The pharmaceutical company Endo Health Solutions recently settled a set of a qui tam (whistleblower) lawsuits for $193 million dollars. The first suit was filed in 2005, by a sales representative who started working at Endo in 2002.
The whistleblowers alleged that Endo violated Federal law by marketing Lidoderm for unapproved uses, including for low back pain, diabetic neuropathy and carpal tunnel syndrome. The Federal Food, Drug and Cosmetic Act (FDCA) prohibits this practice, known as “off-label marketing” because the prescribing information does contain the risks and benefits associated with such uses. While doctors are allowed to prescribe a drug for any purpose based on their professional judgement, the manufacturer should not be promoting a use that has not been adequately studied, and demonstrated to be safe and effective.
A qui tam lawsuit can be brought by an individual with inside information on behalf of the government because of fraud committed by a government contractor. Qui Tam lawsuits are often filed under the Federal False Claims Act, which courts have noted is the government’s primary litigation tool for recovering losses caused by fraud.
Whistleblowers may receive up to 30 percent of the settlement, depending on their involvement. Under the False Claims Act, 31 U.S. Code § 3729(b), a successful whistleblower receives 25 percent to 30 percent of the recovery if she pursued the case without the government’s involvement. Whistleblowers receive 15 percent to 25 percent for substantial involvement, when government intervenes, and up to ten percent if recovery was based primarily on information not provided by the whistleblower. Of course, private recovery is only available if the private party was not involved in planning and initiating the wrongdoing. The amount due the whistleblowers in this settlement has not yet been determined.
Endo denies wrongdoing. The company has entered into a corporate integrity agreement, which means that its conduct will be monitored by the U.S. Government for a period of time.