steris does not
complete reconditioning in a timely manner with respect to certain drugs, FDA
shall give
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<PAGE>
written notice to Steris and, unless the time for reconditioning is extended by
FDA or otherwise, including extensions granted under paragraph 33, Steris shall
cause those drugs to be destroyed under FDA supervision.
14. Because FDA recognizes that there is a public need for certain
medically necessary drugs that are not available from other sources, certain
lots of drugs listed in Exhibit C of the Seized Drugs may be released and
reconditioned for distribution to the public. Steris shall identify for FDA the
lots of drugs listed in Exhibit C that are among the Seized Drugs and specify
the dates of manufacture. FDA shall specify the drugs to be released, and
Defendants shall submit to FDA as soon as possible but, in any event, within ten
(10) days of the entry of this Consent Decree, proposals for reconditioning such
drugs or such other forms of assurance of product quality and safety as FDA
deems appropriate, such as batch records, analytical results review, and
additional analytical testing. Steris shall submit a time line with its
proposal. FDA shall promptly review each proposal and time line, and notify
Steris whether they are satisfactory. Upon receiving written notice from FDA,
the United States Marshals for this District and for the Southern District of
New York shall return the specified drugs to the custody of Defendants for the
sole purpose of reconditioning the drugs in accordance with this Consent Decree
and any further agreement between the parties. FDA may conduct an inspection
during or after such reconditioning, and request data summaries and reports. No
product shall be distributed under this paragraph
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<PAGE>
without FDA's prior written approval.
15. To the extent Steris has not claimed portions of the Seized Drugs,
and they are not otherwise released as medically necessary drugs pursuant to
paragraph 14, Steris shall cause those portions of the Seized Drugs to be
promptly destroyed at Steris's expense under FDA supervision. Upon receiving
written notice from FDA, the United States Marshals for this District and for
the Southern District of New York shall return such drugs to the custody of
Defendants for the sole purpose of destroying such drugs under FDA supervision.
Steris shall submit a proposed schedule for destruction to FDA.
16. Defendants shall not sell or dispose of the Seized Drugs in a
manner contrary to the provisions of the FFDC Act, or any other federal law, or
the laws of any State or Territory (as defined in the FFDC Act) in which such
drugs are disposed of or sold. If requested by FDA, Steris shall furnish
duplicate copies of invoices of sale of the released drugs, or other evidence of
disposition as FDA may request.
17. The United States Attorney for this District, on being advised by
FDA in writing that the conditions of this Consent Decree relating to the Seized
Drugs have been performed to FDA's satisfaction, shall transmit such information
to the Clerk of this Court, whereupon the bond given in this proceeding shall be
canceled and discharged or reduced as warranted by the extent of performance of
the bond conditions.
18. If Steris fails to abide by and perform all the terms and
conditions of this Consent Decree, or of such further order
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<PAGE>
or decree as may be entered in this proceeding concerning the Claimed Drugs, or
of the bond, then the bond shall, on motion of the United States of America in
this proceeding, be forfeited in its entirety and judgment for condemnation be
entered in favor of Plaintiff.
III. MANUFACTURING AND DISTRIBUTION
------------------------------
19. Defendants and each and all of their officers, agents,
representatives, employees, successors, assigns, attorneys, and any and all
persons in active concert or participation with any of them are hereby
permanently restrained and enjoined from directly or indirectly doing or
causing: (1) the introduction or delivery for introduction into interstate
commerce of articles of drug, as defined by 21 U.S.C. ' 321(g) (hereinafter
referred to as "drug" or "drugs"); and (2) the manufacture, processing, packing,
labeling, or holding of a drug held for sale after shipment of one or more of
its components in interstate commerce, unless and until:
a. The methods used in, and the facilities and controls used for, the
manufacturing, processing, packing, labeling, and holding of drugs are
established, administered, and operated in compliance with GMP as set forth at
21 U.S.C. ' 351(a)(2)(B) and 21 C.F.R. Parts 210 and 211;
b. Defendants retain an independent team of expert consultants
(hereinafter referred to as "experts") that includes persons who, by reason of
training and experience, are qualified to inspect aseptic and sterile
manufacturing and testing
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processes, as well as persons who are qualified microbiologists and chemists
familiar with laboratory methods, analyses, and GMP relating to drug
manufacturing and controls. The experts shall inspect Steris's manufacturing and
laboratory facilities, perform audits, prepare reports, and provide
certifications to FDA in order to ensure that all manufacturing, processing,
packing, labeling, and holding of drugs comply with GMP as set forth in 21
U.S.C. ' 351(a)(2)(B) and 21 C.F.R. Parts 210-211, and all other applicable
provisions of the FFDC Act and regulations promulgated thereto relating to
safety, identity, strength, quality and purity of Steris's products
(collectively, "the FFDC Act and applicable regulations"). More specifically,
the experts shall:
(1) Develop a Corrective Action Plan ("CAP") and a time line
for implementing each corrective action in the CAP. Defendants shall submit a
proposed CAP within thirty (30) days of the entry of the Consent Decree for
FDA's review and approval. FDA will provide its approval or detailed comments in
writing within forty-five (45) days of its receipt of the CAP (or any
modifications thereto). The experts shall provide detailed monthly updates to
FDA on progress toward completion of the CAP;
(2) Prepare a detailed, written report on management controls
at Steris's facilities. This report shall:
(A) describe Steris's current organizational
structure and the specific responsibilities and authority of each manager and
work unit that is involved in manufacturing drugs, and report whether the
managers and work units have sufficient authority and personnel to perform their
responsibilities
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effectively;
(B) assess the role of Steris's Quality
Assurance/Quality Control ("QA/QC") unit, including its role in detecting and
correcting all deficiencies noted on all Forms FD483 issued within the past four
years, the QA/QC unit's compliance with Steris's own Standard Operating
Procedures ("SOPs"), and whether the QA/QC unit has sufficient authority to
implement any necessary corrective actions;
(C) recommend corrective actions necessary to ensure
that there are personnel responsible for directing the manufacture and
control of Steris's drug products that are adequate in number and
qualifications (education, training, and experience, or combination thereof) to
ensure continuous compliance with the FFDC Act and applicable regulations.
