Endo Pharmaceuticals to Pay $192.7 Million to Settle Whistleblower Allegations of Off-Label Marketing By Tod Aronovitz | 03/11/14 | 0 Comment

The Justice Department announced that pharmaceutical company Endo Health Solutions Inc. and its subsidiary Endo Pharmaceuticals Inc. will pay $192.7 million to settle criminal and civil liability involving the alleged off-label marketing of prescription drug Lidoderm for uses not approved by the Food & Drug Administration (FDA).

The two components of the resolution include a deferred prosecution agreement and payment of $20.8 million, in addition to civil settlements brought under the qui tam provisions of the False Claims Act involving the federal government and three whistleblowers totaling $171.9 million.

According to the Justice Department, the civil settlement also resolves three lawsuits that were pending in federal court in the Eastern District of Pennsylvania under the qui tam, or whistleblower, provisions of the False Claims Act. The whistleblowers are former Lidoderm sales representatives, Peggy Ryan and Max Weathersby, as well as physician Gursheel S. Dhillon. The whistleblowers’ share of the settlement has yet to be determined.

The Lidoderm pain patch was approved by the FDA only for the treatment of Post Herpetic Neuralgia (PHN), a rare disease which is a complication of shingles. In the criminal allegations, the government accuses Endo Pharmaceuticals of misbranding Lidoderm, from 2002 through 2006, for new intended uses including low back pain, diabetic neuropathy and carpal tunnel syndrome that were not approved by the FDA.

The charges also say that some Endo Pharmaceuticals sales managers instructed certain pharmaceutical reps to include off-label uses of Lidoderm in their conversations with doctors, and encouraged the promotion of the patch in workers’ compensation clinics.

As a result, Endo Pharmaceuticals agreed to resolve the charges by admitting it intended Lidoderm for uses not approved by the FDA and promoted those uses to health care providers. The company will pay $20.8 million and implement a number of compliance measures.

On the civil liability side, the government alleged that, from March 1999 through December 2007, Endo caused false claims to be submitted to federal health care programs, including Medicaid, with its off-label marketing of Lidoderm for unapproved uses, some of which were not medically accepted indications and, therefore, not covered by the federal health care programs. To resolve these civil claims, Endo will pay $137.7 million to the federal government and $34.2 million to the states and the District of Columbia.

As part of the settlement, the pharmaceutical company will also enter into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General. That agreement requires Endo to implement an internal risk assessment and mitigation program, calls for numerous internal and external reviews of its marketing practices, and compels the company to publicly report information about its financial arrangements with physicians, among other things.

“By marketing Lidoderm for uses not covered by federal health care programs, Endo profited at the expense of taxpayers and could have put patients at risk,” Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson said. “Under our CIA, Endo agrees to promote its products legally, while board members and top executives are specifically held accountable for compliance.”

Endo Pharmaceuticals Inc. is a Delaware corporation headquartered in Malvern, Pa.

How to Report Miami Medicare or Other Fraud

Healthcare or medical billing employees who have inside knowledge of questionable Medicare billing practices can file a confidential legal claim under the False Claims Act. By acting as a “whistleblower” in what is known as a “qui tam” lawsuit, a private party may collect between 10 to 30 percent of the amount recovered, depending on how the case is prosecuted.

ARONOVITZ LAW: Miami Whistleblower / Qui Tam Law Firm

The Miami Qui Tam law firm of ARONOVITZ LAW routinely works with Miami whistleblowers to document Medicare fraud and other forms of fraud against the government. Contact Miami Whistleblower / Qui Tam lawyer Tod Aronovitz to discuss a case.