It is unlawful for a pharmaceutical company to market a drug for purposes beyond those that have been approved by the Food and Drug Administration. When a company decides to sell a new drug to American consumers, the FDA ensures the drug is rigorously tested to reveal any deadly or injurious side effects. Sometimes, the FDA will refuse to allow a company to market a drug to treat a certain condition, either because there is insufficient evidence of its effectiveness, or because it presents a possible danger to consumers. Nonetheless, pharmaceutical companies often continue marketing the drug to doctors and pharmacies for unapproved uses in order to increase their profits and spread the drug to the maximum possible number of users.
Aside from the ethical concerns with off-label marketing, this practice is prohibited by the False Claims Act when used in conjunction with Medicare and Medicaid patients. The FCA prohibits reimbursement from the government for any drug prescribed for an unapproved use.
Endo Pharmaceuticals to Pay $172 Million to Settle Claims Involving Lidoderm Patch
Pennsylvania-based pharmaceutical company Endo Pharmaceuticals has agreed to pay $172 million to settle claims it improperly labeled and marketed a product known as the Lidoderm patch. This product was approved by the FDA for the treatment of pain associated with the skin condition Shingles – more accurately known as post-herpetic neuralgia. According to the Department of Justice, from 1999 through 2007 the company marketed the product for the treatment of back pain and other pain disorders not associated with the treatment of Shingles.
Concerned for the safety of patients, three whistleblowers stepped forward to report the off-label marketing scheme through a qui tam complaint filed under the False Claims Act. The whistleblowers, former pharmaceutical sales representatives with Endo, will likely receive between 15 and 20 percent of the settlement amount; however, their individual awards have not been publicly released at this time.
Endo has agreed to pay $137,700,172 to the U.S. Government and a total of $34,209,981 to various states and the District of Columbia, according to the Department of Justice. It has also agreed to enter into an integrity agreement, as well as implement internal controls in order to avoid this type of misconduct in the future.
In a statement to the press, the U.S. Attorney for the Eastern District of Pennsylvania remarked:
“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….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.”
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