Litigation Round-up

Settlements

Pharmaceutical company Organon Inc. agreed to pay $31 million to settle federal and state allegations that it underpaid Medicaid drug rebates, provided kickbacks to nursing home pharmacy companies, promoted its antidepressants for unapproved uses, and misrepresented its drug prices to state Medicaid programs.  The settlement resolved two False Claims Act (FCA) qui tam whistleblower suits.

The Department of Justice (DOJ) announced last month that Shire Pharmaceuticals LLC had agreed to pay $56.5 million to resolve FCA civil allegations that Shire improperly promoted several products.  Specifically, the DOJ alleged that: (i) between January 2004 and December 2007, Shire promoted Adderall XR for certain uses despite a lack of clinical data to support such claims and overstated the efficacy of the drug relative to other ADHD drugs; (ii) between February 2007 and September 2010, Shire sales representatives and other agents made false and misleading statements about the efficacy and “abuseability” of Vyvanse to state Medicaid formulary committees and individual physicians; (iii) between April 2006 and September 2010, Shire representatives improperly marketed Daytrana as less abuseable than traditional, pill-based medications and, for part of this period, improperly assisted physicians with the prior authorization process for prescriptions to induce these physicians to prescribe Daytrana and Vyvanse; and (iv) between January 2006 and June 2010, Shire sales representatives promoted Lialda and Pentasa for off-label uses not approved by the U.S. Food and Drug Administration (FDA).  The settlement resolves two FCA qui tam whistleblower suits filed by former employees.  As part of the settlement, Shire also entered into a corporate integrity agreement (CIA) with the Office of Inspector General (OIG).

Medtronic Inc. reached a $362,362 settlement with 46 states and the District of Columbia to settle whistleblower FCA allegations that it offered kickbacks to physicians to implant its pacemakers and defibrillators.  This settlement follows a $10 million federal settlement earlier this year.

Pfizer Inc. reached a $35 million settlement with 41 states and the District of Columbia to settle allegations that its subsidiary, Wyeth, inappropriately marketed Rapamune for uses not approved by the FDA and violated state consumer protection laws.

Investigations

The DOJ announced that it has filed two complaints under the FCA against spinal implant company Reliance Medical Systems; two of its distributorships – Apex Medical Technologies and Kronos Spinal Technologies; the company’s owners; and a Michigan neurosurgeon.  The complaints allege that the distributorships provided inappropriate kickbacks to physicians to induce them to use Reliance’s spinal implants in surgeries.  The government also has intervened in a related FCA whistleblower suit that alleges that medically unnecessary or excessive surgeries were performed due to the relationship with Reliance.

Congressional Inquiries

Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, and Senator Bernard Sanders, Chairman of the Subcommittee on Primary Health and Aging, Senate Committee on Health, Education, Labor and Pensions, sent letters to 14 generic drug manufacturers requesting information about the “escalating prices” of generic medicines.  Links to each letter are available here.

Posted by Sarah K. diFrancesca

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