June 25, 2014

whistleblowerPharmaceutical salesperson Peggy Ryan believed her employer Endo Health Solutions illegally marketed the pain treatment patch Lidoderm and filed fraudulent Medicare claims. Because she felt strongly that illegal behavior was occurring, Ryan consulted with a whistleblower attorney and filed a qui tam lawsuit. In 2005, the Department of Justice intervened and Ryan provided help to investigators as an informant. While continuing to work for her employer, Ryan supplied information and even wore a wire to help build the case against Endo, recording more than 200 hours of conversations.

Lidoderm is a patch approved by the FDA to relieve pain associated with post-herpetic neuralgia, a rare and painful condition that affects individuals with shingles. But according to the claims filed by the DOJ, Endo knowingly marketed and sold the product for non-approved uses. In 2005, the FDA warned Endo that its marketing and sales of Lidoderm was not complying with federal law. In response, Endo allegedly coached sales representatives like Ryan on methods to discuss non-approved uses of Lidoderm with medical care providers.

Endo allegedly engaged in fraudulent off-label marketing and sales of its products in order to profit at the expense of taxpayers. Paying kickbacks to doctors and medical care providers is another common form of fraudulent activity by healthcare and pharmaceutical companies. During the Endo investigation, Ryan uncovered an internal document showing that 95% of Lidoderm sales were for uses not approved by the FDA. Because taxpayers finance Medicare and most Lidoderm sales were made through Medicare, taxpayers were being defrauded to the tune of millions of dollars.

“By marketing Lidoderm for uses not covered by Federal health care programs, Endo profited at the expense of taxpayers and could have put patients at risk,” Daniel Levinson, the HHS Inspector General, said in a statement.

Almost 10 years after the U.S. Department of Justice agreed to join Ryan’s whistleblower claims against Endo, the DOJ announced Endo Health Solutions and Endo Pharmaceuticals will pay $171.9 million to resolve the lawsuit. As a False Claims Act whistleblower, Peggy Ryan may be eligible to receive 15% to 25% of the recovery, which is a payment ranging from $25.8 million to $43 million. Endo is also paying $20.8 million in criminal forfeiture and fines to resolve criminal charges.

The False Claims Act allows private citizens to blow the whistle on fraudulent behavior. The law incentivizes whistleblowers to come forward by compensating them with a portion of a subsequent settlement or verdict. The federal government has stated that fighting fraud in Medicare, Medicaid, and other healthcare programs is a top priority. By filing a Medicare or Medicaid whistleblower claim, you are upholding the integrity of our healthcare programs, saving taxpayers money, and holding wrongdoers accountable.

At The Cochran Firm, we provide experienced and knowledgeable legal representation to healthcare whistleblowers. We understand the pressure, confidentiality concerns, and other unique factors that may impact a whistleblower case. If you are aware of unethical behavior that is defrauding a government program, please contact us to receive a free, confidential case evaluation. All whistleblower inquiries are treated sensitively. Because strict time limits apply to filing a claim, in addition to “first to file” rules, we recommend contacting us at your earliest convenience.