These recommendations shall be included in the CAP; and
(D) recommend dates for
completion of all necessary actions that have been and will be taken to
accomplish the steps recommended in the preceding subparagraph. These
recommendations shall be included in the CAP;
(3) Report all instances where the experts have determined
that any of Defendants' information or data (whether orally or in writing,
including, but not limited to raw data, analytical data, reports, memoranda,
and investigations) is inaccurate, false, misleading, incomplete or missing and
either (a) appears to be intended to deceive or mislead or (b) affects whether
drugs in distribution or to be distributed meet specifications and comply with
GMP. These reports must be
-14-
<PAGE>
provided to FDA immediately upon discovery of such data or information or the
lack thereof;
(4) Develop a list of all products in inventory (excluding the
Seized Drugs) and products that have been distributed, but have not expired on
the date this Consent Decree is entered, and specify for each product whether or
not it complies with GMP. Defendants may include in the CAP proposals to attempt
to bring such drugs into compliance with the FFDC Act and applicable
regulations. Defendants may not attempt to bring any drug into compliance until
they have received written authorization from FDA. No drugs in inventory or
otherwise under the control of Defendants on the day this Consent Decree is
entered may be released for introduction into interstate commerce or delivered
for introduction into interstate commerce until FDA authorizes such release in
writing;
(5) Prior to Defendants' manufacture of Dexamethasone Acetate
Suspension product, perform three (3) consecutive, successful aseptic process
simulations following a protocol which incorporates worse case scenarios;
(6) Certify in writing, with supporting documentation, to
FDA that:
(A) the observations listed in the Forms FD-483 from
the 1994, 1996, 1997, and 1998 inspections, and all systems related to those
observations, have been corrected. The experts shall provide copies of all
audit and validation protocols to FDA prior to beginning work on protocols, and
report to FDA in writing, on a monthly basis, whether the validation work and
-15-
<PAGE>
corrective actions are adequate and complete. Copies of any and all audit
reports required by this Decree shall be copied and contemporaneously provided
to Defendants and to FDA;
(B) all manufacturing, processing, packing and
holding of drugs comply with GMP as set forth in 21 U.S.C. ' 351(a)(2)(B) and
21 C.F.R. Parts 210-211. For products listed in Exhibit A (and for products
listed in Exhibit B if applicable), the expert certification shall describe the
actions that have been taken to ensure that the methods, facilities, and
controls used in and for the laboratories and the manufacturing, processing,
packing, labeling, and holding of these drugs have been established and will be
administered and operated continuously in conformity with GMP. The
certification shall also state that manufacturing processes have been validated
for such products, and that all methods used to test raw materials, in-process
and finished products, as well as stability samples and any other control
parameter, are validated (or verified, if USP);
c. Defendants, working with the experts, design and implement
a comprehensive written QA/QC program that is adequate to ensure continuous
compliance with the FFDC Act and applicable regulations. The QA/QC program shall
at a minimum:
(1) address all facets of compliance monitoring, records
management systems, training, and internal audit and remedial procedures;
(2) ensure that QA personnel have the authority to approve or
reject all procedures and specifications affecting:
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<PAGE>
the safety, identity, strength, quality, and purity of drug products; all
components, including drug product containers, closures, in-process materials,
packaging material, and labeling; and any drug product manufactured, processed,
packed or held by Defendants, including those manufactured, processed, packed
or held at facilities under contract with Defendants;
(3) ensure that QA personnel have the authority and
responsibility to review production records to ensure that no errors have
occurred and, if errors have occurred, that the errors have been fully and
properly investigated, and that proper corrective action has been assessed and
implemented; and
(4) include written SOPs necessary to ensure that all facets
of compliance monitoring are reviewed and controlled by QA personnel;
d. Defendants, in conjunction with the experts, design and
implement a formal training program for all employees involved in the
manufacture and control, storage, or distribution of drug products. Training in
GMP shall be conducted by qualified individuals on a continuing basis and with
sufficient frequency to ensure that employees remain familiar with GMP
requirements applicable to them. The formal training program shall, at a
minimum, include:
(1) training in each particular operation that the employee
performs prior to the employee's conducting that function;
(2) training in GMP as it relates to each employee's
functions; and
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(3) procedures for disciplining employees who after training
are found not to be following written procedures;
e. To the extent applicable, Defendants shall fully comply
with 21 C.F.R. 314.70;
f. Defendants and the experts submit all certifications and
reports described above to the Los Angeles District Director and to FDA's Center
for Drug Evaluation and Research, Division of Manufacturing and Product Quality,
MPN 1, 7520 Standish Place, Rockville, Maryland 20855 (hereinafter, "DMPQ") and,
except for certifications and reports that relate solely to human drugs, FDA's
Center for Veterinary Medicine/Office of Surveillance and Compliance/Division of
Compliance (HFV-230), Metro Park North 2 Building, 7500 Standish Place,
Rockville, Maryland 20855 (hereinafter, "CVM") for FDA's review and evaluation.
