|TRENTON – Acting Attorney General John J. Hoffman announced today that New Jersey will receive $3.1 million as the result of its participation in a global settlement with Pennsylvania-based Endo Pharmaceuticals. The settlement resolves civil allegations that Endo employed unlawful marketing practices to promote its drug Lidoderm for uses not approved by the federal Food and Drug Administration (FDA).
Based in Malvern, Endo is a wholly-owned subsidiary of Endo Health Solutions. According to a federal qui tam, or “whistleblower” lawsuit filed against the company, Endo unlawfully marketed Lidoderm for use in connection with lower back pain or chronic pain despite it having been approved by the FDA only for treatment of pain associated with post-herpetic neuralgia, commonly known as “shingles.”
Under terms of the civil settlement, Endo will pay a total of $172.9 million to the participating states and the federal government. Endo also will pay the federal government a $20.8 million criminal fine, and enter into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services’ Office of the Inspector General.
Between March 1999 and December 2007, Endo knowingly promoted the sale and use of Lidoderm to relieve lower back pain and chronic pain. Neither use is medically-accepted, and neither is covered by the State Medicaid program.
Endo’s alleged unlawful conduct, which included the use of kickback schemes, resulted in false and/or fraudulent claims being submitted to the State Medicaid program, causing the program to pay Endo monies to which it was not entitled.
“There is no ambiguity in the law. The marketing and promotion of pharmaceutical products for unapproved uses is illegal, and the resultant false billing to government health care programs costs all of us,” Acting Attorney General Hoffman said.
“Working together with our state and federal partners,” said Acting Insurance Fraud Prosecutor Ronald Chillemi, “we will continue to identify Medicaid fraud and abuse, and hold those who participate in such conduct accountable.”
The federal qui tam lawsuit against Endo was filed in the Eastern District of Pennsylvania in 2010 under the provisions of the federal False Claims Act, as well as False Claims statutes in New Jersey and other states.
Investigation of the Lidoderm matter found that Endo sought to increase market share for the drug, which is applied in topical patch form, through such strategies as giving free samples to physicians who did not practice in areas likely to treat shingles patients, including orthopedic surgeons, neurosurgeons and rheumatologists.
The company also circulated ostensibly neutral articles suggesting Lidoderm had been effective, during clinical trials, in treating lower back pain and chronic pain when in fact it had sponsored the trials. Endo also based bonuses and financial incentives for its sales representatives on sales goals that could only be achieved through off-label utilization of Lidoderm.