Tuesday, March 11, 2014

Endo Health Solutions Lidoderm Settlement and Corporate Integrity Agreement, CME Obligations

Endo Health Solutions, Inc. and its subsidiary Endo Pharmaceuticals Inc. (Endo) have agreed to pay $171.9 million to resolve civil allegations of marketing their adhesive pain patch Lidoderm for off-label uses. As part of the settlement, Endo will enter into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General. 
The Department of Justice (DOJ) announcement states: "[F]rom March 1999 through December 2007, Endo caused false claims to be submitted to federal health care programs…by promoting Lidoderm for unapproved uses, some of which were not medically accepted indications and, therefore, were not covered by the federal health care programs." Endo has also agreed to pay $20.8 million to resolve criminal liability. In a deferred prosecution agreement to resolve the charge, Endo admitted to promoting Lidoderm to healthcare providers for unapproved indications.
Interestingly, the government press release failed to mention any allegations of kickbacks or false statements at all. These "plus factors" have become staples of off-label settlement announcements. The DOJ announcement focused purely on the fact that Endo promoted its drug for uses not yet approved by the Food and Drug Administration (FDA).
Lidoderm was FDA-approved for relief of pain associated with post-herpetic neuralgia ("PHA"), a condition that can affect individuals with a history of shingles. Endo admitted to promoting Lidoderm for lower back pain and chronic pain. This alone sufficed for criminal and civil liability. "Pharmaceutical companies have a legal obligation to promote their drugs for only FDA-approved uses," the release stated, quoting U.S. Attorney for the E.D. of Pennsylvania, Zane D. Memeger.
Endo is the latest company to settle with the government over False Claims Act (FCA) allegations. Since January 2009, the Justice Department has used the FCA to recover more than $19 billion from pharmaceutical companies. Most FCA action stems from qui tam relators—whistleblowers who can earn up to one-third of the settlement figure.
Corporate Integrity Agreement
The Inspector General of the U.S. Department of Health and Human Services, Daniel R. Levinson, stated: "Under our CIA, Endo agrees to promote its products legally, while board members and top executives are specifically held accountable for compliance."
Endo's CIA requires that the Board of Directors of the company be "responsible for the review and oversight of matters related to compliance." Furthermore, "Certifying Employees," including the CEO, Chief Operating Officer, and Senior Vice President, are "specifically expected to monitor and oversee activities within their areas of authority." The Certifying Employees "shall annually certify...that [Endo] is compliant with applicable Federal health care program and FDA requirements and with the obligations of this CIA."
Third Party Educational Activity
The CIA requires Endo to implement written policies and procedures for its compliance program, which must adhere to requirements of the CIA, the Federal healthcare program, and FDA. The CIA lists Endo's minimum responsibilities, and notably among the items are requirements for Third Party Educational Activity:
- See more at: http://www.policymed.com/#sthash.M1j45cu5.dpuf

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