Endo Pharmaceuticals Settles False Claim Act Case Over Liboderm Patch for $172 Million

Written February 25, 2014 by Robert Lu

On February 21, 2014, the U.S. Attorney’s Office for the Eastern District of Pennsylvania announced that pharmaceuticals company Endo Health Solutions, Inc. and its subsidiary Endo Pharmaceuticals Inc. (Endo), which is headquartered in Malvern, Pennsylvania, have agreed to pay $171.9 million to resolve civil allegations of off-label marketing of their adhesive pain patch Lidoderm.

According to the government, Lidoderm was only approved by the FDA for relief of pain associated with post-herpetic neuralgia, which is a painful condition that affects certain people with a history of shingles. Between the spring of 1999 and the winter of 2007, however, Endo promoted the pain patch for treatment of other conditions, such as lower back problems and chronic pain. The government stated that because those uses of the product were not medically accepted indications, federal healthcare programs such as Medicare and Medicaid would not cover such uses. Endo’s off-label promotion of Lidoderm ended up causing healthcare providers to submit false reimbursement claims for the non-covered uses.

The Liboderm settlement announced on February 21, was brought in party by whistleblower Peggy Ryan. Ms. Ryan is a former Endo sales representative whose sales territory included upstate New York. Under the qui tam (or whistleblower) provisions of the False Claims Act, certain private citizens may bring civil actions on behalf of the United States and may share in any recovery. The whistleblower share of this settlement has not yet been determined.

The case was filed in the Eastern District of Pennsylvania, and is styled, United States, et al. ex rel. Ryan v. Endo Pharmaceuticals Inc., No. 05-cv-3450.