Conn. To Share In $193 Million Pharmaceutical Settlement
United States ex rel. Ryan v. Endo Pharmaceuticals: A pharmaceutical company that promoted a prescription pain relief patch for purposes not intended by the Food and Drug Administration has agreed to pay $192.7 million, including more than $600,000 to Connecticut, to resolve criminal and civil allegations against the company.
Endo Pharmaceuticals Inc., a Delaware corporation headquartered in Malvern, Pa., was alleged to have inappropriately marketed the drug Lidoderm for uses not approved by the FDA.
According to officials in Connecticut and elsewhere, Endo Pharmaceuticals promoted the sale and use of Lidoderm for chronic pain sufferers and low back pain even though the only FDA-approved use of the prescription drug is to treat pain associated with post-herpetic neuralgia, more commonly known as shingles. Doctors were also prescribing the drug for diabetic neuropathy and carpal tunnel syndrome.
State authorities claim that Endo Pharmaceuticals' false marketing of the drug occurred between March 1999 and December 2007. To resolve the civil allegations, Endo Pharmaceuticals agreed to pay $172.9 million to numerous states and the federal government. The company paid an additional $20.8 million in criminal fines and forfeitures.
The portion of the settlement attributable to the state and federal shares of Connecticut's Medicaid program is $1,080,085. Of that amount, Connecticut will collect $533,404. Connecticut will receive an additional $79,973 for state-specific prescription drug programs administered by the state Department of Social Services.
"Improper marketing of drugs leads to false and fraudulent claims against our Medicaid program," said Attorney General George Jepsen in a statement. "We take allegations of fraud and abuse very seriously, and we will continue to work to hold accountable those who seek to defraud our taxpayers."
Also as part of the settlement, Endo Pharmaceuticals has agreed to enter into what's called a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General that requires the company to implement measures designed to avoid or promptly detect similar conduct.
Further, the settlement requires Endo to implement an internal risk assessment and mitigation program that requires numerous internal and external reviews of promotional and other practices. The agreement also requires key executives and individual board members to sign certifications about compliance, and it requires the company to publicly report information about its financial arrangements with physicians.
"The company takes its responsibility to patients, health-care providers and our shareholders very seriously," Rajiv De Silva, Endo Pharmaceuticals' president and chief executive officer, said in a statement. "We are pleased to resolve this matter and are confident that we have robust programs in place to assist us in satisfying our legal and regulatory agreements. We are committed to a company culture that supports the conduct of our business in a compliant and ethical manner."
The civil settlement resolves three pending lawsuits in federal court in the Eastern District of Pennsylvania under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and to share in any recovery. The actions were filed by two former Lidoderm sales representatives and a physician. The whistleblowers' share of the settlement has not been determined.