Without admitting liability, Wayne, Pennsylvania-based Shire Pharmaceuticals LLC has entered a settlement agreement with the U.S. Department of Justice arising out of claims filed under the False Claims Act by company whistleblowers (relators) alleging that the company misrepresented the efficacy of some of its products and promoted others for off-label uses. United States ex rel. Torres v. Shire Specialty Pharm., No. 08-4795 (U.S. Dist. Ct., E.D. Pa.); United States ex rel. Hsieh v. Shire PLC, No. 09-6994 (U.S. Dist. Ct., N.D. Ill.) (settled September 19, 2014). Under the agreement, Shire will pay a total of $56.5 million to the United States and Medicaid participating states. One relator will receive $5.9 million once the United States receives its share of the settlement, and Shire has agreed to pay the relators and relators’ counsel more than $900,000 in expenses and fees. Shire CEO Flemming Ornskov said, “We are pleased to have reached a resolution and to put this matter behind us,” and added that the company “has had, and will continue to have a comprehensive compliance program and internal controls to ensure we comply with applicable laws and regulations.”
The company allegedly claimed, without sufficient supporting clinical data, that (i) its ADHD medications were superior to other ADHD drugs; (ii) use of the drugs would help prevent certain ADHD-linked issues, “such as poor academic performance, loss of employment, criminal behavior, traffic accidents, and sexually transmitted disease”; (iii) one of its drugs was “non-abuseable” or “less abuseable” than others; and (iv) other drugs could prevent colorectal cancer or treat indeterminate colitis and Crohn’s disease, despite that these were not medically accepted indications and the drugs were not covered by U.S. or state Medicaid programs for these uses. The company’s sales representatives allegedly improperly made phone calls and drafted letters to Medicaid to help physicians with the prior authorization process for Medicaid prescriptions for certain drugs, without disclosing that they worked for Shire and provided the services “to induce the physicians to prescribe” the drugs for payment by Medicaid. See Bloomberg BNA, Product Safety & Liability Reporter™, September 24, 2014.