Pharmaceutical Company Allegedly Violated Federal and Texas Medicaid Laws

August 01, 2018 DALLAS–(BUSINESS WIRE)–Today, the national law firm of Baron & Budd announced that Endo Pharmaceuticals Inc. (“Endo”) has agreed to pay $13.25 million to settle a whistleblower lawsuit brought by the State of Texas under the Texas Medicaid Fraud Prevention Act (“TMFPA”). The suit alleged that Endo misrepresented and concealed information about the safety, efficacy and appropriate use of the drug Lidoderm® to the Texas Medicaid Program. This illegal conduct is alleged to have caused Lidoderm to be promoted in violation of federal and state law, and rendered false Endo’s sworn certifications of compliance to Texas Medicaid, which are required for drugs to be listed on the Texas Medicaid formulary.

This case follows a 2014 settlement, in which Endo agreed to pay $192.7 million to federal and state governments to resolve a lawsuit which alleged that the company marketed Lidoderm for uses not approved as safe and effective by the FDA. The state of Texas opted out of the federal fraud litigation and chose to bring a separate action under Texas law. Classified as a whistleblower lawsuit, information to support the allegations of the fraud was brought forth by a former Endo sales representative, Max Weathersby, and two other individuals, under MK Litigation Partnership LLC, who had extensive and detailed information about the sales and marketing tactics of the drug.

“We often read headlines about cases where a drug does more harm than good, but as taxpayers paying for programs like Medicaid, we should be outraged at having to pay for a drug that does nothing at all to help the patient because that wastes precious resources,” said Scott Simmer, of the law firm Baron & Budd and the attorney representing the whistleblowers in the case. “In this case, our clients alleged that Endo deliberately chose to suppress the findings of five clinical trials it had sponsored, all of which showed Lidoderm was no more effective than a placebo for treating various types of pain.”

From 2002 to 2006, Lidoderm was approved by the FDA only for the relief of pain associated with shingles, a disease which the Centers for Disease Control says affects around one million Americans per year. Similar to the federal case, the suit brought by the State of Texas alleged that Endo deliberately chose to withhold information about negative outcomes in five clinically rigorous trials. Those clinical trials showed that Lidoderm was no more effective than a placebo in treating low back pain, carpal tunnel syndrome and neuropathic pain generally. Instead, Endo is alleged to have promoted demonstrably inferior and materially misleading studies to support the off-label use of the drug. The suit also alleged that the pharmaceutical giant improperly targeted physicians who were not likely to prescribe Lidoderm for the FDA-approved indication and shipped free Lidoderm samples to formulary executives to illegally induce them to provide preferential formulary treatment for the drug.

“The Texas Attorney General’s Office is very diligent in its prosecution of Medicaid fraud under the TMFPA,” Simmer said. “The state’s prosecutors led by Cynthia O’Keeffe and Kris Kennedy are very dedicated to this task. We thank them for their hard work and support of the role whistleblowers played in exposing this Lidoderm fraud.”

In addition to Simmer, the whistleblowers were also represented by Baron & Budd shareholder Andrew Miller. Baron & Budd’s whistleblower practice brings more than 33 years of combined experience investigating and prosecuting multiple precedent-setting fraud and abuse cases on behalf of whistleblowers and private payors.

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