Endo Pharmaceuticals Agrees to Settle in Qui Tam Case

Endo Pharmaceuticals, Inc. and its subsidiary Endo Health Solutions, Inc. (collectively “Endo”) have agreed to pay $192.7 million to resolve allegations by whistleblowers in three qui tam lawsuits that they violated the False Claims Act. According to the Department of Justice, the settlement resolves both criminal and civil allegations concerning the marketing of the drug Lidoderm for off-label uses.

According to the Justice Department, three whistleblowers filed separate actions under the qui tam provision of the False Claims Act in the United States District Court for the Eastern District of Pennsylvania. The whistleblowers, Peggy Ryan and Max Weathersby, both former Lidoderm sales representatives, and Gursheel Dhillon, a physician, alleged that Endo marketed Lidoderm for uses that had not been approved by the Food and Drug Administration (“FDA”) as safe and effective.

According to the whistleblowers, Lidoderm had been approved for the relief of pain associated with post-herpetic neuralgia (“PHN”), a complication of shingles. A criminal information filed by the government alleged that, between 2002 and 2006, the label for Lidoderm did not contain information regarding the drug’s use in the treatment of non-PHN pain. The government asserted that Endo intended Lidoderm to be used for treatment of non-PHN pain, but those other uses were not approved by the FDA.

In a deferred prosecution agreement, Endo admitted that it intended for Lidoderm to be used to treat conditions not approved by the FDA, such as low back pain, diabetic neuropathy, and carpal tunnel syndrome; and it marketed the drug to physicians for those unapproved uses. Endo agreed to settle the criminal charges and agreed to pay $20.8 million in monetary penalties and forfeiture.

The whistleblowers alleged that, between 1999 and 2007, Endo caused the submission of false claims to government health care programs, such as Medicaid, by promoting the drug for off-label uses that were not covered by the government health care programs. Endo agreed to pay a total of $171.9 million to resolve the civil claims asserted by the whistleblowers – $137.7 to the federal government and $34.2 million to the states and the District of Columbia.

The whistleblowers will receive a percentage of the settlement proceeds as their reward under the qui tam provisions of the False Claims Act.

To read more about qui tam cases and the False Claims Act, click here.