AG Schneiderman Announces $173m Settlement with Pharmaceutical Giant to Resolve Off-Label Marketing Allegations

Endo Pharmaceuticals Will Return $25M To New York Medicaid Program

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New York, NY - February 21, 2014 - Attorney General Eric T. Schneiderman announced today that New York has joined with other states and the federal government in a $173 million global settlement with Endo Pharmaceuticals, a wholly owned subsidiary of Endo Health Solutions, a manufacturer of pharmaceutical products, to resolve civil allegations of unlawful marketing practices aimed at promoting the drug Lidoderm for conditions not approved by the Food and Drug Administration.
New York led the national team representing the states in the investigation and subsequent settlement. According to the qui tam, or whistleblower lawsuit, Endo unlawfully marketed Lidoderm for use in connection with lower back pain or chronic pain. The FDA approved Lidoderm only for the treatment of pain associated with post-herpetic neuralgia, more commonly known as shingles.
“Illegally marketing drugs off-label puts patient lives at risk and rips off New York taxpayers and the state by defrauding Medicaid and other programs,” Attorney General Schneiderman said. “Pharmaceutical companies, no matter how large, are not above the law, and my office will continue to ensure that prescriptions are written based on sound medical judgment – and that drug manufacturers are held responsible for pushing their products for uses not approved by the FDA.”
Under the terms of the civil settlement, Endo will pay $172,916,967 to the states and federal government and pay a criminal penalties and forfeitures of almost $21 million .  Endo will also enter into a Deferred Prosecution Agreement with the Northern District of New York and enter into a Corporate Integrity Agreement with the Department of Health and Human Service’s Office of the Inspector General.  The lawsuit was filed in the Eastern District of Pennsylvania under the provisions of the federal False Claims Act and analogous state False Claims statutes.  The New York Medicaid program will receive more than $25 million in the settlement.
As outlined in the settlement agreement, between March 1999 and December 2007, Endo knowingly promoted the sale and use of Lidoderm for use in connection with lower back and chronic pain that were not medically accepted indications and were not covered by the state Medicaid program. Endo’s alleged unlawful conduct caused false or fraudulent claims to be submitted to the state Medicaid program. A copy of the New York settlement with Endo can be found here.
A team from the National Association of Medicaid Fraud Control Units worked with the federal government on the investigation and conducted settlement negotiations with Endo on behalf of the states. Representatives from the states of New York, Florida, Texas and Oregon comprised the team. Leading the team was Jay Speers, Counsel to the New York Medicaid Fraud Control Unit; Stacey Millis, Supervising Special Auditor Investigator; Michael LaCasse, Chief Auditor, and Matthew Tandle, Senior Special Auditor Investigator.  New York's Medicaid Fraud Control Unit, led by Acting Director Amy Held, is part of the Criminal Justice Division,  led by Executive Deputy Attorney General Kelly Donovan.