Shire Pharmaceuticals Settles for $56.5 Million to Resolve False Claims Act Allegations Over ADHD Drugs

The Justice Department announced last week that pharmaceutical company Shire Pharmaceuticals LLC will pay $56.5 million to resolve civil allegations that it violated the False Claims Act as a result of its marketing and promotion of several products, including ADHD drugs Adderall XR and Vyvanse. 

The allegations arose from a lawsuit filed by Dr. Gerardo Torres, a former Shire executive, and a separate lawsuit filed by Anita Hsieh, Kara Harris, and Ian Clark, former Shire sales representatives.  The lawsuits were filed under the False Claims Act’s whistleblower provisions, which permit private parties to sue on behalf of the government and share in any recovery. DOJ notes that Torres will receive $5.9 million.  

The complaints alleged that between January 2004 and December 2007, Shire advertised that their ADHD medication could turn children into better students. “There is no evidence to support the claim that these drugs lead to improved grades in school,” argued Stephen Sheller, an attorney representing the whistleblower.

Joseph Trautwin, another whistleblower attorney on the case stated that “another claim Shire made was saying their drug Vyvanse was non-abusable. That turned out not to be true. It turned out that kids could abuse the drugs, and were doing so.” The government contended that no study Shire conducted had concluded that Vyvanse was not abuseable, and, as an amphetamine product, the Vyvanse label included an FDA-mandated black box warning for its potential for misuse and abuse. 

Government prosecutors also alleged that Shire made unsubstantiated suggestions that treatment with Adderall XR would help prevent certain issues linked to ADHD, such as poor academic performance, loss of employment, criminal behavior, traffic accidents, and sexually transmitted disease.

Additionally, the settlement resolves allegations that from April 2006 to September 2010, Shire representatives improperly marketed Daytrana, an ADHD patch, as less abuseable than traditional, pill-based medications, and, for part of this period, improperly made phone calls and drafted letters to state Medicaid authorities to assist physicians with the prior authorization process for prescriptions to induce these physicians to prescribe Daytrana and Vyvanse.

“Marketing efforts that influence a doctor’s independent judgment can undermine the doctor-patient relationship and short-change the patient,” said U.S. Attorney Zane David Memeger for the Eastern District of Pennsylvania.  “Where children’s medication is concerned, it can interfere with a parent’s right to clear information regarding the risks to the safety and health of their child.  Shire cooperated throughout this investigation and, in advance of this settlement, began to correct its marketing activities.”

“This settlement represents another important step in our fight against fraud in federally-funded healthcare programs such as Medicare and Medicaid,” said U.S. Attorney Zachary T. Fardon for the Northern District of Illinois.  “The Shire settlement returns funds not only to the U.S. government but also to the individual states whose health care programs rely in part on the efficacy of jointly-funded programs like Medicaid.  We will continue doing everything in our power to combat fraud and ensure the integrity of our healthcare programs.”

As is often the case in the settlements, the pharmaceutical company did not admit wrongdoing in connection with the agreement. Shire agreed to a Corporate Integrity Agreement (CIA) with HHS-OIG in exchange for avoiding exclusion from participation in Medicare, Medicaid, or other Federal health care programs. The CIA will address Shire’s future marketing efforts.

“We are pleased to have reached a resolution and to put this matter behind us,” said Flemming Ornskov, Shire’s Chief Executive Officer. “We remain focused on our mission of enabling people with life-altering conditions to lead better lives, and we are committed to conducting our activities to meet the highest ethical standards. The Company has had, and will continue to have, a comprehensive compliance program and internal controls to ensure we comply with applicable laws and regulations.”

DOJ notes that since January 2009, the Justice Department has recovered a total of more than $22.4 billion through False Claims Act cases, with more than $14.2 billion of that amount recovered in cases involving fraud against federal health care programs.