For Immediate Release - February 21, 2014

Pharmaceutical Company to Pay $724,000 to MassHealth Over Claims of Illegally Marketing Drug Lidoderm

Company to Pay $173 Million to Federal and State Authorities

BOSTON – A manufacturer of pharmaceutical products has agreed to pay more than $724,000 to the state’s Medicaid program (MassHealth) over allegations of unlawful marketing practices aimed at promoting the drug Lidoderm for conditions not approved by the Food and Drug Administration (FDA), Attorney General Martha Coakley announced today.

AG Coakley joined with other states and the federal government in a global settlement with Endo Pharmaceuticals, a wholly-owned subsidiary of Endo Health Solutions, to resolve civil allegations that it illegally marketed Lidoderm for use in connection with lower back pain or chronic pain. The FDA approved Lidoderm only for the treatment of pain associated with post-herpetic neuralgia, more commonly known as “shingles.”

“Manufacturers should not promote uses of their pharmaceutical products that have not been established to be safe and effective for consumers,” AG Coakley said. “Illegal drug marketing imposes unnecessary costs on our Medicaid system, and we are committed to working with federal and state law enforcement nationwide to make sure these companies adhere to industry standards.”

Under the terms of the civil settlement, Endo will pay $172.9 million to the states and federal governments and a $20.8 million dollar criminal fine. Endo will also enter into a deferred prosecution agreement with the Northern District of New York to resolve the charge, and a corporate integrity agreement with the Department of Health and Human Service’s Office of the Inspector General requiring the company to implement measures to avoid or detect similar conduct. The lawsuit was filed in the Eastern District of Pennsylvania under the provisions of the federal False Claims Act and similar state False Claims statutes.

According to the qui tam, or whistleblower lawsuit, between March 1999 and December 2007, Endo knowingly promoted the sale and use of Lidoderm for use in connection with lower back and chronic pain which were not medically accepted indications and were not covered by the state Medicaid program. Endo’s alleged unlawful conduct caused false and/or fraudulent claims to be submitted to MassHealth, causing the program to pay Endo more than $724,000 to which it was not entitled.

MassHealth provides healthcare products and services to eligible low-income individuals, including people with disabilities, children and senior citizens. The joint state/federal investigation of this matter was conducted by a team appointed by the National Association of Medicaid Fraud Control Units, the United States Department of Justice and the United States Attorney’s Office for the Eastern District of Pennsylvania. Assistant Attorney General George Zachos of the AG’s Medicaid Fraud Division handled this matter on behalf of the AG’s Office with assistance from data analyst Anthony Megathlin.

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