Upon request, Defendants and the experts shall promptly provide the data and/or
documents supporting such certifications and reports. FDA shall review the
certifications and reports within thirty (30) days of receipt. Duly authorized
FDA representatives may request additional information and make such inspections
as FDA deems necessary to determine whether Defendants are in compliance with
the FFDC Act, applicable regulations, and this Consent Decree. Such inspections
shall be pursuant to paragraph 26 herein and shall be scheduled and conducted
expeditiously; however, FDA shall not be required or expected to conduct any
inspection for fewer than five (5) drug products or no less than every six (6)
months if requested by Steris; and
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g. FDA notifies Defendants in writing that Steris's
manufacturing (including testing methods), processing, packing, labeling, and
storage of drugs appear to be in conformity with the requirements set forth
herein. As and when FDA deems appropriate, this notification may authorize a
partial resumption of distribution for a specific product or products.
20. Notwithstanding the provisions of paragraph 19, because FDA
recognizes that there is a public need for certain medically necessary drugs
that are not available from other sources, the following expedited procedures
shall be available:
a. FDA has provided to Defendants a list of drugs in Exhibit C
deemed medically necessary. For each drug, Defendants shall submit a report from
the experts on whether the methods used in the manufacture of the drug are
validated; whether the in-process, finished product, and stability test methods
are validated and sufficient in number to ensure that the product has the
identity and strength, and meets the quality and purity characteristics which it
purports or is represented to possess; and whether the methods, facilities and
controls involved in the product's manufacture comply with GMP. Defendants shall
immediately report any shortage of drugs to the Los Angeles District Director
and, for human drugs, to FDA's Center for Drug Evaluation and Research, Office
of Compliance, Drug Shortage Coordinator, 7520 Standish Place, MPN 1, Rockville,
Maryland 20855, or, for veterinary drugs, to CVM.
b. Defendants, in conjunction with the experts, shall submit
within ten (10) days of the date the Consent Decree is
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entered to the Los Angeles District Director a remedial action plan for each
drug product included in Exhibit C. The plan for each such product shall:
(1) describe the processes currently being used to manufacture
the product;
(2) include a proposal to increase in-process and/or finished
product testing (using validated test methods) to be conducted on each batch of
the product manufactured prior to completion of the plan for the product. The
proposal shall provide remedial action plans to address manufacturing and
processing controls that provide sufficient product quality assurance acceptable
to FDA. For purposes of this Consent Decree, implementation of the plan shall
not occur until after FDA has approved such plan, Defendants have taken all
steps identified in the plan, and FDA has reviewed the steps and has, in
writing, notified Defendants that the plan is complete and appears to have been
properly implemented; and
(3) specify: (A) all steps Defendants intend to take with
respect to the product (e.g., reformulation, revalidation of the manufacturing
process, and revalidation of test methods for the product); (B) whether in the
opinion of Defendants such steps will necessitate submission of a new or
supplemental application; and (C) a proposed reasonable time frame for
completing each step of the plan.
c. Upon FDA's review of the reports submitted pursuant to
paragraphs 20(a) and/or (b), or at any other time at FDA's discretion, FDA may
authorize Defendants to resume the
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<PAGE>
distribution of specified drugs, by product or by batch, and under such other
conditions as FDA deems appropriate. If, in FDA's judgment, circumstances change
so the uninterrupted distribution of these drugs by Defendants is no longer in
the public interest, FDA will notify Defendants and they shall immediately cease
distribution of such drugs until they receive written authorization by FDA to
resume distribution. Defendants shall immediately report any adverse events to
the Los Angeles District Director and DMPQ. Defendants shall perform the
procedures required under this paragraph before or concurrently with the
procedures set forth under paragraph 21.
21. Notwithstanding the provisions of paragraphs 19 and 20, the
following accelerated procedures shall be available for the drug products listed
in Exhibit D:
a. To the extent required under 21 C.F.R. 314.70, Defendants
shall submit one complete application for each drug listed in Exhibit D for
supplemental approval specifying all changes to the manufacturing process.
Provided that there are no obstacles to accelerated review, the appropriate FDA
review division for such drug will review the application on an accelerated
basis and notify Defendants of its response. Defendants shall fully comply with
21 C.F.R. 314.70.
b. Defendants shall submit to the Los Angeles District
Director, on a product-by-product basis, a protocol to ensure that the methods,
facilities, and controls used in and for the manufacturing, processing, packing,
labeling, and holding of drugs listed in Exhibit D are adequate to ensure that
the
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<PAGE>
products have the identity and strength, and meet the quality and purity
characteristics which they purport or are represented to possess, and comply
with GMP. Within fifteen (15) days of FDA's receipt of each protocol (or any
modification thereto), FDA shall respond in writing to notify Defendants whether
the protocol is acceptable as submitted or with modification. To the extent FDA
proposes protocol modification, FDA will provide specific written comments on
the protocol. FDA shall not be required to review more than one protocol at time
under this paragraph.
c. As and when appropriate, the experts shall certify in
writing to FDA their conclusion at the completion of each stage of the accepted
protocol described in paragraph 21(b). The certification shall describe the
bases upon which the experts concluded that the provisions of the protocol were
completed and support their conclusion that the product subject to the protocol
has been manufactured in conformity with GMP. Such certifications shall be made
on a lot-by-lot basis before the final stage of the protocol has been completed.
