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TRENTON
- Attorney General Anne Milgram announced
today that New Jersey will receive nearly
$9.5 million in a national Medicaid fraud
settlement with pharmaceutical company Eli
Lilly and Company regarding an illegal off-label
marketing campaign that improperly promoted
the antipsychotic drug Zyprexa.
Under
the national settlement, Eli Lilly will
pay the states and the federal government
$800 million in damages and penalties to
compensate Medicaid and various federal
healthcare programs for harm suffered as
a result of the illegal off-label marketing.
Medicaid
is jointly funded by the state and federal
governments. New Jersey has reached an agreement
in principle with Eli Lilly under which
the joint federal and state settlement payment
to the New Jersey Medicaid program will
be $18,416,660. The state’s share
is $9,477,068.
“During
the past year, we have recovered more than
$22 million for New Jersey through national
settlements such as this one, in which our
Medicaid Fraud Control Unit played an important
role,” said
Attorney General Milgram. “That
is additional money for our Medicaid program
to assist people who otherwise could not
afford vital health care services and prescription
drugs.”
The
settlement arose from four federal and state
false claim actions that were consolidated
in the U.S. District Court for the Eastern
District of Pennsylvania. The cases, called
qui tam cases, were filed by private parties
on behalf of the government. New Jersey
played an important role on the team of
state Medicaid Fraud Control Units that
worked with the U.S. Department of Justice
to negotiate the settlement. New Jersey
was one of six states that did extensive
claims data analysis which supported the
damage figures.
In
addition to the civil settlement, the U.S.
Attorney for the Eastern District of Pennsylvania
has filed a criminal information in U.S.
District Court charging Eli Lilly with a
misdemeanor violation of the Food, Drug
and Cosmetic Act. In a plea agreement filed
with the court, Eli Lilly has agreed to
pay a $615 million criminal fine to resolve
the charge.
As
part of the civil settlement, Eli Lilly
will enter a corporate integrity agreement
with the U.S. Department of Health and Human
Services’ Office of the Inspector
General, which will closely monitor the
company’s future marketing and sales
practices.
“We
are committed to investigating and prosecuting
Medicaid fraud and other abuses affecting
our Medicaid program,” said Insurance
Fraud Prosecutor Greta Gooden Brown. “With
the high cost of prescription medicines,
illegal off-label marketing of drugs can
cause huge amounts of Medicaid funding to
be diverted from approved uses.”
Zyprexa
was the first of a newer generation of antipsychotic
medications called atypical antipsychotics
used to treat certain psychological disorders.
Between September 1999 and December 31,
2005, Eli Lilly willfully promoted the sale
and use of Zyprexa for certain uses which
the Food and Drug Administration had not
approved. This is known as off-label marketing.
The promotional activities undertaken by
Eli Lilly in its “Viva Zyprexa”
marketing campaign promoted Zyprexa not
only to psychiatrists, but also to primary
care physicians, for such unapproved uses
as the treatment of depression, anxiety,
irritability, disrupted sleep, nausea and
gambling addiction.
In
implementing the campaign, Eli Lilly also
made payments and gave other things of value
to physicians and other health care professionals.
As a result of these promotional activities,
Eli Lilly caused physicians to prescribe
Zyprexa for children and adolescents, dementia
patients in long term care facilities, and
in unapproved dosage amounts, all of which
are uses that were not medically accepted
indications approved for reimbursement by
state Medicaid programs. Off-label prescribing
is a common practice and is not per se unlawful.
However, pharmaceutical manufacturers are
prohibited from promoting off-label uses
of their drugs, which is what formed the
basis of Eli Lilly’s liability.
Attorney
General Milgram credited Assistant Attorney
General John Krayniak, Senior Counsel in
New Jersey’s Medicaid Fraud Control
Unit in the Office of Insurance Fraud Prosecutor,
with helping to negotiate the settlement
with state and federal authorities. Attorney
General Milgram also credited Technical
Assistant B’leia Williams of the Medicaid
Fraud Control Unit for the important role
she played in analyzing claims data. Data
analysis is a critical part of an off-label
marketing case.
In
addition to the senior counsel from New
Jersey, the team of negotiators for the
National Association of Medicaid Fraud Control
Units included representatives from Massachusetts,
New York, Ohio, Delaware, Texas and Illinois.
In
Medicaid settlements in 2008, New Jersey
recovered $7.4 million from Merck &
Co. in February; nearly $2.5 million from
Cephalon Inc. in September; $1,758,000 from
Purdue Pharma in January; $1 million from
Walgreens in June; $350,000 from CVS/Caremark
in March; and $195,000 from Aventis in February.
Attorney
General Milgram noted that New Jersey has
a new tool to combat Medicaid fraud. She
explained that in 2008, Governor Corzine
signed the New Jersey False Claims Act,
which contains a whistleblower provision
to provide rewards to people, often corporate
insiders, who blow the whistle on fraud.
New Jersey administers the Medicaid program
through the Division of Medical Assistance
and Health Services and through the Medicaid
Fraud Control Unit in the Office of Insurance
Fraud Prosecutor, which investigates both
criminal and civil Medicaid fraud and abuse
in that program.
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