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Hikma Pharmaceuticals : Drugmaker asked Arkansas not to use drug in executions

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04/21/2017 | 06:56pm CET

A drugmaker asked Arkansas officials not to purchase its products for executions months before the state accepted a third-party "donation" of potassium chloride as one of three drugs to use in lethal injections, according to letters obtained by The Associated Press.

Fresenius Kabi USA wrote to Department of Correction Director Wendy Kelley and other officials last July saying the company was aware Arkansas wanted to buy drugs to carry out executions and asking the state not to violate contracts between Fresenius and its distributors that forbid the distributors from selling the drugmaker's products for use in capital punishment.

Fresenius has since identified itself as the possible maker of the Arkansas' supply of potassium chloride — which Kelley recently testified she obtained by driving to an undisclosed location to meet an unnamed distributor, who when told about the billing process chose to "donate" it rather than create a record of the sale.

Legal and pharmaceutical experts said the methods Arkansas used to obtain the potassium chloride, midazolam and vecuronium bromide to resume carrying out its first executions since 2005 raise concerns about the state's respect for contracts between private businesses.

Arkansas carried out an execution Thursday using the drugs after the state Supreme Court reversed a judge's order that had halted the use of the vecuronium bromide. The ruling came in an unprecedented lawsuit from drug distributor McKesson Corp., which alleged state officials misled the company when purchasing its supply of vecuronium bromide last July by using a physician's license number that implied the drug would be used only for medically approved purposes.

The state had planned to use the drugs in four double executions over an 11-day period in April. The eight executions would have been the most by a state in such a compressed period since the U.S. Supreme Court reinstated the death penalty in 1976. The state said the executions needed to be carried out before its supply of the sedative midazolam expires on April 30. Three executions were canceled because of court decisions, and court rulings have put at least one other in doubt.

The state has refused to answer questions about the drug suppliers, including whether the Department of Correction received Fresenius' letters, citing a law that keeps the drug sources secret. However, at a court hearing on the McKesson lawsuit, department deputy director Rory Griffin said he did tell a McKesson salesman about the intended purpose of the drug.

A spokeswoman for McKesson didn't immediately return a request for comment Friday. Representatives for Fresenius and Hikma Pharmaceuticals — the parent company for West-Ward, which the AP identified in 2015 as the likely maker of Arkansas' midazolam — said they don't know for sure that the state used their products because Arkansas officials won't answer their questions.

"If the State of Arkansas was able to procure any of our U.S.-manufactured drugs for use in lethal injections despite these controls - which it will not confirm or deny to us - it was not directly from us, nor with our knowledge," Hikma Pharmaceuticals spokeswoman Brooke Clarke wrote. "We have made our objections to the misuse of any of our products for lethal injection known to the governors, attorneys general and departments of correction in every state with capital punishment."

According to Fresenius' July letter, use of its drugs in executions could result in stricter regulations from the European Union, which bans the export of drugs used in lethal injections. Fresenius spokesman Matt Kuhn confirmed that President and CEO John Ducker wrote the letter as well as another sent in 2016 and one sent in recent weeks.

"We would like the Arkansas Department of Correction to destroy or return any product of ours they may have," Kuhn said, adding the company did not have immediate plans for further legal action.

Hikma also wrote letters to the Correction Department last year seeking the return of its drugs.

"We are concerned that placing further restrictions on the distribution of this product to prevent unintended use may ultimately have a number of negative unintended consequences, such as impacting our ability to supply it for doctors and their patients who have a genuine medical need," Hikma wrote in December.

Robert Dunham, executive director of the Death Penalty Information Center, said the McKesson suit marked the first time a company directly asked a court to stop its drugs from being used.

"What McKesson's lawsuit demonstrates is that the secrecy law is not designed to protect the distributors and manufacturers; it's designed to try to prevent them from learning that the state has improperly obtained the drugs," said Dunham, whose nonprofit group opposes the death penalty.

Courts have upheld Arkansas' secrecy law and similar laws in a handful of other states.

Arkansas isn't the first state to be accused of deceptively obtaining execution drugs. Ohio officials allegedly inquired about drugs through its mental health department, and Texas allegedly used a drug registration number for a long-shuttered prison hospital. An assistant attorney general in Arkansas said in a court proceeding in 2015 that the third-party supplier of the state's midazolam agreed to the sale in return for anonymity despite the supplier's contract with the manufacturer forbidding the sale.

One business leader and vocal death penalty opponent found Arkansas' efforts to get around contracts between two private companies to be troubling.

"They suggest the state cares more about the killing of prisoners than it does about the integrity of private contracts — another red flag for any business," Richard Branson, the billionaire founder of the Virgin Group, wrote in a recent blog.

But Arkansas Economic Development Commission Executive Director Mike Preston said he hasn't seen any backlash.

"Among all the companies we've met and spoken to recently not one has brought up anything related to the state's executions," he said.

Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed., source Associated Press News

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EBIT 2018 335 M
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Yield 2018 1,96%
P/E ratio 2018 20,40
P/E ratio 2019 16,70
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Average target price 15,2 $
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Khalid Walid Hosni Nabilsi Chief Financial Officer
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