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Shire Pharmaceuticals LLC to Pay $56.5 Million to Government for Allegedly Violating the False Claims Act by Engaging In Unlawful Drug Marketing and Promotion Practices

On September 24, 2014, the Department of Justice (DOJ) announced that Shire Pharmaceuticals LLC (Shire), a pharmaceuticals manufacturer located in Wayne Pennsylvania, agreed to settle a lawsuit in which it will pay $56.5 million to the U.S. Government for allegedly violating the False Claims Act by making bogus claims about the effectiveness of drugs that it manufactures for treating attention deficit hyperactivity disorder (ADHD), and ulcerative colitis.  Part of the settlement agreement also alleges that Shire knowingly marketed and promoted to physicians “off-label” uses of these drugs, meaning uses not approved by the FDA.  By doing so, Shire potentially compromised the health and well being of those doctors’ patients.  Whistleblowers, Dr. Gerado Torres, a former Shire executive employee, and three former Shire sales representatives will share a reward of $5.9 million for exposing years of Shire’s alleged improper drug marketing and promotion practices.

Shire manufactures and provides medicines for treatments in Neuroscience, Rare Diseases, Gastrointestinal, and Internal Medicine.  Its stated mission is to help people with life-altering conditions, such as ADHD and colitis, lead better lives.  However, according to a lawsuit filed by Dr. Gerado Torres and other former employees of Shire, between January 2004 and September 2010, Shire allegedly engaged in several unlawful violations of the False Claims Act when it improperly promoted Adderall XR, a drug approved by the FDA for ADHD, by making false claims about its effectiveness.  For example, Shire allegedly claimed that Adderall XR would prevent poor academic performance, loss of employment, criminal behavior, and sexually transmitted diseases, despite the lack of clinical data to support its claim.  It also allegedly claimed that its competitor’s product could not achieve similar results in treating ADHD.

Additionally, Shire employees allegedly made false statements to the state Medicaid formulary committee and to individual physicians in an effort to promote specific drugs.  For example, one Shire sales representatives allegedly claimed that Vyvanse, also used to treat ADHD, provides less drug abuse liability despite an FDA-mandated black box warning for its potential for misuse and abuse.  Furthermore, Shire allegedly knowingly induced physicians to prescribe Datrana and Vyvanse to their patients by assisting the physicians in drafting letters and making phone calls to Medicaid in order to obtain prior authorization for these drugs.  Under the False Claims Act, it is unlawful for any individual or company to knowingly commit health care fraud against the government by misrepresenting a product through false advertisement, billing the government for a product or services that is not necessary, or engaging in unlawful drug marketing and promotion practices.

Consequently, whistleblowers, Dr. Gerado Torres, Anita Hsieh, Kara Harris and Ian Clark, all former employees of Shire, will share a reward of $5.9 million because they brought Shire’s alleged misconduct to the government’s attention by filing a qui tam lawsuit under the False Claims Act.  That statute provides that a whistleblower (technically known as the “relator” in the qui tam lawsuit) that follows certain specified procedures is entitled to between 15-30% of the monies recovered by the government.  In this case, the $5.9 million reward represents 16.2% of the $56.5 million settlement.

If you have information concerning a potential case involving pharmaceutical companies defrauding the government, or other persons or companies knowingly committing fraud against the government, do not hesitate to take action. It is possible that you might be able to bring your own qui tam lawsuit under the False Claims Act, acting as a whistleblower on behalf of the US government. Before filing your lawsuit, be sure to consult with an attorney familiar with the intricacies of the False Claims Act and qui tam lawsuits, as these attorneys are best equipped to help protect your rights and help you gain your share of any monetary reward from a potential settlement.

© 2020 by Tycko & Zavareei LLPNational Law Review, Volume IV, Number 271


About this Author

Jonathan K. Tycko leads the Whistleblower Practice Group of Tycko & Zavareei LLP

In recent years, the laws of the United States have undergone a whistleblower revolution. Federal and state governments now offer substantial monetary awards to individuals who come forward with information about fraud on government programs, tax fraud, securities fraud, and fraud involving the banking industry. Whistleblowers also now have important legal protections, designed to prevent retaliation and blacklisting.

The law firm of Tycko & Zavareei LLP works on the cutting edge of this whistleblower revolution, taking on even the most complex and confidential whistleblower...