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
 
 
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