February 26, 2014
FRANKFORT—Attorney General Jack Conway and his Medicaid Fraud Abuse and Control Unit today announced Kentucky’s participation in a $173 million state-federal settlement with Endo Pharmaceuticals, a wholly owned subsidiary of pharmaceutical company Endo Health Solutions (Endo). The settlement resolves allegations of unlawful marketing practices aimed at promoting the drug Lidoderm for conditions not approved by the Food and Drug Administration (FDA). Kentucky’s total share of the settlement is $2.5 million with $303,836 returning directly to the state Medicaid program. The federal government will receive $1.74 million for its share of Kentucky-related damages.
The investigation was triggered by a whistleblower lawsuit filed in the Eastern District of Pennsylvania under the federal False Claims Act and similar state false claims statutes. According to the lawsuit, Endo unlawfully 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.
“The off-label marketing of drugs is not only illegal, it is unsafe,” General Conway said. “I am pleased that this settlement has been reached and that we’ve been able to recover these funds for Kentucky taxpayers and our state Medicaid program.”
Under the terms of the civil settlement, Endo will pay $172,916,967 to the states and federal government and a pay a $20.8 million criminal fine. Endo will also enter into Corporate Integrity Agreement with the Department of Health and Human Service’s Office of the Inspector General. A team from the National Association of Medicaid Fraud Control Units worked with the federal government on the investigation and conducted settlement negotiations with Endo on behalf of the states.
Since Attorney General Conway took office in January 2008, his Office of Medicaid Fraud and Abuse Control has recovered or been awarded more than $260 million dollars for the state and federal Medicaid programs. These cases range from lawsuits and settlements against pharmaceutical companies to cases against individual providers.
In 2013, General Conway’s Medicaid Fraud Unit was named one of the most aggressive in the country by the nonprofit watchdog group Public Citizen.
The Attorney General’s tip line for reporting allegations of Medicaid fraud is 1-877-228-7384.