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False Claims Act Violations

The US Department of Justice has announced that Shire Pharmaceuticals LLC will pay $56.5 million to resolve civil allegations that its marketing and promotion of a number of its drugs violated the False Claims Act.  Among the drugs that Shire manufactures and sells include Adderall XR,  Daytrana and Vyvanse, which have been approved by the Food and Drug Administration (FDA) for use in the treatment of attention deficit hyperactivity disorder (ADHD), and Pentasa and Lialda, which have been approved for use in the treatment of mild to moderate cases of active ulcerative colitis.

This settlement will resolve allegations that the company promoted Adderall XR for a number of uses without the clinical data to support them. In addition, they  allegedly overstated the efficacy of Adderall XR, claiming that the drug would “normalize” patients, making it clinically superior to competitors’ ADHD drugs, and that Adderall XR would also lead to patients experiencing better academic  performance and less criminal behavior,  as well as make patients more employable, among other things. Shire also allegedly promoted Adderall XR for the treatment of conduct disorder, despite the fact that they lacked FDA approval for such treatment.

The settlement also resolves allegations that Shire’s marketing team made false and misleading statements regarding the efficacy and “abuseability” of Vyvanse to several state Medicaid officials, as well as medical personnel. The company also made an unsupported claim that patients treated with Vyvanse would experience fewer car accidents, commit fewer crimes, and would be better able to hold a job. They also allegedly marketed the Daytrana patch as less abuseable than other, comparable pill-based medications, and asked that state Medicaid authorities persuade doctors to prescribe Daytrana and Vyvanse by assisting medical personnel with the prior authorization process for prescriptions. These allegations were in addition to some that Shire was promoting Lialda and Pentasa for uses which were not on the label, not approved by the FDA and were also not covered by federal healthcare programs.  Specifically, Lialda was promoted off-label as a tool for prevention of colorectal cancer.

The allegations that were resolved by this settlement came out of a lawsuit that was first filed by a former Shire executive, Dr. Gerardo Torres, as well as a second, separate lawsuit that was filed by former Shire sales representatives Anita Hsieh, Kara Harris and Ian Clark, under the False Claims Act’s whistleblower provisions. These provisions allow private parties to sue companies on behalf of the government for false claims they make. These provisions also allow them to keep a share of any recovery that is made. Because of this, Dr. Torres will receive $5.9 million.

Between 2009 and 2013, False Claims Act cases have allowed the Justice Department to recover more than $22.4 billion for taxpayers. Of that total, a little over $14.2 billion of that involved fraud committed against federal health care programs,  especially Medicaid and Medicare. With this particular $56.5 million settlement, the federal government will recover $35.7 million, while state Medicaid programs will get back $20.8 million.

Most cases brought by the federal government under the False Claims Act come about because of information that was received from a whistleblower. In those cases, whistleblowers may be entitled to compensation from the restitution the government receives. If you have knowledge of Medicare or Medicaid fraud, or any other action that may fall under the False Claims Act, you may be entitled to compensation if you expose them. Contact the Medicare and Medicaid Fraud False Claims Act Attorney at Hill Law Firm to help you.

Commercial Litigation, False Claims Act