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Endo Pharmaceuticals Forced to Pay $192.7M for Criminal Misbranding of Lidoderm

Stressing that drug safety “must be shown by science, not sales pitches,” U.S. Attorney Richard S. Hartunian announced a settlement of $192.7 million with Endo Pharmaceuticals Inc. The agreement reached in February 2014 resolved criminal and civil allegations that Endo had misbranded its topical painkiller Lidoderm in violation of the Food, Drug, and Cosmetic Act. 

The U.S. Food and Drug Administration had approved Lidoderm to relieve post-herpetic neuralgia, a common, often excruciatingly painful, complication of shingles, for which there is no cure. This was the only approved application for Lidoderm. Still, between 2002 and 2006, Endo promoted unapproved, “off-label” uses for the drug, which included treatment for lower back pain, diabetic neuropathy, and carpal tunnel syndrome. Sales managers within the company instructed sales agents to expand the market for Lidoderm in conversation with physicians, including those in workers’ compensation programs. 

From March 1999 through December 2007, Endo’s illegal promotions caused patients and physicians to submit false claims to federal healthcare programs, such as Medicaid. Because the unapproved uses of Lidoderm were not medically accepted, these filings constituted fraud against the U.S. government, opening the door for legal action under the federal False Claims Act. Such lawsuits, known as qui tam actions, because private parties sue on behalf of the government, are an important tool for uncovering illegal activity that harms patients and steals from federal programs that make up our social safety net.

While Endo’s off-brand marketing of Lidoderm presented less of a danger to the public than other drug fraud cases, it still violated the important principle that drugs that go on the market must have some proven efficacy. Patients and prescribers have a right to know that there is science behind a recommendation, not just a sales pitch. 

Under the False Claims Act, whistleblowers who file suit exposing a company’s fraud against the government can share in the government’s civil recovery. Whistleblowers Peggy Ryan and Max Weathersby, former Lidoderm sales reps, and physician Gursheel S. Dhillon were awarded a share of $137.7 million. Though the amount was undisclosed, whistleblower recovers for FCA claims generally range from 15 to 25 percent.

“The employee who, in the public interest, has the personal courage to challenge illegality is a kind of public hero.”