At the completion of the final stage of the protocol, the experts shall certify
their conclusion that, based on three (3) consecutively manufactured lots
manufactured and tested pursuant to the protocol, validation is complete, and
that Defendants have demonstrated that the product will be manufactured in
conformity with GMP. If any of the three validation lots fail any part of the
protocol (unless the failures are insignificant or insubstantial), Defendants
shall immediately notify FDA and, if FDA deems necessary, cease distribution of
all lots of such drug.
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<PAGE>
d. Duly authorized FDA representatives may request additional
information and make such inspections as FDA deems necessary to determine
whether the validation protocol are properly implemented at any time during or
after the manufacturing process. Such inspections shall be conducted pursuant to
paragraph 26.
e. Defendants shall wait fifteen (15) business days following
receipt by FDA of the expert certification before commencing distribution,
unless FDA gives notice and commences an inspection within such fifteen (15)
days, in which event Defendants shall not distribute the drug until FDA
concludes its inspection and thereupon provides Defendants with its decision
with respect to distribution of the drug. FDA may notify Defendants in advance
of fifteen (15) days that they may commence distribution.
22. With respect to drugs currently on the market, the following recall
procedures shall be employed:
(a) For the drug products listed in Exhibit C, Defendants
shall cause to be performed within thirty (30) days of the date of the entry of
this Consent Decree:
(1) Defendants' experts shall review data representative of
all lots within expiry using Product Quality Assessment protocols provided to
FDA and shall recall, upon notifying FDA and receiving FDA's concurrence,
individual lots, and all lots of products, that do not meet the protocol
requirements; and
(2) Defendants shall test all lots within expiry using
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<PAGE>
validated methods and report results of such tests to the appointed experts, who
shall review such results and report to FDA. Defendants shall recall, upon
notifying FDA and receiving FDA's concurrence, drug lots that do not meet
specifications. The Product Quality Assessment protocols shall specify the
appropriate tests to be conducted under this subparagraph.
(b) Defendants shall recall immediately upon signing this
Consent Decree all lots of suspension products that have failing or lack
resuspendability and homogeneity stability data for the required storage
temperature and conditions (for example, lots for which testing was conducted on
retain samples rather than stability samples).
(c) Within thirty (30) days of entry of the Consent Decree,
Defendants shall retest using validated methods all lots that were originally
tested and released using unvalidated methods. Defendants shall recall all lots
that fail testing under validated methods and any lots that could not be
retested in thirty (30) days.
23. Notwithstanding any other provision of this Consent Decree,
Defendants shall promptly institute recalls of any drugs as and when FDA deems
necessary following written notification from FDA stating the basis from which
the affected lots do not meet the specifications established for them in their
approved applications, have GMP deficiencies that may affect the identity,
strength, quality, or purity that they purport or are represented to possess, or
do not bear approved and accurate labeling. All costs of the recalls, including
the costs of FDA's involvement in
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the recalls, shall be borne by Defendants.
24. After Defendants receive written notification from FDA pursuant to
paragraph 19(g) and resume operations in whole or in part, Defendants shall be
enjoined from, directly or indirectly, doing or causing: (a) the introduction or
delivery for introduction into interstate commerce of any drug that has been
manufactured, processed, packed, labeled, or held by them in a manner that is
inconsistent with the FFDC Act and applicable regulations; and (b) the
manufacture, processing, packing, labeling, testing, or holding any drug, which
drug or any of its components has been received in interstate commerce, in a
manner inconsistent with the FFDC Act and applicable regulations. While this
Consent Decree is in effect, any drug that Defendants propose to manufacture,
with exception of the drugs covered under paragraphs 20 and 21, must satisfy the
requirements of paragraph 19.
25. Within thirty (30) days after receiving written notification
pursuant to paragraph 19(g) above, Defendants shall retain an expert or team of
experts, who meet the requirements of paragraph 19(b), to conduct audit
inspections, no less than twice a year for a period of five years following the
entry of this Consent Decree. The experts shall certify in writing whether the
facility remains in compliance with all requirements set forth in the FFDC Act
and applicable regulations. Such person or persons shall prepare a written
report on the facility and its operation at the conclusion of each audit
inspection. Certifications and the full report of such inspections shall be
promptly submitted
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<PAGE>
to the Los Angeles District Director and DMPQ. If FDA finds
the experts' work to be unsatisfactory, FDA will notify Defendants of its
comments. Defendants shall cause the experts to improve their performance within
sixty (60) days and report such improvements to FDA. If FDA finds the experts'
work to remain unsatisfactory, it shall inform Defendants in writing and
Defendants shall replace the experts with experts that meet the requirements of
paragraph 19(b).
