DOJ: ENDO TO PAY $192.7M TO RESOLVE IMPROPER LIDODERM MARKETING

     (The following press release from the U.S. Department of Justic was  received by e-mail. The sender verified the statement.)  ENDO PHARMACEUTICALS AND ENDO HEALTH SOLUTIONS TO PAY $192.7 MILLION TO RESOLVE  CRIMINAL AND CIVIL LIABILITY RELATING TO MARKETING OF PRESCRIPTION DRUG  LIDODERM FOR UNAPPROVED USES  WASHINGTON - Pharmaceutical company Endo Health Solutions Inc. and  its subsidiary Endo Pharmaceuticals Inc. (Endo) have agreed to pay $192.7  million to resolve criminal and civil liability arising from Endo's marketing  of the prescription drug Lidoderm for uses not approved as safe and effective  by the Food and Drug Administration (FDA), the Justice Department announced  today.  The resolution includes a deferred prosecution agreement and forfeiture  totaling $20.8 million and civil false claims settlements with the federal  government and the states and the District of Columbia totaling $171.9 million.   Endo Pharmaceuticals Inc. is a Delaware corporation headquartered in Malvern,  Pa.  "FDA's drug approval process is designed to ensure that companies market their  products for uses that are proven to be safe and effective," said Assistant  Attorney General for the Justice Department's Civil Division Stuart F. Delery.   "We will hold accountable those who circumvent that process in pursuit of  financial gain."  In a criminal information filed today in the Northern District of  New York, the government charged that, between 2002 and 2006, Endo  Pharmaceuticals Inc. introduced into interstate commerce Lidoderm that was  misbranded under the Federal Food, Drug and Cosmetic Act (FDCA).  The FDCA  requires a company, such as Endo Pharmaceuticals Inc., to specify the intended  uses of a product in its new drug application to the FDA.  Once approved, a  drug may not be introduced into interstate commerce for unapproved or  "off-label" uses until the company receives FDA approval for the new intended  uses.  During the period of 2002 to 2006, Lidoderm was approved by the FDA only  for the relief of pain associated with post-herpetic neuralgia (PHN), a  complication of shingles.  The information alleges that, during the relevant  time period, the Lidoderm distributed nationwide by Endo Pharmaceuticals Inc.  was misbranded because its labeling lacked adequate directions for use in the  treatment of non-PHN related pain, including low back pain, diabetic neuropathy  and carpal tunnel syndrome.  These uses were intended by Endo Pharmaceuticals  Inc. but never approved by the FDA.  The information further alleges that  certain Endo Pharmaceuticals Inc. sales managers provided instruction to  certain sales representatives concerning how to expand sales conversations with  doctors beyond PHN and encouraged promotion of Lidoderm in workers'  compensation clinics.  In a deferred prosecution agreement to resolve the charge, Endo Pharmaceuticals  Inc. admitted that it intended that Lidoderm be used for unapproved indications  and that it promoted Lidoderm to health care providers for those unapproved  indications.  Under the terms of the deferred prosecution agreement, Endo  Pharmaceuticals Inc. will pay a total of $20.8 million in monetary penalties  and forfeiture.  Endo Pharmaceuticals Inc. further agreed to implement and  maintain a number of enhanced compliance measures, including making publicly  available the results of certain clinical trials and requiring an annual review  and certification of its compliance efforts by the Chief Executive Officer of  its parent company, Endo Health Solutions.  The deferred prosecution agreement  will not be final until accepted by the U.S. District Court for the Northern  District of New York.  "The safety and efficacy of drugs must be shown by science, not  sales pitches," said U.S. Attorney for the Northern District of New York  Richard S. Hartunian.  "Drugs marketed for intended uses not approved by the  FDA are misbranded because their labeling lacks adequate directions for those  uses.  This settlement emphasizes that public health is protected by labeling  based on product performance, rather than profitability, and promotes enhanced  efforts to ensure compliance with all requirements."  In addition, Endo agreed to settle its potential civil liability in  connection with its marketing of Lidoderm.  The government alleged that, from  March 1999 through December 2007, Endo caused false claims to be submitted to  federal health care programs, including Medicaid, a jointly funded federal and  state program, by promoting Lidoderm for unapproved uses, some of which were  not medically accepted indications and, therefore, were not covered by the  federal health care programs.  Of the $171.9 million Endo has agreed to pay to  resolve these civil claims, Endo will pay $137.7 million to the federal  government and $34.2 million to the states and the District of Columbia.  "Off-label marketing can undermine the doctor-patient relationship  and adversely influence the clear and honest judgment of doctors that their  patients rely on and trust," said U.S. Attorney for the Eastern District of  Pennsylvania Zane D. Memeger.  "Pharmaceutical companies have a legal  obligation to promote their drugs for only FDA-approved uses.  