Pharmaceuticals company Shire Pharmaceuticals agreed today to pay $56.5 million to the Department of Justice to resolve allegations that it violated the False Claims Act, as a result of its marketing and promotion of several drugs.

Of the $56.5 million settlement, the federal government will receive $35.7 million, and state Medicaid programs will receive $20.8 million. In a statement, Acting Assistant Attorney General Joyce Branda for the Justice Department’s Civil Division said the agency will continue to be vigilant “to hold accountable pharmaceutical companies that provide misleading information regarding a drug’s safety or efficacy.”

In addition to the penalty amount, Shire also entered into a corporate integrity agreement. “We entered into a corporate integrity agreement with Shire that requires comprehensive compliance safeguards, oversight of Shire promotional activities, and compliance certifications from Shire’s board of directors and management,” Gregory Demske, Chief Counsel to the HHS Inspector General, said in a statement.

Case Details

The allegations arose from a lawsuit filed by Gerardo Torres, a former Shire executive, and a separate lawsuit filed by Anita Hsieh, Kara Harris, and Ian Clark, former Shire sales representatives.  The lawsuits were filed under the False Claims Act’s whistleblower provisions, which permit private parties to sue for false claims on behalf of the government and to share in any recovery.  Torres will receive $5.9 million for the tips he provided.   

According to the complaints, between January 2004 and December 2007, 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 attention deficit hyperactivity disorder (ADHD) drugs. 

Specifically, Shire Pharmaceuticals claimed Adderall XR was clinically superior to other ADHD drugs because it would “normalize” its recipients, rendering them indistinguishable from their non-ADHD peers, according to the Justice Department. 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. Additionally, Shire allegedly promoted Adderall XR for the treatment of conduct disorder without approval from the Food and Drug Administration (FDA).

The complaints also alleged that, between February 2007 and September 2010, 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. 

Additionally, the settlement resolves allegations that from April 2006 to September 2010, Shire representatives improperly marketed Daytrana, administered through a patch, as less abuseable than traditional, pill-based medications. For part of this period, Shire representatives also improperly made phone calls and drafted letters to state Medicaid authorities to assist physicians with the prior authorization process for prescriptions to induce physicians to prescribe Daytrana and Vyvanse. 

Lastly, the settlement resolves allegations that between January 2006 and June 2010, 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.

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