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The Food and Drug Administration has issued its own prescription to pharmaceutical maker Schering-Plough Corporation, and it’s a bitter pill to swallow. The company must pay $500 million, in two installments, to the U.S. government for failing to comply with FDA regulations. The agreement, approved by a New Jersey district judge in May, is the largest monetary settlement in the FDA’s history. A dozen agency inspections, beginning in 1998, uncovered Schering-Plough’s failure to adhere to FDA manufacturing regulations at its drug-making facilities in New Jersey and Puerto Rico. The problems included quality assurance, facility upkeep, and packaging, the agency states. As is typical in FDA settlements, the consent decree names two senior officers at the company. CEO and chairman of the board Richard Kogan, along with Steven Chellevold-a senior VP and an executive at a subsidiary responsible for a portion of the payments to the government-made no admission or denial of wrongdoing. Schering-Plough agreed to improve its production process at four plants, stop manufacturing certain products, and recall two discontinued medications. The company must also check in regularly with the FDA to ensure future compliance. For plaintiff United States U.S. Department of Justice (Washington, D.C.): Senior trial counsel, office of consumer litigation-civil division Gerald Kell. U.S. Attorney’s Office for the District of New Jersey (Newark): Assistant U.S. attorney and civil division chief Michael Chagares. Food and Drug Administration (Washington, D.C.): Deputy chief counsel for litigation Eric Blumberg and associate chief counsel for enforcement Carl Turner. (Blumberg and Turner are located in the agency’s Rockville, Maryland, office.) For defendants Schering-Plough Corporation and subsidiary Schering-Plough Products, LLC (Kenilworth, New Jersey) In-house: Executive vice president and general counsel Joseph Connors. Covington & Burling (Washington, D.C.): Peter Barton Hutt, Bruce Kuhlik, and associate Erika King. The firm has represented Schering-Plough in food and drug matters since the 1980s. For defendant Richard Kogan Covington & Burling (Washington, D.C.): Richard Kingham. For defendant Steven Chellevold Kleinfeld, Kaplan and Becker (Washington, D.C.): Peter Safir. The firm, which specializes in food and drug law, has represented Schering-Plough in several prior matters. OUTLOOK Schering-Plough’s fines must be paid by May 2003. The decree does not affect a separate criminal investigation initiated by the FDA into the company’s products.

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