This obligation  takes precedence over the company's bottom line."  "The settlement announced today demonstrates the government's  continued scrutiny of pharmaceutical companies that interfere with FDA's  mission of ensuring that drugs are safe and effective for the American public,"  said Special Agent in Charge of the FDA's Office of Criminal Investigations'  New York Field Office Mark Dragonetti.  "We will continue to work with our law  enforcement partners to investigate and prosecute pharmaceutical companies that  disregard the drug approval process and jeopardize the public health by  engaging in the nationwide distribution of misbranded products."  "Endo Pharmaceutical enriched themselves at the expense of the  public," said Special Agent in Charge Andrew W. Vale of the Albany Division of  the Federal Bureau of Investigation.  "Patients will search for drug therapies  to assist in pain management, and they deserve the right to drugs approved for  such use.  The FBI will continue to work with our federal partners to  investigate companies such as Endo Pharmaceuticals to ensure patients are safe."  Also as part of the settlement, Endo Pharmaceuticals Inc. has agreed to enter  into a Corporate Integrity Agreement (CIA) with the Department of Health and  Human Services Office of Inspector General that requires Endo to implement  measures designed to avoid or promptly detect conduct similar to that which  gave rise to this resolution.  Among other things, the CIA requires Endo to  implement an internal risk assessment and mitigation program and requires  numerous internal and external reviews of promotional and other practices.  The  CIA also requires key executives and individual board members to sign  certifications about compliance, and it requires the company to publicly report  information about its financial arrangements with physicians.  "By marketing Lidoderm for uses not covered by federal health care programs,  Endo profited at the expense of taxpayers and could have put patients at risk,"  said Inspector General of the U.S. Department of Health and Human Services  Daniel R. Levinson.  "Under our CIA, Endo agrees to promote its products  legally, while board members and top executives are specifically held  accountable for compliance."  The civil settlement resolves three lawsuits pending in federal court in the  Eastern District of Pennsylvania under the qui tam, or whistleblower,  provisions of the False Claims Act, which allow private citizens to bring civil  actions on behalf of the government and to share in any recovery.  The actions  were filed by Peggy Ryan, a former Lidoderm sales representative, Max  Weathersby, another former Lidoderm sales representative and Gursheel S.  Dhillon, a physician.  The whistleblowers' share of the settlement has not been  determined.  This settlement illustrates the government's emphasis on combating health care  fraud and marks another achievement for the Health Care Fraud Prevention and  Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by  Attorney General Eric Holder and Secretary of Health and Human Services  Kathleen Sebelius.  The partnership between the two departments has focused  efforts to reduce and prevent Medicare and Medicaid financial fraud through  enhanced cooperation.  One of the most powerful tools in this effort is the  False Claims Act.  Since January 2009, the Justice Department has recovered a  total of more than $19 billion through False Claims Act cases, with more than  $13.4 billion of that amount recovered in cases involving fraud against federal  health care programs.  The civil settlement was handled by the U.S. Attorney's Office for  the Eastern District of Pennsylvania and the Civil Division's Commercial  Litigation Branch.  The criminal case was handled by the U.S. Attorney's Office  for the Northern District of New York and the Civil Division's Consumer  Protection Branch.  These matters were investigated by the Federal Bureau of  Investigation, the Food and Drug Administration Office of Criminal  Investigation, the Department of Health and Human Services Office of Inspector  General Office of Investigations, the Defense Criminal Investigative Service of  the Department of Defense, the U.S. Postal Service Office of Inspector General  and the Office of Personnel Management Office of Inspector General with  assistance from the Department of Health and Human Services Office of Counsel  to the Inspector General and Office of General Counsel and Center for Medicare  and Medicaid Services, the Food and Drug Administration's Office of Chief  Counsel and the National Association of Medicaid Fraud Control Units.  Except as to conduct admitted in connection with the deferred prosecution  agreement, the claims settled by the civil agreement are allegations only, and  there has been no determination of civil liability.  The civil lawsuits are  captioned United States ex rel. Ryan v. Endo Pharmaceuticals Inc.,  Civil  Action No. 05-cv-3450, United States ex rel. Weathersby, et al. v. Endo  Pharmaceuticals Inc., et al, Civil Action No. 10-cv-2039 and United States ex  rel. Dhillon v. Endo Pharmaceuticals, Civil Action No. 11-cv-7767, all docketed  in the Eastern District of Pennsylvania.  (rml) NY