IV. GENERAL PROVISIONS
------------------
26. FDA investigators are authorized as they deem necessary, to make
inspections of Defendants' facilities, including all buildings, equipment,
finished and unfinished materials, containers, labeling and all other
promotional materials; to take photographs; to make periodic audits of any of
the experts' records and reports; and to examine and copy all records relating
to the receipt, manufacturing, processing, packing, labeling, holding, and
distribution of any of Defendants' drug products to ensure continuing compliance
with the terms of this Consent Decree. Such inspections shall be permitted upon
presenting a copy of this Consent Decree and FDA credentials. The inspection
authority pursuant to this Consent Decree is apart from and in addition to the
authority to make inspections pursuant to 21 U.S.C. ' 374.
27. At any time after Defendants have resumed operations in whole or in
part pursuant to FDA notification under paragraph 19(g) above, Defendants shall
immediately cease and discontinue manufacturing, packing, labeling, and
distributing any drug if,
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<PAGE>
after inspection, investigation, laboratory analysis of samples, or after
evaluation of other information, FDA notifies Defendants in writing that they
are not in compliance with this Consent Decree or with the FFDC Act and
applicable regulations with respect to that drug. This notice of noncompliance
may, as FDA deems appropriate, require the Defendants to cease operations with
respect to particular drugs or altogether; to institute recalls; to issue safety
alerts; to revise labeling; and to take any other action FDA deems necessary to
ensure compliance with the FFDC Act, applicable regulations and the Consent
Decree.
28. Any cessation of operations as described in paragraph 27 shall
continue unless and until Defendants receive from FDA written notification that
they appear to be in compliance with the FFDC Act, applicable regulations and
the Consent Decree, and that the drug product(s) involved appear(s) to meet the
standards set forth herein. Upon Defendants' written request to resume
operations that states the basis for such request, FDA shall endeavor to
determine within forty-five (45) days of receipt of the request whether
Defendants appear to be in compliance and, if so, issue to Defendants without
undue delay written notification permitting resumption of operations.
29. Steris shall reimburse FDA for the costs of supervision of its
attempt(s) to bring the Claimed Drugs into compliance with the law, its
destruction of any of the Seized Drugs, all FDA inspections, examinations, and
analyses (including document review) that FDA deems necessary to evaluate
compliance efforts under this Consent Decree, and the costs of FDA's involvement
in
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<PAGE>
all recalls, at the standard FDA rates prevailing at the time of such work.
As of the date of entry of this Consent Decree, these rates are: $55.06 per hour
and any fraction thereof per representative for inspection work; $65.99 per hour
and any fraction thereof per representative for laboratory and analytical work
including document review; $0.325 per mile for travel expenses; and the
established regional rate for subsistence expenses where necessary. In the event
that the standard rates generally applicable to the FDA supervision of
court-ordered compliance are modified, these rates shall be increased or
decreased without further order of the Court.
30. Defendants shall abide by the decisions of FDA, which decisions
shall be final. FDA decisions under this Decree shall be reviewed, if necessary,
under the arbitrary and capricious standard set forth in 5 U.S.C. ' 706(2)(A).
Any FDA decision under this Decree shall be reviewable by this Court based
solely on the written record before FDA when the decision is made. At
Defendants' request, Plaintiff shall not oppose expedited judicial review of any
decision by FDA under this Decree. The record shall be limited to any material
before FDA when its decision is made, including FDA's initial decision,
Defendants' response thereto, if any, and FDA's written reply to Defendants'
response, and any other material submitted to FDA by Defendants before this
decision was made.
31. Defendants shall provide a copy of this Consent Decree, by personal
service, registered mail, or other effective means recognized by FDA, within ten
(10) calendar days of its entry, to
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each of their officers, agents, representatives, employees, successors, assigns,
attorneys, and any and all persons in active concert or participation with any
or all of them (hereafter, collectively referred to as "associated persons").
With respect to non-managerial and non-supervisory employees, Defendants may
satisfy the preceding sentence by posting a notice and the consent decree in
common employee areas provided that Defendants conduct training for these
non-managerial and non-supervisory employees to explain the way in which the
Consent Decree will affect Steris's operations and the employees' jobs.
Defendants shall provide the Los Angeles District Director with an affidavit
within thirty (30) days after the date of the entry of this Consent Decree
stating the fact and manner of compliance with this paragraph and identifying
the name and title or position of each person so notified and the manner of
notification. In the event that any of Defendants become associated, at any time
after entry of this Decree, with any additional associated person(s), Defendants
immediately shall provide a copy of this Consent Decree, by personal service,
registered mail, or other effective means recognized by FDA, to such associated
persons. Each time Defendants become associated with any such additional
associated person(s) pursuant to this paragraph, and within fifteen (15)
business days of doing so, Defendants shall also provide to the Los Angeles
District Director an affidavit stating the fact and manner of their compliance
with this paragraph, identifying the names, addresses, and positions of all
associated persons notified pursuant to this paragraph, and attaching a copy of
the
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<PAGE>
executed certified mail return receipts or evidence of personal service.
Within ten (10) business days of receiving a request from FDA for any
information or documentation that FDA deems necessary to evaluate Defendants'
compliance with this paragraph, Defendants shall provide such information or
documentation to FDA.
