Endo to Pay $193 Million in Lidoderm Marketing Probe

Endo Health Solutions Inc. (ENDP) entered a deferred-prosecution agreement and will pay $193 million to settle whistle-blower claims that it marketed the shingles drug Lidoderm for unapproved purposes, the U.S. said.

Endo will pay $20.8 million in forfeitures and $171.9 million in civil false claims settlements with the states and the U.S. government, the Justice Department said today in a statement.

Between 2002 and 2006, Endo sales managers instructed some representatives on how to expand “sales conversations” with doctors beyond the treatment of shingles-related pain, the U.S. said. Under the deferred-prosecution agreement, Endo admitted that it intended Lidoderm to be used for uses not approved by the U.S. Food and Drug Administration, the Justice Department said.

The agreement was filed in federal court in New York. The company also entered into a five-year corporate integrity agreement with the Department of Health and Human Services.

The settlement comes about three months after Malvern, Pennsylvania-based Endo, which faces generic competition to Lidoderm, acquired Paladin Labs Inc. for about $1.6 billion to expand in Canada and emerging markets.

The deal gives Endo access to the Canadian market, where Paladin has recorded average sales growth of 28 percent over the past five years, selling pain and allergy treatments. Endo failed last month to acquire NuPathe Inc., which makes migraine medicines. Rival Teva Pharmaceutical Industries Ltd.’s $144 million bid for the drugmaker topped Endo’s offer.

“We are pleased to resolve this matter and are confident that we have robust programs in place to assist us in satisfying our legal and regulatory agreements,” Endo Chief Executive Officer Rajiv De Silva said in a statement. 

To contact the reporter on this story: Dawn McCarty in Wilmington at dmccarty@bloomberg.net

To contact the editor responsible for this story: Andrew Dunn at adunn8@bloomberg.net

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