Shire Pharmaceuticals L.L.C. will pay $56.5 million to settle allegations that it inappropriately promoted the sale of ADHD medicine, among other drugs, the U.S. Attorney's Office in Philadelphia said Wednesday.
Shire is registered in the Channel Islands and headquartered in Dublin, but operates from the United States, including Wayne. Drugmaker AbbVie has a deal to buy Shire for $54 billion, in hopes of re-registering for the sake of lowering the corporate taxes it pays. Ireland has lower corporate taxes than the United States.
Shire admitted no wrongdoing, but also entered into a five-year Corporate Integrity Agreement with the Office of Inspector General for the Department of Health and Human Services.
"We are pleased to have reached a resolution and to put this matter behind us," Flemming Ornskov, Shire's chief executive officer said in a statement.
The statement from the Justice Department via the U.S. Attorney's Office in Philadelphia is here:
Pharmaceutical company Shire Pharmaceuticals LLC will pay $56.5 million to resolve allegations that it violated the False Claims Act as a result of its marketing and promotion of several drugs, the Justice Department announced today. Shire, located in Wayne, Pennsylvania, 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.
"Marketing efforts that influence a doctor's independent judgment can undermine the doctor-patient relationship and short-change the patient," said Zane David Memeger, U.S. Attorney for the Eastern District of Pennsylvania. "Where children's medication is concerned, it can interfere with a parent's right to clear information regarding the risks to the safety and health of their child. Shire cooperated throughout this investigation and, in advance of this settlement, began to correct its marketing activities."
"Patients and health care providers must receive accurate information about available prescription drugs so that they can make safe and informed treatment decisions," said Acting Assistant Attorney General for the Justice Department's Civil Division Joyce R. Branda. "The Department of Justice will be vigilant to hold accountable pharmaceutical companies that provide misleading information regarding a drug's safety or efficacy."
The settlement resolves allegations that, 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 ADHD drugs. Among the unsupported claims allegedly made by Shire was that Adderall XR was clinically superior to other ADHD drugs because it would "normalize" its recipients, rendering them indistinguishable from their non-ADHD peers. Shire allegedly stated that its competitors' products could not achieve similar results, which the Justice Department contended was not shown in the clinical data Shire collected. Shire also marketed Adderall XR based on claims that Adderall XR would prevent poor academic performance, loss of employment, criminal behavior, traffic accidents, and sexually transmitted disease. In addition, Shire promoted Adderall XR for the treatment of conduct disorder, an indication not approved by the Food and Drug Administration (FDA).
The settlement further resolves allegations that, between February 2007 and September 2010, Shire sales representatives and other agents also allegedly made false and misleading statements about the efficacy and abuse liability 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. No study Shire conducted concluded that Vyvanse was not abusable, 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 unsupported claims that treatment with Vyvanse would prevent car accidents, divorce, being arrested, and unemployment.
Additionally, the settlement resolves allegations that, from April 2006 to September 2010, Shire representatives improperly marketed Daytrana, administered through a patch, as less abusable than traditional, pill-based medications. The settlement also resolves allegations that, for part of the foregoing periods, Shire representatives 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, 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.
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 (HHS) Office of the Inspector General on a Corporate Integrity Agreement, which will address the company's future marketing efforts.
The allegations resolved by the settlement arose from a lawsuit filed by Dr. 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. The relator share payment will be $5.9 million.
"Our agency will continue to hold drug companies responsible for seeking to boost profits using false and misleading claims about products, such as the powerful medications prescribed to children and other drugs at issue in this settlement. 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," said Chief Counsel to the HHS Inspector General Gregory E. Demske.
This settlement illustrates the government's emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of HHS. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $20.5 billion through False Claims Act cases, with more than $14.2 billion of that amount recovered in cases involving fraud against federal health care programs.
The case in this district is being handled by Assistant United States Attorneys Paul W. Kaufman and David A. Degnan. The case was a cooperative effort among the U.S. Attorneys' Offices for the Eastern District of Pennsylvania and the Northern District of Illinois, the Civil Division of the Department of Justice, the FDA's Office of Criminal Investigations, and Office of the Inspector General for the Office of Personnel Management. The HHS Office of Counsel to the Inspector General, the HHS Office of the General Counsel-CMS Division, the FDA's Office Chief Counsel, and the National Association of Medicaid Fraud Control Units also provided assistance.