Consumer Fraud

Judge ups Endo whistleblower’s FCA award to $33.6 million

whistleblower 5 370x210 Judge ups Endo whistleblower’s FCA award to $33.6 millionA former Lidoderm sales representative for Endo Health Solutions and its subsidiary Endo Pharmaceuticals will receive a $33.6-million payout as her share of $172-million settlement she was instrumental in bringing about with her whistleblower lawsuit.

Peggy Ryan sued her former employer in 2005 under the False Claims Act, alleging the company misbranded Lidoderm, a prescription drug for shingles pain, and pushed it for purposes not approved by the U.S. Food and Drug Administration (FDA).

In her whistleblower complaint, Ms. Ryan alleged that her superiors at Endo urged her to promote Lidoderm for off-label purposes by goading physicians to talk with her about using the drug in non-FDA-approved ways, distributing studies about its off-label uses, and employing messages such as “put the patch where the pain is.”

In addition to suing Endo on behalf of the U.S. government, Ms. Ryan also spent five years attending meetings and having conversations wearing a secret wire provided by the FBI to record activity within Endo and substantiate her claims, among other duties.

Endo settled the allegations in February 2014, agreeing to pay $171.9 million to resolve civil claims and an additional $20.8 million in criminal penalties.

The whistleblower provisions of the False Claims Act stipulate that whistleblowers whose cases result in a recovery of $1 million or more be awarded 15 to 25 percent (and in some cases up to 30 percent) of the total recovery.

According to FiercePharma, the U.S. Justice Department wanted Ms. Ryan’s whistleblower award to be much smaller; her lawyers pushed for 19 percent of the recovery, but federal judge Robert Kelly said that her “extraordinary” contributions to the case justified a larger award of 24 percent.

Ms. Ryan’s share comes out of the federal portion of the civil settlement, which is slightly less than $140 million. The other $32 million went to states that participated in the lawsuit, Law360 reported.

“An examination of the record exhibits that Ryan provided not only the spark for the investigation, but that she nurtured the flame at the darkest times when the possibility of a favorable outcome seemed most remote,” Judge Kelly wrote in court papers.

“Throughout the nine-year period from her first qui tam complaint in 2005 to the settlement in 2014, Ryan continually provided access behind the corporate walls of Endo. Ryan’s insider status, conferred by her employment with Endo, enabled the government investigatory team to recover evidence which would have otherwise been unobtainable,” Judge Kelly wrote.

Sources:

FiercePharma
U.S. Department of Justice
Law360