32. Defendants shall notify the Los Angeles District Director at least
fifteen (15) days before any proposed change in ownership or character of
Steris's business, including, but not limited to: dissolution, assignment, or
sale, which change results in the emergence of a successor corporation, creation
or dissolution of subsidiaries, or any other change in the corporate structure,
or the sale or assignment of any business asset, such as buildings, equipment,
or inventory that may affect compliance with this Consent Decree. Defendants
shall provide a copy of this Decree to any successor or assign at least 30
calendar days prior to any sale or assignment. No change in ownership shall void
the requirements of this Consent Decree.
33. FDA will endeavor to respond as warranted to plans and reports
submitted by Defendants as promptly as practicable under the given
circumstances. FDA's commitment to respond by a specific deadline is contingent
on Defendants' submission of high quality, concise, non-cumulative plans and
reports over a manageable period of time. Defendants' deadlines contained herein
may be extended by FDA without modifying this Consent Decree.
34. If Defendants, or any one of them, violate this Decree
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and are found in civil or criminal contempt thereof, Defendants shall, in
addition to other remedies, reimburse plaintiff for attorney fees,
investigational and analytical expenses, administrative and court costs, and any
other costs or fees related to such enforcement proceedings.
35. This Court retains jurisdiction of this action for the purpose of
modifying this Consent Decree and for granting such additional relief as may be
necessary or appropriate. This Consent Decree shall remain in effect until
further order of the Court; however, no such order shall limit the obligations
of the Defendants to comply with the FFDC Act.
36. Defendants' obligations under this Consent Decree do not modify or
absolve Defendants from any obligation to comply with the FFDC Act or any other
federal statute or regulation.
37. Defendants and the United States acknowledge, understand, and agree
that this Consent Decree sets forth the entire agreement between the parties and
fully supersedes any and all prior agreements or understandings between the
parties pertaining to the subject matter hereof.
38. Except as otherwise provided herein, each party shall bear its own
costs and attorneys' fees.
39. This Consent Decree resolves only this civil in rem and injunction
action. By entering this Decree, Plaintiff has not waived any other action in
connection with these Defendants or any drugs covered by this Consent Decree, or
any action related to the enforcement of this Consent Decree. This action and
the relief granted herein is in addition to, and not in lieu
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of, other remedies as may be provided by law.
40. Five (5) years after entry of this Decree, Defendants may petition
this Court for relief from this Decree. If, in FDA's judgment, Defendants have
continuously remained in compliance with the FFDC Act and applicable
regulations, the PHSA, Steris's SOPs, and this Decree from entry of the Decree
until such time as a petition is made, FDA will not oppose Defendants' motion.
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The undersigned hereby consent to the entry of the foregoing decree:
JOSE DE JESUS RIVERA
United States Attorney
District of Arizona
Attorney for Plaintiff
United States of America
By: /s/ Lisa E. Jennis
--------------------------------
LISA E. JENNIS
Assistant U.S. Attorney
4000 U.S. Courthouse
230 North First Avenue
Phoenix, Arizona 85025
Telephone (602) 514-7500
SHARON KURN
Office of Consumer Litigation
Department of Justice
P.O. Box 386
Washington, D.C. 20044
OF COUNSEL:
MARGARET JANE PORTER
Chief Counsel
KAREN E. SCHIFTER
Associate Chief Counsel
Food and Drug Administration
5600 Fisher Lane
Rockville, Maryland 20857
(301) 827-1148
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OSBORN MALEDON
Attorneys for Defendant
Steris Laboratories, Inc.
By: /s/ Andrew D. Horwitz
--------------------------------
ANDREW D. HURWITZ
The Phoenix Plaza
2929 North Central Avenue, 21st Floor
Phoenix, AZ 85012
State Bar Number 3800
KING & SPALDING
Attorneys for Defendant
Steris Laboratories, Inc.
By: /s/ Eugene M. Pfiefer
--------------------------------
EUGENE M. PFEIFER
1730 Pennsylvania Ave., N.W.
Washington, D.C. 20006-4706
Tel.: (202) 737-0500
STERIS LABORATORIES, INC.
By: /s/ Javier Cayado
--------------------------------
JAVIER CAYADO
President
Steris Laboratories, Inc.
/s/ Javier Cayado
--------------------------------
JAVIER CAYADO
President
Steris Laboratories, Inc.
/s/ Robert Castelluci
--------------------------------
ROBERT CASTELLUCCI
Acting Vice President, Quality Operations
Steris Laboratories, Inc.
/s/ Robert Dephillips
--------------------------------
ROBERT DEPHILLIPS
Vice President, Manufacturing
Steris Laboratories, Inc.
