CORPORATE CRIME REPORTER
Medicis
Pharmaceutical to Pay $9.8 Million to Settle False Claims Act Charge
21 Corporate Crime Reporter 20, May 8, 2007
Medicis Pharmaceutical Corporation of Scottsdale, Arizona will pay $9.8 million
to settle allegations that the company violated the False Claims Act.
Federal officials alleged that Medicis promoted the use of a topical skin preparation, Loprox, for use on children under the age of 10, without approval by the Food & Drug Administration (FDA).
The Justice Department and the whistleblowers – former Medicis employees – alleged that Medicis sales personnel targeted pediatricians, urging the doctors to use Loprox as a treatment for diaper rash.
The use of Loprox, which is approved by the FDA as a fungicide for patients over 10 years of age, is not a "medically accepted indication" for the treatment of diaper dermatitis and other skin disorders in children under ten.
The Food, Drug & Cosmetic Act prohibits pharmaceutical companies from marketing or promoting a drug for uses that the FDA has not approved, a practice known as "off-label marketing."
In the case against Medicis, the United States alleged that the Medicaid program paid millions of dollars for Loprox prescriptions that would not have been reimbursed if government authorities had known that the prescriptions resulted from the company's off-label marketing campaign.
Medicis sold its pediatric sales unit in 2004.
The civil settlement resolves claims brought by four former Medicis sales representatives. As a result of the settlement, the whistleblowers will collectively receive in excess of $1,078,000 as their statutory award.
Under the qui tam provisions of the False Claims Act, private parties can file an action on behalf of the United States and receive a portion of the settlement if the government reaches a monetary agreement with the defendants.
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