Shire Pharmaceuticals Settles False Claims for $56.5M; Whistleblower to Get $5.9M

Posted: 09/24/2014  browse the blog archive
Shire Pharmaceuticals Settles False Claims for $56.5M; Whistleblower to Get $5.9M

Pennsylvania-based Shire Pharmaceuticals LLC has agreed to pay $56.5 million to resolve allegations that the company knowingly submitted or caused the submission of false claims to Medicaid, the U.S. Department of Justice announced today.  Shire manufactures and sells pharmaceuticals, including Adderall XR, Vyvanse, and Daytrana, which are approved for the treatment of attention deficit hyperactivity disorder (ADHD), and Pentasa and Lialda, which are approved for the treatment of mild to moderate active ulcerative colitis.

The settlement resolves allegations that Shire promoted Adderall XR for certain uses despite a lack of clinical data to support such claims and overstated the efficacy of Adderall XR, particularly relative to other ADHD drugs.  Among the allegedly unsupported claims was that Adderall XR was clinically superior to other ADHD drugs because it would “normalize” its recipients.  Shire allegedly stated that its competitors’ products could not achieve similar results, which the government contended was not shown in the clinical data that Shire collected.  Shire also allegedly marketed Adderall XR based on unsupported claims that Adderall XR would prevent poor academic performance, loss of employment, criminal behavior, traffic accidents and sexually transmitted disease.  In addition, Shire allegedly promoted Adderall XR for the treatment of conduct disorder without approval from the Food and Drug Administration (FDA).

The settlement further resolves allegations that Shire sales representatives and other agents allegedly made false and misleading statements about the efficacy and “abuseability” of Vyvanse to state Medicaid formulary committees and to individual physicians.  For example, one Shire medical science liaison allegedly told a state formulary board that Vyvanse “provides less abuse liability” than “every other long-acting release mechanism” on the market.  However, the government contended that no study Shire conducted had concluded that Vyvanse was not abuseable, and, as an amphetamine product, the Vyvanse label included an FDA-mandated black box warning for its potential for misuse and abuse.  Shire also made allegedly unsupported claims that treatment with Vyvanse would prevent car accidents, divorce, arrests and unemployment. 

Additionally, the settlement resolves allegations that Shire representatives improperly marketed Daytrana, administered through a patch, as less abuseable than traditional, pill-based medications, and, for part of this period, improperly made phone calls and drafted letters to state Medicaid authorities to assist physicians with the prior authorization process for prescriptions to induce these physicians to prescribe Daytrana and Vyvanse. 

Finally, the settlement resolves allegations that Shire sales representatives promoted Lialda and Pentasa for off-label uses not approved by the FDA and not covered by federal healthcare programs.  Specifically, the government alleged that Shire promoted Lialda off-label for the prevention of colorectal cancer.

As a result of today’s $56.5 million settlement, the federal government will receive $35,713,965, and state Medicaid programs will receive $20,786,034.  The Medicaid program is funded jointly by the federal and state governments.  In addition, Shire has separately reached agreement with the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG) on a corporate integrity agreement, which will address the company’s future marketing efforts.

The lawsuits were originally filed by Dr. Gerardo Torres, a former Shire executive, and Anita Hsieh, Kara Harris, and Ian Clark, former Shire sales representatives, under the whistleblower provision of the False Claims Act.  The Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery. Torres will receive $5.9 million as his portion of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.