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Exhibit A
---------
n, 1%
PRODUCT
INFeD (Iron Dextran Injection, USP, 50 mg elemental iron/mL)
Vecuronium Bromide for Injection, 10 mg/vials
Vecuronium Bromide for Injection, 20 mg/vials
Bacteriostatic Water for Injection, USP
Chorionic Gonadotropin for Injection, USP, 10,000 U/vial
Chorionic Gonadotropin for Injection, USP, 5,000 U/vial
Chorionic Gonadotropin for Injection, USP, 10,000 U/mL (VET)
Chorionic Gonadotropin for Injection, USP, 5,000 U/mL (VET)
Dexamethasone Acetate Injectable Suspension, USP, 16 mg/mL
Dexamethasone Acetate Injectable Suspension, USP, 8 mg/mL
Dimenhydrinate Injection, USP, 50 mg/mL
Diphenhydramine Hydrochloride Injection, USP, 50 mg/mL
Doxapram Hydrochloride Injection, USP, 50 mg/mL
Edetate Disodium Injection, USP, 150 mg/mL
Heparin Sodium Injection, USP, 20,000 U/mL
Hydroxocobalamin Injection, USP, 100 mcg/mL
Lincomycin Hydrochloride Injection, USP, 300 mg/mL
Methylprednisolone Acetate Injectable Suspension, USP, 20 mg/mL
Methylprednisolone Acetate Injectable Suspension, USP, 80 mg/mL
Methylprednisolone Acetate Injectable Suspension, USP, 40 mg/mL
Metoprolol Tartrate Injection, USP, 1 mg/mL
Nandrolone Decanoate Injection, USP, 200 mg/mL
Nandrolone Decanoate Injection, USP, 100 mg/mL
Neomycin & Polymyxin B Sulfates & Hydrocortisone Otic Solution, USP
Neomycin & Polymyxin B Sulfates & Hydrocortisone Otic Suspension, USP
Progesterone Injection, SUP, 50 mg/mL
Promethazine Hydrochloride Injection, USP, 25 mg/mL
Promethazine Hydrochloride Injection,USP, 50 mg/mL
Testosterone Cypionate Injection, USP, 200 mg/mL
Testosterone Enanthate Injection, USP, 200 mg/mL
Triamcinolone Acetonide Injectable Suspension, USP, 40 mg/ml
Triamcinolone Diacetate Injectable Suspension, USP, 40 mg/ml
Trifluridine Ophthalmic Solution, 1%
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<PAGE>
Exhibit B
---------
EXHIBIT B
PRODUCT
Ascorbic Acid Injection 500 mg
B Complex 100
B Complex with C and B-12
Dicyclomine Hydrochloride Injection, USP, 10 mg/mL
Estradiol Cypionate Injection, USP, 5 mg/mL
Estradiol Valerate Injection, USP, 20 mg/mL
Estradiol Valerate Injection, USP, 40 mg/mL
Hydroxyprogesterone Caproate, 250 mg/mL
Orphenadrine Citrate Injection, USP, 30 mg/mL
Prednisolone Acetate Injectable Suspension, USP, 25 mg/mL
Prednisolone Acetate Injectable Suspension, USP, 50 mg/mL
Testosterone Injectable Suspension, USP, 100 mg/mL
Adenosine Phosphate Injection, 25 mg/mL
Antilrium 1 mg/mL
Artificial Tears, Plus Sterile ophthalmic Solution
Artificial Tears, Sterile Ophthalmic Solution
Ascorbic Acid Injection 222 mg/mL
Ascorbic Acid Injection 500 mg/2mL
Atropine Sulfate Ophthalmic Solution 1%
B Complex with C and B-12 (VET)
Bacteriostatic Sodium Chloride Injection, USP
Bacteriostatic Water for Injection, USP
Betamethasone Sodium Phosphate Injection, USP, 4 mg/mL
Brompheniramine Maleate Injection, USP, 10 mg/mL
Chloramphenicol Ophthalmic Solution, USP, 0.5%
Chlorpheniramine Maleate Injection, USP, 10 mg/mL
Chlorpromazine Hydrochloride Injection, USP, 25 mg/mL
Chlorpromazine Hydrochloride Injection, USP, 50 mg/mL
Cocaine Hydrochloride Topical 4%
Cocaine Hydrochloride Topical 10%
Cyanocobalamin Injection, USP, 100 mcg/mL
Cyanocobalamin Injection, USP, 1000 mcg/mL
Cyclopentolate Hydrochloride Ophthalmic solution, USP, 1%
Dexamethasone Sodium Phosphate Injection, USP, 4 mg/mL
Dexamethasone Sodium Phosphate Injection, USP, 10 mg/mL
Dexamethasone Sodium Phosphate Injection, USP, 4 mg/mL (VET)
<PAGE>
EXHIBIT B
PRODUCT
Dexamethasone Sodium Phosphate Ophthalmic Solution, USP, 0.1%
Dexpanthenol Injection, 250 mg/mL
Diazepam Injection, USP, 5 mg/mL
Dobutamine Hydrochloride Injection, USP, 12.5 mg (base)/mL
Fluorouracil Injection 50 mg/mL
Gentamicin Sulfate Injection, USP, 40 mg/mL
Gentamicin Sulfate Injection, USP, 10 mg/mL
Gentamicin Sulfate Ophthalmic Solution, USP, 3 mg/mL
Hydrocortisone Acetate Injectable Suspension, USP, 25 mg/mL
Hydromorphone Hydrochloride Injection, USP, 10 mg/mL
Hydromorphone Hydrochloride Injection, USP, C11 2 mg/mL
Hydroxyzine Hydrochloride Injection, USP, 25 mg/mL
Hydroxyzine Hydrochloride Injection, USP, 50 mg/mL
Kanamycin Sulfate Injection 1 g/3 mL
Levothyroxine Sodium for Injection, 200 mcg/vial
Levothyroxine Sodium for Injection, 500 mcg/vial
Lidocaine Hydrochloride Injection, USP, 1%
Lidocaine Hydrochloride Injection, USP, 2%
Lidocaine Hydrochloride 1% with epinephrine
Lidocaine Hydrochloride 2% with Epinephrine
Lorazepam Injection 2 mg/mL
Lorazepam Injection 4 mg/mL
Meperidine Hydrochloride Injection, USP, 10 mg/mL
Meperidine Hydrochloride Injection, USP, 50 mg/mL
Meperidine Hydrochloride Injection, USP, 100 mg/mL
Mepivacaine Hydrochloride Injection, USP, 1%
Mepivacaine Hydrochloride Injection, USP, 2%
Methocarbamol Injection, USP, 100 mg/mL
Morphine Sulfate Injection, USP, 0.5 mg/mL
Morphine Sulfate Injection, USP, 1 mg/mL
Morphine Sulfate Injection, CII, 2 mg/mL
Morphine Sulfate Injection CII, 25 mg/mL
Morphine Sulfate Injection CII, 50 mg/mL
Multi-Vitamins for Infusion
Nandrolone Decanoate Injection, USP, 50 mg/mL
Neomycin & Polymyxin B Sulfates Solution for Irrigation
Neomycin & Polymyxin B Sulfates & Dexamethasone Ophthalmic Suspension, USP
Neomycin Sulfate & Dexamethasone Sodium Phosphate Ophthalmic Solution, USP
Neomycin & Polymyxin B. Sulfates & Hydrocortisone Ophthalmic Suspension
<PAGE>
EXHIBIT B
PRODUCT
Neostigmine Methylsulfate Injection, 0.5 mg/mL
Neostigmine Methylsulfate Injection, 1 mg/mL
Sterile Pentamidine Isethionate for Injection, 300 mg/vial
Phenylephrine Hydrochloride Injection, 10 mg/mL (1%)
Phenylephrine Hydrochloride Ophthalmic Solution, USP, 2.5%
Phenylephrine Hydrochloride Ophthalmic Solution, USP, 10%
Pilocarpine Hydrochloride Ophthalmic Solution, USP, 0.5%
Pilocarpine Hydrochloride Ophthalmic Solution, USP, 1%
Pilocarpine Hydrochloride Ophthalmic Solution, USP, 2%
Pilocarpine Hydrochloride Ophthalmic Solution, USP, 3%
Pilocarpine Hydrochloride Ophthalmic Solution, USP, 4%
Pilocarpine Hydrochloride Ophthalmic Solution, USP, 6%
Prednisolone Sodium Phosphate Ophthalmic Solution, USP, 0.125%
Prednisolone Sodium Phosphate Ophthalmic Solution, USP, 1%
Procaine Hydrochloride Injection, USP, 1%
Procaine Hydrochloride Injection, USP, 2%
Prochlorperazine Edisylate Injection, USP, 5 mg/mL
Pyridoxine Hydrochloride Injection, USP, 100 mg/mL
Sulfacetamide Sodium Ophthalmic Solution, USP, 10%
Sulfacetamide Sodium Ophthalmic Solution, USP, 30%
Sulfacetamide Sodium and Prednisolone Sodium Phosphate Ophthalmic Solution,
10%/0.25%
Testosterone Cypionate Injection, USP, 100 mg/mL
Testosterone Cypionate and Estradiol Cypionate 50 mg/2 mg per mL
Testosterone Enanthate and Estradiol Valerate 90 mg/4 mg/mL
Testosterone Propionate Injection, USP, 100 mg/mL
Testosterone Propionate Injection, USP, 50 mg/mL
Testosterone Propionate Injection, USP, 25 mg/mL
Tetrahydrozoline Ophthalmic Solution, 0.5%
Thiamine Hydrochloride Injection, USP, 100 mg/mL
Thiamine Hydrochloride Injection, USP, 200 mg/mL
Tobramycin Ophthalmic Solution, USP, 0.3%
Trimethobenzamide Hydrochloride Injection, USP, 100 mg/mL
Tropicamide Ophthalmic Solution, USP, 1%
<PAGE>
Exhibit C
---------
FDA deems the following drugs manufactured by Steris
Laboratories, Inc. to be medically necessary:
INFeD (Iron Dextran Injection, USP, 50 mg elemental iron/mL) (preservative-free)
Chorionic Gonadotropin for Injection, USP (5,000 U/Vial, 10,000 U/Vial)
Hydroxycobalamin 1 mg/ml
Nandrolone Decanoate 100 mg/ml
Nandrolone Decanoate 200 mg/ml
BO-SE (Selenium, Vitamin E Injection) selenium 1 mg/ml
E-SE (Selenium, Vitamin E Injection) selenium 2.5 mg/ml
MYOSEL-B (Injection, selenium 1 mg/ml)
MYOSEL-E (Injection, selenium 2.5 mg/ml)
Dexamethasone Sodium Phospate, 4 mg/ml, 30 ml vial
Heparin 20,000 IU/vial (only for compassionate use in eight (8) patients with
Arrow International Model 400 infusion pumps)
MVC Plus
-37-
<PAGE>
Exhibit D
---------
INFeD (Iron Dextran Injection, USP, 50 mg elemental iron/mL)
(preservative-free)*
Vecuronium Bromide for Injection (10 mg/vials; 20 mg/vials)
Edetate Disodium Injection, USP, 150 mg/mL
Progesterone Injection, USP, 50 mg/mL
Metoprolol Tartrate Injection, USP, 1 mg/mL
Chorionic Gonadotropin (5,000, 10,000 U/mL VET)
* INFeD shall be treated as an exhibit D drug only in the event FDA deems
that INFeD is not medically necessary.
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